Staff Reporter :
Banks in Bangladesh disbursed Tk 24,860 crore in agricultural loans during the 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.
Loan recovery during the same period stood at Tk 27,443 crore, reflecting an 8 per cent increase compared with the corresponding period of the previous year.
The central bank had set an agricultural loan disbursement target of Tk 38,000 crore for FY25, representing an 8.57 per cent increase from Tk 35,000 crore in FY24. The target aims to boost agricultural production to help contain inflationary pressures and support gross domestic product growth.
As of March 2025, the outstanding balance of agricultural loans, including interest, reached Tk 56,965 crore, marking a 0.7 per cent rise year-on-year. Overdue agricultural credit stood at Tk 10,096 crore at the end of March 2025, slightly higher – by 0.77 per cent – than the Tk 10,175 crore recorded at the end of March 2024.
State-owned commercial and specialised banks disbursed Tk 10,133 crore in the first nine months of FY25, achieving 80.32 per cent of their Tk 12,615 crore annual target. Private and foreign banks provided Tk 14,727 crore, fulfilling 58 per cent of their Tk 25,385 crore disbursement goal for the fiscal year.
Among the agricultural sub-sectors, crop farming received the highest allocation, with loans totalling Tk 11,675 crore, followed by livestock and poultry at Tk 6,109 crore, fisheries at Tk 3,723 crore, and poverty alleviation initiatives receiving Tk 994 crore.
Given agriculture’s vital role in the national economy, extending credit to farmers remains crucial for sustaining the agriculture-based rural economy, particularly amid the ongoing global economic challenges. More than 40 per cent of Bangladesh’s workforce is directly employed in the agricultural sector.
Farm loans enable farmers to invest in essential inputs such as seeds, fertilisers and machinery, thereby boosting productivity and driving economic growth. Additionally, agricultural lending supports rural development by creating income opportunities and enhancing infrastructure in rural communities.
In an effort to stimulate the cultivation of import-substituting crops, including pulses, oilseeds, spices and maize, Bangladesh Bank, on 22 May 2022, instructed banks to disburse agricultural credit at a concessional interest rate of 4 per cent.
In FY24, banks disbursed Tk 37,154 crore in agricultural and rural loans, compared with Tk 32,830 crore in FY23. A significant proportion of these loans were channelled through non-governmental organisations (NGOs), which often charge interest rates ranging from 24 to 30 per cent.
To address the challenge of extending credit to remote rural areas, banks allocated loan amounts to NGOs. However, to encourage more direct engagement, Bangladesh Bank has instructed that banks must disburse a minimum of 50 per cent of their agricultural loans through their own channels.
