Despite last year's devastating floods and the ongoing Covid-19 pandemic, farmers did not demonstrate any unwillingness to repay loan instalments.
The growers have even repaid loans in a bigger amount ignoring a special facility of non-payment of instalments put in place to ward off the pandemic shock.
In the first seven months of the current fiscal year, farmers repaid Tk2,500 crore more than that of the same period of the previous fiscal year.
The amount of repaid instalments is Tk16,000 crore, according to an analysis of the Agricultural and Non-farm Rural Credit published by the central bank on Thursday.
People concerned say that because of the disruption in production due to floods, farmers have received better prices of paddy during the Aman season last year. This has also helped make a positive impact on the repayment of loans.
Dr Mohammad Jahangir Alam, professor of agribusiness and marketing department at Bangladesh Agricultural University, told The Business Standard that farmers have repaid their loan instalments because they had money in hands.
Meanwhile, the disbursement of farm loans has increased during the July-January period.
Although the production and services sectors were affected by the ongoing pandemic, the demand for loans did not decrease due to its low impact on agricultural production.
Jahangir Alam said, "Usually, farmers have demand for loans during and before harvesting. The Aman season has been going on since October last year, which has made a positive impact on the overall loan disbursement."
Although the distribution and collection of loans have increased in seven months, the collection and distribution in January this year has decreased as compared to January last year.
Jahangir Alam said, "The demand for the loan has come down in January because the Aman season is running out. On the other hand, farmers have less cash so the collection has also decreased."
The Boro season will start in April next. He is of the opinion that the demand for loans may increase from March ahead of this season.
The target for disbursement of agricultural credit has been set at Tk26,000 crore for the current financial year, which is 20% more than the previous financial year.
However, banks are lagging behind in disbursing agricultural loans as per the target. Less than half of the loans have been disbursed in the first seven months of the current fiscal year.