Farm credit disbursements fall 14pc in July-November

Farm credit disbursements fell by more than 14 per cent in the first five months of the current fiscal year (FY 2024-25) mainly due to higher interest rate and political uncertainty, officials said.
The loans disbursed came down to Tk 130.81 billion during the July-November period of FY '25 from Tk 152.80 billion in the same period of the previous fiscal year, according to the Bangladesh Bank's (BB) latest statistics.

Of the credit disbursed, eight public banks disbursed Tk 56.29 billion, and the remaining Tk 74.52 billion was disbursed by the private commercial banks (PCBs) and foreign commercial banks (FCBs).
The central bank is set to issue a fresh instruction for all the scheduled banks next month (February) to strengthen disbursements across the country for ensuring food security through boosting agricultural productions, according to the officials.
"We'll ask all the banks for taking effective measures to expedite their loan disbursement initiatives from February, aiming to achieve the target by the end of June 2025," a BB senior official told the FE on Wednesday.
He said the central bank will meet senior officials of eight state-owned banks and other officials from the PCBs and FCBs separately to review overall disbursement and recovery performance.
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).
Meanwhile, all the scheduled banks have achieved 34.42 per cent of their FY'25 agricultural loans disbursement target, fixed at Tk 380 billion.
"Higher interest rates have also pushed down the farm credit disbursements," the official said while replying to a query.
Banks are now offering agriculture loans to the farmers at rates ranging between 12 per cent and 15 per cent, according to the central bank's latest monitoring report.
Talking to the FE, a senior BKB official said the disbursements will increase in the coming months to meet the growing demand for the farmers.
He said the ongoing political uncertainty has also affected the disbursements as a section of borrowers now maintain a 'wait-and-see' policy to avert their possible financial risks.
The recovery of farm loans, however, rose to Tk 160.69 billion during the July-November period of FY'25 from Tk 144.18 billion in the same period of FY'24, the BB data showed.
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