Banks disbursed Tk 37,326 crore in agricultural loans during the 2024-25 financial year, which was slightly lower than the total disbursement target for FY25, according to Bangladesh Bank data.
The central bank had set an agricultural loan disbursement target of Tk聽38,000 crore for FY25, an 8.57 per cent increase from Tk 35,000 crore target in FY24.
BB data showed that banks disbursed Tk 37,326 crore in FY25, slightly up from Tk 37,153 crore in FY24.
The recovery of agricultural loans stood at Tk聽38,024 crore in the FY25, reflecting an 6.9 per cent increase compared with that of Tk聽35,571 crore in the same period of the previous year.
The central bank set the farm loan release target to increase agricultural production to control inflationary pressures and achieve gross domestic product growth target.
As of June 2025, the outstanding balance of agricultural credit, including interest, reached Tk 60,232 crore, marking a 3.63 per cent rise from the previous financial year.
Among different agricultural sectors, crop farming received the highest share of loans of 46 per cent, followed by livestock and poultry at 24 per cent, fisheries 15 per cent and poverty alleviation loan of 5 per cent.
As agriculture plays a vital role in the country鈥檚 economy, issuing credit to farmers has become crucial to keeping the agriculture-based rural economy vibrant, especially amid the ongoing global economic crisis.
More than 40 per cent of the country鈥檚 workforce is directly employed in the agriculture sector.
Farm loans enable farmers to invest in inputs like seeds, fertilisers and machinery, leading to increased productivity and economic growth.
Farm loans also contribute to rural development by providing income opportunities and improving infrastructure in rural areas.
In May 2022, the central bank instructed the country鈥檚 banks to disburse agricultural credit at a concessional interest rate of 4 per cent for cultivating import substitute crops, including pulses, oilseeds, spices and maize.
Banks disbursed Tk 32,829 crore in agricultural and rural loans in FY23 compared with that of Tk 28,834 crore disbursed in FY22.
Most of these loans were channelled through non-government organisations, which charge interest rates ranging from 24 to 30 per cent.
To address the challenge of reaching remote areas, banks allocated loan amounts to NGOs.
To encourage direct lending to farmers, the Bangladesh Bank has instructed banks to disburse a minimum of 50 per cent of their total disbursements through their own channels.
