Agri loan defaults surge 88 pc by September
Staff Reporter:
Overdue agricultural loans held by scheduled banks rose sharply by 88 percent year-on-year to Tk 22,120 crore at the end of September 2025, according to the latest Bangladesh Bank (BB) data.
In its monthly report on agriculture and rural finance, the central bank said the spike was mainly driven by state-owned specialised banks, state-owned commercial banks and private commercial banks.
BB also noted that the revised loan classification policy, implemented in April 2025, played a significant role in pushing up the volume of overdue loans.
The central bank cautioned that the sharp rise signals mounting difficulties in loan recovery and underscores the need for tighter oversight and improved risk management in agricultural financing.
Despite the increase in defaults, total outstanding agricultural credit including interest reached Tk 59,500 crore at the end of September, marking an 8 percent rise from Tk 54,928 crore a year earlier.
Bangladesh Krishi Bank is highest agricultural loan collecting this year by increasing door to door movement activities said Md Zahid Hossain, chief regional manager, (Dhaka), Bangladesh Krishi Bank.
In the microfinance sector, Grameen Bank and 10 major NGOs disbursed Tk 18,464 crore in loans during September, a 21 percent increase compared to the same month last year. Loan recoveries also improved, rising 16 percent year-on-year to Tk 16,968 crore.
Their combined outstanding microcredit portfolio stood at Tk 123,006 crore, while overdue loans amounted to Tk 8,383 crore, accounting for nearly 7 percent of the total.
Overall overdue loans of microfinance institutions (MFIs) increased by 20 percent year-on-year to Tk 8,383 crore at the end of September 2025.
Bangladesh Bank attributed the deterioration in repayment to irregular borrower behaviour and growing financial stress caused by flood-induced crop losses and rising living costs.
Meanwhile, PKSF’s lending programme recorded an outstanding balance of Tk 13,692 crore at the end of September, with overdue loans limited to Tk 108 crore. BB said that although overdue balances have risen across the MFI sector, PKSF and leading institutions continue to show strong recovery performance and expanding outreach.