Agriculture Minister Muhammad Abdur Razzaque said that it is possible to provide genuine farmers with collateral-free loans on simple terms.
"The government is offering agri loans to farmers at only a 4% interest rate. But the farmers often cannot fulfil the complicated terms in getting the loan," he told a seminar on financial inclusion of the country's livestock sector in Dhaka on Sunday.
Abdur Razzaque called for easing the lending process for farmers and rolling out collateral-free agri loans.
Ainul Haque, United Nations Industrial Development Organization (Unido) Bangladesh project coordinator and also the former director general of the Bangladesh Livestock Research Institute, presented the keynote at the programme.
The keynote pointed out that small farmers in the livestock sector shy away from agri-loans thanks to complicated lending processes, reluctance of banks and lack of collateral.
In rural Bangladesh, 75% of the borrowing families take loans from NGOs at 20%-30% interest as agro-industries are being provided with the agri-loans, according to the paper.
It said the livestock sector got only 14% of the farming loans disbursed in the 2021-22 fiscal year.
In the livestock sector, Ainul Haque labelled infectious diseases, management issues and lack of institutional facilities for insurance as major barriers for financial inclusion.
Stressing on insurance for all domesticated animals, the agriculture minister also said the livestock sector must come under insurance services.
Abdur Razzaque said the livestock sector has a lot of potential to meet the nutritional demands of the nation.
"But surprisingly our farmers sell milk at a throwaway price, while we have to spend Tk2,000 crore every year for importing milk," he said.
Dhaka University banking and insurance department Professor Hasina Sheikh and other discussants at the seminar called for establishing a database and policy for small farmers for financial inclusion.