More private banks' farm loans to help achieve over 6pc GDP growth: Atiur

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FE Report
Bangladesh Bank Governor Dr. Atiur Rahman said Saturday that an increased flow of farm credit from private banks and a subsequent rise in domestic consumption were likely to help achieve the GDP growth of over 6.0 per cent, a target set for the fiscal 2009/10.
"We are aiming for a growth in gross domestic product (GDP) at more than six per cent, and it will be driven by a boost in agriculture production as well as domestic demand," he said at the launching of the Exim Bank agro-credit scheme "Exim Kishan" in the city.
The central bank governor's remark came days after the visiting International Monetary Fund (IMF) mission projected a deceleration of the country's economic growth rate to 5.0 per cent, which it said, would be caused by renewed inflationary pressures due to economic slowdown and huge excess liquidity in the banking system.
Referring to that projection, BB Governor said: "Despite the negative forecast from IMF, we are still confident of a six per cent plus growth driven by a further boost in agriculture, thanks to increasing flow of agro-credit".
The Governor also credited the private banks for complying with the central bank's new agro-credit policy of increasing loan facility to the farmers which, he said, would raise the GDP growth to the expected level.
Around Tk. 25 billion worth of farm loan is likely to be offered to the farmers
through private banks, BB governor informed, adding that already a number of private banks had started bringing their products at the grass root level.
"Now that the private banks have increasingly started channelling loans to rural farmers, this will not only boost the agriculture but also is likely to increase the income and affordability of the rural community," Dr Atiur said.
"This, at the end of the day, will come as a boost to the local industries because there will be rise in domestic demand and consumption as a result of the increase in the affordability of the majority consumers," he added.
Bangladesh Bank Governor also advised the private banks to disburse loans in the rural areas through delivery agents in the absence of local branches and also asked them to provide loans for livestock, agricultural machineries alongside crops.
Referring to various BB initiatives to bolster the growth of agriculture and SME, the BB Governor said that Tk. 6.0 billion has been allocated for SME refinancing while steps have been taken to give loan facilities to 0.5 million share croppers.
Later, he launched the agro-loan product of Exim Bank called 'Exim Kishan' as he handed over the loan to a number of rural farmers.
This collateral free loan is targeted at financing rural farmers in crop cultivation, livestock and fisheries venture.
Earlier, President of Association of Bankers Bangladesh K Mahmood Sattar in his speech said: "In five years' time, agriculture banking will be as much lucrative as SME banking" adding, "Agro-credit is no more a CSR activities; rather it's a profitable banking commodity."
President of Bangladesh Association of Banks Nazrul Islam Mazumder said: "The recent trend among the private banks of introducing agricultural loan facilities is a consequence of the present Bangladesh Bank policy of facilitating the agriculture sector."
Managing Director of Exim Bank Limited Kazi Mashiur Rahman, Member of Parliament Md. Abdul Mannan, among others, also spoke on the occasion.