Banks get 3 more months to disburse farm credit stimulus

The Bangladesh Bank on Sunday extended the deadline for disbursement of the Tk5,000 crore stimulus fund for the agriculture sector by three months.

The central bank extended the deadline for smooth implementation of the stimulus amid slow progress in disbursement, says a central bank circular issued on the same day.

The deadline for the disbursement of loans, from the stimulus package, has been extended to December 31 from September 30, reads the circular.

Although the agricultural sector has taken a twin blow of protracted pandemic and prolonged flooding, six banks have not yet disbursed any fund from the Tk5,000 crore package.

Also, other banks have disbursed only Tk1,114.16 crore farm credit among 46,815 farmers from the package till August, according to the latest Bangladesh Bank data.

In April, 43 banks signed participation agreements with the central bank on disbursing farm credit from the low-cost stimulus fund. 

And the Bangladesh Bank also set separate disbursement targets for them.

At an online meeting with banks on September 2, senior officials of the Bangladesh Bank expressed dissatisfaction over the slow disbursement of loans to the agriculture and cottage, micro, small and medium enterprise (CMSME) sectors from stimulus funds. 

Earlier, the central launched a Tk5,000 crore stimulus fund for the agriculture sector on April 14 to cushion the economic losses caused by the pandemic.

The loan tenure was set at 18 months, including a grace period of six months.

Banks are now borrowing the fund at a 1% interest rate and lending at 4% to farmers in line with the central bank guidelines.