The Bangladesh Bank has set Tk28,391 crore credit target for the agriculture sector in 2021-22 fiscal year amid the pandemic, which is around 8% more than the previous year's goal.
Besides, the Agricultural and Rural Credit Policy and Programme for the current year lowered the farm loan interest to 8% from the existing 9% rate.
The Agricultural and Rural Credit Policy and Programme has been formulated in line with the government's plan to offset the pandemic fallout and agriculture and farmer-friendly policy, said the central bank in a press release Thursday.
"Its main objective is to increase agri production by increasing the credit flow in rural areas to alleviate poverty, reduce hunger and develop the rural economy," said the central bank.
Of the total Tk28,391 crore credit target, state owned and specialised commercial banks will distribute Tk11,045 crore, while private and foreign commercial banks will distribute Tk17,346 crore.
The central bank set the credit target at Tk26,292 crore last year as the banks distributed Tk25,511 crore – which is around 97% of the target.
The Bangladesh Bank said around 30.55 lakh borrowers availed the agri loan last year, and of them more than 16 lakh borrowers were women.
Around 22.45 lakh small and marginal farmers received nearly Tk17,364 crore farm credit last year. In the recently concluded 2020-21 fiscal year, 7,796 farmers from low-lying char, haor and less developed areas of Bangladesh availed Tk33,096 crore agri loans.
In the new credit policy, the central bank mentioned several schemes to make farm loans easier.
The schemes include loans for farming Sonali chicken, buffalo and Garol variety sheep, increasing the per acre credit limit up to 15% considering the demand of the farmers and actual state of farming activities in a particular area, increasing the per acre credit limit for fish farming, and taking up effective measures by banks to supervise the disbursed credit.
The Bangladesh Bank said it formed a Tk5,000 crore refinance scheme to help mitigate the pandemic shock last year, and banks under the fund disbursed Tk4,295 crore agri loans until June this year.