Banks disbursed Tk聽24,860 crore in agricultural loans during July-March period of the 2024-25 financial year, achieving 65.42 per cent of the total disbursement target for FY25, according to Bangladesh Bank data.
The recovery of agricultural loans stood at Tk 27,443 crore in the first nine months of FY25, reflecting an 8 per cent increase compared with that in the same period of the previous year.
The central bank had set an agricultural loan disbursement target of Tk 38,000 crore for FY25, an 8.57 per cent increase from Tk 35,000 crore in FY24.
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 March 2025, the outstanding balance, including interest, reached Tk 56,965 crore, marking a 0.7 per cent rise from the previous financial year.
Overdue of agricultural credit stood at Tk 10,096 crore at the end of March 2025, which is 0.77 per cent higher than the overdue of Tk 10,175 crore at the end of March 2024.
State-owned commercial banks and specialised banks disbursed Tk 10,133 crore in the first nine months of FY25, covering 80.32 per cent of their Tk 12,615 crore target.
Private and foreign banks provided Tk 14,727 crore, fulfilling 58 per cent of their Tk 25,385 crore disbursement goal in FY25.
Among different agricultural sectors, crop farming received the highest share of loans of Tk 11,675 crore, followed by livestock and poultry at Tk 6,109 crore, fisheries Tk 3,723 crore and poverty alleviation loan of Tk 994 crore.
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.
On May 22, 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 37,154 crore in agricultural and rural loans in FY24 compared with that of Tk 32,830 crore disbursed in FY23.
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.