Staff Reporter :
Agricultural loan disbursement has fallen by more than six per cent during the first eight months (July-February) of the current fiscal year (2024-25), mainly due to ongoing political uncertainty, high interest rates, and flooding.
According to recent statistics from Bangladesh Bank (BB), disbursements dropped to Tk 22,126 crore in the July-February period, compared to Tk 23,691 crore in the same period of the previous fiscal year.
Of the total disbursement, eight public banks provided Tk 9,208 crore, while private and foreign commercial banks disbursed the remaining Tk 12,918 crore.
In the first half of FY25, reduced lending from private and foreign commercial banks, which provide the majority of agricultural loans, led to an 11.28 per cent year-on-year decline in total agricultural loan disbursements, which fell to Tk 16,259.11 crore in the last six months of FY25.
As of January, farm credit disbursements had dropped by over 9.0 per cent, amounting to Tk 19,215 crore in this fiscal year, compared to Tk 21,154 crore in the same period of FY24, according to BB data.
In response, the central bank plans to issue fresh instructions next week to eight public banks, aimed at strengthening their disbursement activities nationwide. The goal is to ensure food security by boosting agricultural production, officials have said.
The eight public banks are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BASIC Bank, Bangladesh Development Bank, Bangladesh Krishi Bank (BKB), and Rajshahi Krishi Unnayan Bank (RAKUB).
“We will issue the instructions at a review meeting with senior officials of the public banks,” a senior official of the central bank told the media in response to a query.
He also mentioned that agricultural loan disbursements have already shown an upward trend, which is expected to continue in the coming months.
Bangladesh Bank has raised the agricultural loan disbursement target for banks by 8.75 per cent, setting it at Tk 38,000 crore for FY25, up from Tk 35,000 crore in the previous fiscal year.
Meanwhile, all scheduled banks have already achieved 58.23 per cent of their FY25 disbursement target, compared to 67.69 per cent in the same period of FY24.
The aggregate recovery of farm loans, however, increased to Tk 24,424 crore during the July-February period of FY25, up from Tk 22,662 crore in the same period of the previous year.
