Agri credit disbursement rises, 51% target achieved in 6 months
Banks disbursed Tk14,497 crore of agriculture and rural credit in the first six months (July-December) of the current fiscal year, up by 16.68% from the corresponding period in the last fiscal year.
51% of the target for this fiscal year has been disbursed.
The credit disbursement increased as demand rose among farmers to grow winter vegetables, revealed the latest report of Bangladesh Bank (BB).
In FY21, Tk12,077 crore of credit was disbursed, July-December, 45.94% of target agricultural bank credit.
In FY22, the target is to disburse Tk28,391 crore in agricultural loans but banks cannot fulfill the target due to the Covid pandemic.
According to BB, banks lagged behind in disbursing agricultural loans in the first two months which changed later and stabilised in December last year. Agri loan disbursement fell as low as 21% in the first two months.
In December, agricultural loans amounting to Tk3724 crore were disbursed. The amount was Tk2864 crore in November, Tk2695 crore in October, and Tk2536 crore in September.
The report shows that although loan disbursement increased in July to December, the repayment rate was low amounting to Tk13,593 crore. Repayment was higher for the same period in the previous fiscal year.
Loan collection was Tk14,091 crore in the first six months in FY21.
Outstanding agricultural loans reached Tk47659 crore in July-December.
A stimulus package of Tk5,000 crore was also announced to be disbursed in April due to the Covid pandemic and a total of Tk4295 crore was disbursed until June last fiscal year.
Another refinancing program of Tk3000 crore was formulated for the agricultural sector in September last year.
The BB report said, "Bangladesh Bank provides policy directions to expedite credit flow to all sub-sectors in agriculture and non-farm activities in order to promote inclusive economic growth".
Agriculture has experienced a steady rise in crop production over the years as high attention has been given to the sector. Non-crop food production like fisheries and livestock, and poultry farming, are also gaining momentum, the report added.
Banks could not achieve their targets of agricultural credit disbursement for the first time in 2019-20 due to the Covid outbreak.
In FY21, banks achieved 97% of their targets amounting to Tk25511 crore of a total of Tk26,292 crore.
