Although the economy was down during the pandemic, farmers did not give in, rather they are repaying loans at a rate higher than they did a year ago.
The information was revealed in the Monthly Report on Agricultural and Rural Financing published by the central bank on Wednesday.
The report highlights the situation of disbursement and collection of agricultural loans for the four months from July to October of the current financial year.
It says the annual agricultural credit disbursement target has been fixed at Tk26,292 crore for FY21.
In the first four months (July-October) of the current financial year, the disbursement of agricultural credit was 25.22% to Tk6,629 crore, which was 9.5% more than the same period of the previous fiscal.
The distribution of loans among farmers increased by 9.5% in July-October compared to that in the same period of the previous fiscal while the collection increased by more than 25%.
Asked about it, Professor Mohammad Jahangir Alam of the Department of Agribusiness and Marketing, Bangladesh Agricultural University, told The Business Standard that even though agricultural production was not hampered due to Covid, the marketing activity was.
But as the farmers got a good price from boro harvest toward the end of July, their ability of loan repayment increased.
In addition, they are repaying more and more loans for the purpose of taking new loans.
Apart from this, farmers are more sincere in repaying the loans than big borrowers.
According to the academician, all these have had a positive impact on borrowing and repayment.
Besides banks and financial institutions, the disbursement and repayment of loans by the Rural Development Board has also increased.
The disbursement target of Bangladesh Rural Development Board was fixed at Tk957 crore for FY21.
During July-October of FY21, the Rural Development Board disbursed over Tk333 crore and recovered more than Tk318 crore which was 12.63% and 7.43% higher respectively than what the figure was in the same period a year ago.
Apart from agricultural loans, the rate of repayment of small loans taken for productive and income-generating sectors in rural areas is also satisfactory.
Last October, small loan repayments declined slightly compared to the same period of the previous year.
The Bangladesh Bank report said in October 2020, Grameen Bank and a number of nine large NGOs disbursed Tk9875.38 crore in productive and income-generating activities in rural areas under their microcredit programmes which was 6.29% lower than that in the same period of the preceding year.
However, in October 2020, the total recovery of the microcredit by these 10 microfinance institutions stood at Tk9780.96 crore, which was 5.30% lower than that in the same month of the previous year due to the outbreak of Covid-19 pandemic.
The report reiterated the importance of the agricultural sector in terms of food security and employment, even though the agriculture's share in Gross Domestic Product (GDP) has declined.
This sector contributes to major macroeconomic objectives like employment generation, poverty alleviation, human resources development, food security for 170 million people of the country.
However, farming continues to play a pivotal role in the country as well as in the world.
The central bank has continued its proactive policy and support programme to boost production.