Agricultural credit recovery up 6.9pc in FY25
Business Report :
The recovery of agricultural credit by all scheduled banks in Bangladesh exceeded total disbursement during the financial year 2024-25, despite disruptions caused by political transition and widespread flooding.
According to the latest data from Bangladesh Bank, scheduled banks recovered Tk 38,024 crore in agricultural loans in FY25, marking a 6.9 per cent increase from Tk 35,571 crore recovered in the previous year. In comparison, total agricultural loan disbursement stood at Tk 37,326 crore – marginally higher (0.46 per cent) than in FY24, but Tk 674 crore below the central bank’s disbursement target of Tk 38,000 crore for the fiscal year.
The FY25 target itself represented an 8.57 per cent increase from the Tk 35,000 crore target set in FY24, reflecting the growing emphasis on supporting the agriculture sector amid a global economic downturn.
While banks fell slightly short of the annual disbursement goal, the improved recovery rate was notable, particularly given the adverse conditions farmers faced. The latter half of 2024 saw significant crop damage due to floods, and the July uprising further disrupted agricultural value chains, particularly in marketing and sales of harvested produce.
As of June 2025, the total outstanding balance of agricultural credit – including accrued interest – reached Tk 60,232 crore, reflecting a 3.63 per cent rise year-on-year.
Sector-wise, crop cultivation received the largest share of agricultural credit at 46 per cent, followed by livestock and poultry (24 per cent), fisheries (15 per cent), and poverty alleviation programmes (5 per cent).
Given agriculture’s critical role in the national economy – with over 40 per cent of the workforce directly engaged in the sector – access to timely and affordable credit remains vital to sustaining rural livelihoods and food production. Farm loans help boost productivity by enabling investments in inputs such as seeds, fertilisers, and agricultural machinery. In addition to enhancing output, these loans also contribute to rural development by creating income opportunities and supporting local infrastructure.
In an effort to support import-substituting crop cultivation, the central bank in May 2022 directed banks to provide credit at a concessional 4 per cent interest rate for specific crops including pulses, oilseeds, spices, and maize. In FY23, banks disbursed Tk 32,829 crore in agricultural and rural loans, up from Tk 28,834 crore in FY22.
