PCBs focus on farm loans

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Md Mazadul Hoque
The country's private banks have been focusing on farm loans without undermining corporate financing as per the directive of the central bank, bankers said.
The banks are shifting their priorities investment to the agri-sector from once-dominant corporate lending to achieve the additional target of 150 per cent growth in the current fiscal from the previous year, they said.
According to BB circular issued on March this year, all banks should make a logical level of investment in giving attachment to agriculture and rural loans.
The directives of the central bank came as a welcome blessing for the people involved in agriculture sector, who have been suffering from acute credit crisis due to poor access to finance.
"Yes, we're now highlighting agriculture loans to meet the requirements set by the BB," Deputy Managing Director of Mercantile Bank Monindra Kumar Nath said.
Mercentile Bank, which emphasised much on corporate loans a few months ago, will disburse Tk 1.43 billion in agri-loans in the current fiscal.
"Of the target, we've already distributed TK 288.8 million among the farmers till November this year," he said, adding that the bank had given agriculture loans of Tk 126.6 million in the 2010-2011 financial year.
Though Social Islami Bank Ltd (SIBL) stood by the farmers disbursing Tk 0.29 billion in last fiscal but in current fiscal agri-loan has been made double.
Deputy managing director at the bank, AMM Farhad told the FE : We've targeted to disburse farm loan of Tk 0.52 billion in the current fiscal and in next fiscal the figure must be increased depending farmers' demand.
He said the banks are providing sufficient agri-loan facilities. For this agriculture industry can help the developing country step into the block of developed nations.
"The country's economy growth will not reach the expected level without development of the agriculture sector accounting for nearly 20 per cent of GDP (gross domestic product)," he said.
Eastern Bank Ltd has set a target to disburse farm loans of TK 1.17 billion this fiscal.
A high official of bank's SME division told the FE : "30 per cent of total target has been disbursed up to November this fiscal.
In last fiscal the bank totally disbursed Tk 0.3 billion and this fiscal the budget has been increased as the loan recovery rate was high. If the trend continues, the budget would be increased in future, he added.
Now we have introduced a system of providing loans to farmers directly and in future more steps would be taken for the changing the fate of the farmers in this regard, the official said.
Mutual Trust Bank (MTB) which was totally involved in corporate sector up to last fiscal but from this fiscal the bank targeted Tk 0.85 billion for agri loan, he added.
As central bank did not have any target on agri sector from the beginning, MTB management did not pay heed to this sector but now agri sector must be given priority, head of corporate affairs, Sami -Al Hafiz told the FE.
We have already achieved 40 per cent of the target and expect to cross the target by the end of the fiscal year, Mr Hafiz also said.
As the country is still placed among developing countries in the world, expediting agri sector can help the country obtain the status of a developed country, Mr Nath also said.
He said no country would be developed without agro based economy. So the decision of central bank in this regard is praiseworthy.
SME focused BRAC Bank is disbursing a high amount of farm loan through a number of Non Government Organisations (NGOs).
Managing director at the bank, Syed Mahbubur Rahman told the FE: " the bank is now financing the farmers to buy Tructor and other necessary agri instruments which are basic tools for agricultural development.
"We have also introduced disbursing poultry loans as this sector is one of speedy vehicles of economic development, Rahman said.
The bank is completely following central bank's guide line for disbursing agri loan, Mr Rahman also said.
According to Bangladesh Bank, up to September 2010, out of targeted Tk 138 billion, Tk 20.52 billion in agri credit has been disbursed in the current fiscal and Tk 121.84 billion was disbursed in last fiscal (2010-11).