Disbursements of agricultural and rural credit witnessed a significant surge during the first eight months of the current fiscal year, official data revealed.
According to latest Bangladesh Bank (BB) figures, the country's scheduled banks disbursed Tk 274. 80 billion worth of farm credit during the July-February period of FY 2025-26, reflecting a 24.20 per cent growth over that of Tk 221.26 billion disbursed in the corresponding period of FY25.
Such a robust growth was largely propelled by the proactive involvement of private commercial banks (PCBs), which took the lead in the credit disbursements, complemented by steady contributions from both state-owned specialised and commercial banks.
On the other hand, overdue agricultural loans in the country's banking sector more than doubled year-on-year by the end of February 2026, signaling rising stress in farm credit recovery despite continued loan disbursement growth.
Overdue agricultural credit refers to farm loans that borrowers have failed to repay within the scheduled repayment period.
Overdue agricultural credit in all scheduled banks surged to Tk 229.16 billion at the end of February 2026, marking a 123.90 per cent rise from Tk 102.35 billion in the same period a year earlier.
The sharp rise in overdue loans was mainly driven by increased defaults in state-owned specialised banks (SOSBs), state-owned commercial banks (SOCBs), and private commercial banks (PCBs).
The outstanding agricultural credit balance, including interest, stood at Tk 637.23 billion at the end of February 2026, registering an 11.66 per cent increase from Tk 570.67 billion a year ago.
In FY26, the agricultural credit disbursement target was set at Tk 390 billion, up by 2.63 per cent increase from Tk 380 billion in FY25 and 4.48 per cent increase over the actual disbursement of Tk 373.26 billion in FY25.
According to the BB data, all scheduled banks disbursed Tk 31.20 billion in agricultural credit in February last,, which was 6.89 per cent lower than that of Tk 33.51 billion in the previous month.
However, the disbursed amount was 7.21 per cent higher than Tk 29.10 billion disbursed in February 2025.
All scheduled banks recovered Tk 28.47 billion worth of farm credit in February 2026, reflecting a 9.49 per cent decline from that of Tk 31.46 billion in the previous month.
Meanwhile, Grameen Bank and ten large NGOs collectively disbursed Tk 172.32 billion in microcredit in February 2026, posting a marginal 0.08 per cent increase over the corresponding period of 2025.
Their loan recovery reached Tk 160.46 billion during the month, which was 5.45 per cent higher than the recovery recorded in February 2025.
At the end of February 2026, the outstanding microcredit balance of those organisations crossed Tk 1.33 billion, while their overdue loans amounted to Tk 84.25 billion, representing 6.31 per cent of the outstanding balance.
"The sharp rise in overdue agricultural loans signals growing stress in the rural economy and weaknesses in credit recovery mechanisms," said Dr Masrur Reaz, chairman, Policy Exchange Bangladesh.
He said rising input costs, climate shocks, and structural inefficiencies in agricultural lending might have affected farmers' repayment capacity, particularly in state-owned banks.
He suggested strengthening monitoring, improving risk assessment, and providing targeted support to genuine farmers to contain rising defaults.
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