Farm loan sees 10.55pc growth in July-March
Agricultural loan disbursement up 10.55% in FY 2023-24. Bangladesh Bank data shows Tk 266.67 billion disbursed. Repayment increases.
Agricultural loan disbursement witnessed a 10.55-percent increase during the July-March period of current fiscal year (FY 2023-24) compared to the matching period of last FY.
According to Bangladesh Bank data, the agriculture and rural credit rose to Tk 266.67 billion at the end of third quarter (Q3) of this FY from Tk 241.22 billion in Q3 of FY 2022-23.
The scheduled banks disbursed Tk 29.76 billion in March this year, indicating a substantial 17.36 per cent growth over February disbursements of Tk 25.36 billion.
Until March last, the outstanding balance with interest on farm credit reached Tk 565.65 billion, marking a spike of 10.31 per cent than the same period in the preceding FY.
The outstanding balance of farm credit was Tk 512.77 billion in July-March period of FY2022-23, the BB data revealed.
On the other hand, the credit recovery was recorded at Tk 254.10 billion in July-March of the current FY, which was 4.91 per cent higher than the same period of last FY. Such recovery reached Tk 242.20 billion in the same period of last FY.
Policy Exchange of Bangladesh Chairman and CEO Dr M Masrur Reaz stressed the critical necessity of enhancing domestic agriculture production to safeguard the country’s food security for a population exceeding 170 million.
He emphasised that ensuring uninterrupted food supply and agricultural production is paramount, highlighting the significance of farm loans in attaining this objective.
The economist also underscored the importance of maintaining normalcy in the supply of agricultural inputs.
On May 22 in 2022, the BB asked the banks to disburse farm credit at a concessional interest rate of 4.0 per cent, especially for import-substitute crops like pulses, oilseed, spices and maize.
Farmers availed loans amounting to Tk 328.29 billion in FY23. Their repayments totalled Tk 330.10 billion.
The majority of these loans were facilitated through non-governmental organisations (NGOs). Farmers accessed loans from banks at a lending rate of 8.0 per cent, whereas loans acquired through NGOs carried higher rates ranging from 24 to 30 per cent.
Due to inherent challenges faced by banks in directly reaching farmers at grass-roots level, they channel loan disbursements through NGOs, which, in turn, disburse the funds at elevated interest rates.
To provide farmers with loans at more favourable rates, the regulator has instructed banks to disburse a minimum of 50 per cent of their total loans through their channels.
Source Link: https://today.thefinancialexpress.com.bd/last-page/farm-loan-sees-1055pc-growth-in-july-march-1714933298
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