Disbursement of agricultural credit increased in the first five months of the current financial year compared to the same period of the previous year.
However, the rate of disbursement against the annual target is slightly lower year-on-year in the July-November period of this fiscal year.
According to Bangladesh Bank sources, about one-third of the annual agricultural loan disbursement target has been disbursed during the first five months of this fiscal.
The annual farm loan disbursement target for the current financial year has been fixed at Tk26,292 crore. In the July-November period, Tk8,935 crore has been disbursed, which is 33.98% of the annual target.
In the previous financial year, 34.42% of the annual target was disbursed in the first five months.
Of the agricultural loans disbursed in the July-November period of this year, Tk4,772 crore was provided in crop loans, Tk88 crore for purchase of irrigation machineries, Tk1,347 crore to the livestock and poultry sector, and Tk979 crore to the fisheries sector.
Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), told The Business Standard that the disbursement of loans increased year-on-year in the July-November period of this fiscal, due to the ongoing implementation of incentive packages.
On the other hand, the rate of disbursement against the annual target is slightly lower, as the production, supply, storage, and processing of agricultural products were impacted by flooding and Covid-19 earlier this year, he added.
However, farmers will be encouraged to increase production in the days ahead due to increased fertility of post-flood lands, higher prices due to shortage of supply of agricultural products, he observed.
Golam Moazzem thinks this will also increase the demand for loans.
Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank will disburse about one-third of the annual target for disbursement of agricultural loans.
The two banks will disburse Tk7,850 crore in the current financial year. In the July-November period, they disbursed only Tk2,921 crore, which is 37% of their annual target.
As of November, the loan recovery rate of the two banks has increased by 22.5% over the previous year.