Banks in the country disbursed Tk2,674 crore in agricultural loans in July-August this year, down by 22% when compared to the corresponding period of last year, according to the Bangladesh Bank.
In the July-August period of last year, the agriculture sector received Tk3,456 crore in loans from the banking system.
When asked to comment on this, Professor Mustafizur Rahman, special fellow at the Centre for Policy Dialogue, told The Business Standard that the agriculture sector played a vital role in keeping the economy afloat amid the coronavirus crisis.
Mentioning that disbursement of agricultural loans by banks was good last year, he said the authorities should check out why agricultural loan disbursement was low in the first two months of the current fiscal year.
The noted economist, however, observed that it would not be wise to draw a conclusion as agricultural loans are disbursed according to cultivation seasons.
"The real picture will be understood after a few more months."
Despite the impact of the novel coronavirus, the disbursement of agricultural loans in FY21 was satisfactory. Even though banks were reluctant to disburse loans to other sectors of the country due to the pandemic, they disbursed more loans to farmers.
The government's agri loan disbursement target in the current FY22 is Tk28,390 crore – 7.98% higher compared to last year. Of the amount, Tk11,045 crore is supposed to be disbursed by state-owned banks while private-sector and foreign banks will give out the remaining Tk17,346 crore.
The central bank's latest report on agricultural loans shows 8 private banks and 7 foreign banks could not meet even 1% of their agri loan disbursement target.
The private banks are AB Bank, Bangladesh Commerce Bank, Bengal Commercial Bank, Community Bank, Jamuna Bank, Modhumoti Bank, NRB Bank and Union Bank. The foreign banks are Citibank NA, Commercial Bank of Ceylon, Habib Bank, HSBC Bank, Standard Chartered Bank, State Bank of India and Woori Bank.
Eight state-owned banks disbursed Tk1,045 crore – almost 10% of the target set for the year – in the first two months of the fiscal.
Last year, the bank sector met about 98% of the yearly target of disbursing Tk26,292 crore.
The Bangladesh Bank says the number of agri loan recipients was a little over 30.55 lakh in the last financial year. Of them, 16 lakh women received Tk9,287 crore.
With a view to tackling the financial crisis induced by the pandemic, the government, meanwhile, has formulated a special refinancing scheme of Tk3,000 crore for farmers for the current financial year. Farmers will be able to take loans from this fund on easy terms without collateral at only 4% interest.
In the current Fiscal Year, the Government has paid special attention to increase agricultural production in rural areas to alleviate poverty, alleviate hunger and develop the rural economy in line with the government's financial and agri-friendly policy in tackling the financial crisis caused by the Corona epidemic.
Notable additions to the policy include: reductions in interest rates on loans for raising Sonali chickens, buffaloes and Garole sheep.