Banks boost agri credit by 50.57pc in 7 months

Staff Reporter :

Agricultural credit growth is gaining momentum, with banks disbursing approximately 50.57 per cent, or Tk 19,215 crore, during the first seven months of the current fiscal year FY2024-25, which is expected to boost food production.

According to the latest data from the central bank, scheduled banks have provided Tk 19,215 crore in agricultural and rural credit from July to January, against a target of Tk 38,000 crore for the current fiscal year FY2024-25.

In comparison, during the same period last year, banks disbursed Tk 24,730 crore, which accounted for 60.44 per cent of the previous year’s target of Tk 4,090 crore.

For FY2024-25, the central bank has set an agricultural and rural credit target of Tk 38,000 crore to support the country’s food production.

However, two banks have failed to disburse any loans during this period. Three other banks have disbursed less than 10 per cent of their target. These include Padma Bank (a private sector bank) and Woori Bank (a foreign-owned bank), which have not provided any loans to the agricultural and rural sectors in the first seven months. Additionally, Madhumoti Bank, Union Bank, and HSBC Bank have each disbursed less than 10 per cent of their respective targets.

The Sharia-based First Security Islami Bank has disbursed 10.59 per cent of its target. Union Bank, with a target of Tk 100 crore, has only disbursed Tk 4.89 crore in agricultural and rural loans during the seven months.

Madhumoti Bank, with a target of Tk 33 crore, has disbursed Tk 2.5 crore, or 7.58 per cent of the target. HSBC Bank, which had a target of Tk 285 crore, has disbursed just 8.77 per cent of that amount, equating to Tk 25 crore.

To ensure food security, the government has mandated that commercial banks allocate at least 2 per cent of their total loans to the agricultural sector to support agriculture and related activities. Bangladesh Bank has also instituted penalties for banks that fail to meet their agricultural loan targets.

Bangladesh Bank has set further provisions, including the requirement for banks to allocate at least 13 per cent of their target loans to the fisheries sector for FY2024-25. As of the end of January, Tk 1,715 crore, or 14.33 per cent of the loan target, had been disbursed to this sector.

Additionally, banks are expected to provide at least 15 per cent of the target loans to the livestock sector, with Tk 4,664 crore (12.27 per cent of the target) already disbursed to the livestock and poultry sector.

In the first seven months, banks have also disbursed Tk 731 crore for poverty alleviation, Tk 9,101 crore for the crop sector, Tk 148 crore for the purchase of agricultural machinery, Tk 136 crore for irrigation machinery, Tk 67 crore for grain storage and marketing, and Tk 2,910 crore for fish farming.