Farm-credit disbursement dropped over 11 per cent to Tk162.59 billion in the first half of this fiscal year mainly as political uncertainty, floods and interest-rate hike harmed the crops sector, officials said.
The H1 disbursement of agriculture loans during the July-December period in the previous financial year (FY) 2023-24 was Tk183.26 billion, according to Bangladesh Bank's latest statistics.
Of the total, eight public banks lent Tk 71.38 billion and the remaining Tk 91.21 billion was disbursed by the private commercial banks (PCBs) and foreign commercial banks (FCBs).
The central bank is set to give fresh instructions to the eight state-run banks today (Tuesday) for boosting their lending activities across the country for ensuring food security through boosting agricultural production, according to the officials.
"We'll ask all the public banks for taking effective measures to expedite their loan-disbursement initiatives aiming to achieve the agricultural-loan-disbursement target by the end of June 2025," a senior BB official told the FE Monday.
Farm-credit recovery along with other relevant issues will be discussed at the review meeting, according to the official.
The eight public lenders are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BASIC Bank, Bangladesh Development Bank, Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB).
Similar review meeting with senior officials of PCBs and FCBs is scheduled to be held within the last week of February on the same grounds, the official added.
Meanwhile, all the scheduled banks have achieved 42.79 per cent of their FY'25 agricultural-loan-disbursement target, fixed at Tk 380 billion. It was 52.36 per cent in the same period of the FY'24.
"Political uncertainty, devastating floods and higher interest rate pushed down farm-credit disbursement in the H1 of FY'25," another BB official said while explaining the latest trend in lending to farmers.
The central bank has already strengthened its monitoring and supervision aiming to get to the goal in disbursement of loans by the end of this fiscal year, the BB official noted.
A senior BKB official, however, said the disbursement of farm loans already started showing an uptrend that will be continued until March to meet the growing demand from the farmers.
Meanwhile, the recovery of farm loans rose to Tk 191.17 billion during the period under review from Tk 177.79 billion in the same period of FY'24, the BB data showed.
siddique.islam@gmail.com
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