54% of annual agri loan target achieved in H1

The country's banks distributed Tk16,670 crore in agricultural loans in the first half of FY23, which is 54% of the Tk30,911 crore annual target, according to the latest data of the central bank.

The high growth in agriculture loan disbursement came as the government has been campaigning for higher local production of agricultural items, instead of imports, amid the global uncertainty in the food market caused by the Russia-Ukraine war, sector insiders said.

In FY22), the lenders also surpassed the agri loan target of Tk28,391 crore.

The Bangladesh Bank data says lenders distributed Tk7,915 crore loans for crop cultivation, Tk149 crore for the purchase of irrigation equipment, Tk113 crore for the purchase of agricultural equipment, Tk3,485 crore for cattle and poultry farms, Tk2,018 crore for fisheries, Tk87 crore for grain storage and marketing, Tk1,014 crore for the private sector and Tk1,900 crores for miscellaneous sectors between July and December last year.

Despite high growth in overall disbursement, at least 25 banks failed to achieve their lending targets for the sector, it said.

Meanwhile, banks received almost the same amount, Tk16,429 crores to be exact, in repayment of previously distributed agricultural loans. The debt collection from this sector was Tk13,593 crore in the same period of the previous fiscal.

It is very common that some banks disburse much more agricultural loans than the targets every year, while some struggle to achieve the targets. To fix the issue, the central bank has recently formed the Agricultural Development Common Fund under which banks can share their funds allocated for loans to the agriculture sector with each other.

Besides, the Bangladesh Bank in November last year announced a Tk5,000 crore refinancing scheme for farm loans at 4% interest ahead of Boro season to help farmers meet their cash needs amid growing input costs.  But the response from farmers so far remains poor, reports our district correspondents.