The Bangladesh Bank has set a farm loan disbursement target of Tk24,124 crore for banks for the current fiscal year
Lending to the agriculture sector increased by 9.29 percent to reach Tk13,104 crore between July and January of the current fiscal year compared to the same period of the previous financial year, according to the central bank data.
The amount was Tk12,101 crore, which was 55.51 percent of the loan disbursement target for the fiscal year 2018-19.
In the first seven months of the 2019-20 fiscal year, the disbursed volume amounted to 54.32 percent of the disbursement target for the current fiscal year.
The Bangladesh Bank has set a farm loan disbursement target of Tk24,124 crore for banks for the current fiscal year, up by 10.66 percent from the previous fiscal year's target.
During the first seven months of the previous fiscal year, farm loan disbursement decreased by 2.59 percent for liquidity crisis.
Now, the banks have almost Tk1 lakh crore in their funds, and can expand agri-credit amid poor growth of private sector credit.
In the current fiscal year, almost 40 percent of banks failed to achieve farm loan disbursement target, said officials of the central bank.
Md Ali Hossain Prodhania, managing director of the Bangladesh Krishi Bank, told The Business Standard, "The banks which failed to meet the agricultural loan disbursement target will be able to cover that by this fiscal year easily as March is the season of Boro rice."
Outstanding loan in the agriculture sector stood at Tk43,318 crore at the end of January this year.
In the first seven months of the current fiscal year, banks recovered an amount of Tk13,528 crore of the previously disbursed agri-credit.
At the end of January this year, the percentage of default loan in the agricultural sector decreased to 10.13 percent from 12.39 percent in the same month of 2019.
Except Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank, all other banks have to disburse at least 2.5 percent of their total credit in the agriculture sector.
Also, every bank's agri-credit lending rate would be maximum nine percent.