Bangladesh Krishi Bank's low-interest loan programme for the ultra-poor, launched to mark Bangabandhu's 100th birth anniversary, will be expanded fourfold.
The specialised bank formed a Tk300 crore special fund for landless farmers last year and started disbursing funds from it at a collateral-free 7% simple interest from 17 March.
As the Krishi Bank had disbursed most of the funds, it asked for an interest-free fund of Tk1,000 crore from the government to continue the programme till next March.
The new fund will allow another 1.5 lakh farmers to get subsidised loans. Under the current programme, Krishi Bank is giving Tk20,000 to Tk1 lakh loans to borrowers.
Bangladesh Krishi Bank Managing Director Ali Hossain Prodhania told The Business Standard landless farmers, who do not get agricultural loans, are benefitting from this Tk300 crore fund.
"As there is a great demand for the loan, we have asked the finance ministry for interest-free funds of Tk1,000 crore. As the ministry wanted to know how the extra funds would be disbursed, we informed them about our plan," Ali Hossain said.
"I hope either the ministry or the Bangladesh Bank will make arrangements for this fund. We are determined to continue this programme," he added.
Loans worth Tk213 crore – more than 71% of the total fund – were disbursed to 29,070 families under the Tk300 programme till 21 September, according to Krishi Bank.
The consequences of Covid-19, cyclonic storm Amphan and floods multiplied the demand for this loan.
So, Krishi Bank has sent a proposal to the Financial Institutions Division to increase the size of the fund to Tk1,300 crore, showing the possibility of creating employment in the rural economy and raising the income of marginalised people.
The finance ministry officials said they are positive about the proposal.
Tk300 crore short-term loan is being disbursed as working capital
A Krishi Bank official said the Tk300 crore short-term loan is being disbursed as working capital.
Villagers or farmers who have a homestead and cultivable land of fewer than 1.5 acres, and annual income of up to Tk1 lakh are eligible for loans under this programme.
The ultra-poor, who cannot provide collateral, are being prioritised for loan disbursement.
Also, Krishi Bank is giving priority to women and marginalised people while selecting borrowers.