BB unveils Tk164bn farm loan policy

Bangladesh Bank (BB) on Monday rolled out the agriculture and rural credit policy for the financial year 2015-16 (FY16), setting a target of disbursing farm credit of Tk164 billion in the next 12 months.
Governor Dr Atiur Rahman unveiled the credit policy at the central bank's headquarters in the capital city with a projection of 5.5 per cent rise in the loan disbursement target for the current financial year. The disbursement target for the immediate past 2014-15 financial year (FY15) was Tk155 billion.
The actual disbursement, however, was 3.0 per cent higher than target when 47.6 per cent of the total disbursed credit had gone to crop sector, a BBS report said.
"The policy for the FY16 incorporated some new issues and strategies like expanding the coverage of farm and rural credits, taking strategic steps to spread out rural banking, bringing farmers under the institutional financial services, encouraging production of export-substitute crops and emphasising development of fisheries and livestock," said the governor.
He said all the banks including public, private and foreign-owned ones have been asked to disburse at least 2.5 per cent of their loan portfolio to the farm and rural sector when the nine new banks were advised to disburse 5.0 per cent.
"The undisbursed amounts should be deposited by the respective banks to the BB's block accounts at the end of the financial year," he said.
Like previous years, the central bank in the new policy kept focusing on driving agriculture growth providing farmers with necessary financial support from institutional sources. The credit policy also asked for special attention of banks and financial institutions to protect farmers from the adverse impact of climate change.
Dr Rahman said the credit policy would encourage use of natural fertilizer instead of chemical ones when producing compost would get cheap financing from the BB's refinancing scheme.
He said all the banks would also upload the loan application form on their website besides publishing those in the newspapers.
The governor also listed some of the major achievements in the farm loan disbursement last year. According to the him, 5.243 million small and marginal farmers received Tk112.03 billion or 70 per cent, 56 thousand sharecroppers got Tk9.14 billion or 5.72 per cent and 66 thousand women were given Tk 9.92 billion or 5.64 of the total loan disbursement.
Besides, non-government organisations (NGOs) disbursed Taka 4.5 billion among 0.16 million sharecroppers under a special programme of the central bank.
Dr Rahman said the loan recovery was 70 per cent last year, but banks should be more active and sincere in their loan recovery drives.
-SS