Farm credit target at Tk 262.92b

The central bank on Wednesday set a target of disbursing agriculture credit of Tk 262.92 billion for the banks in the current fiscal year (FY), 2020-21.
The loan amount is 8.99 per cent higher than the target of last FY, according to the agriculture and rural credit policy and programme for FY 2020-21, announced by the Bangladesh Bank (BB) on the day.
Of the total target in FY 21, Tk 31.95 billion will be disbursed by six state-owned commercial banks, while two specialised development banks will provide Tk 78.50 billion to interested farmers.
Besides, 39 private commercial banks, out of 41, will lend Tk 145.46 billion, while nine foreign commercial banks will disburse Tk 7.01 billion.
"We've announced the policy to offset adverse impact of the Covid-19 pandemic on rural economy through boosting agriculture credit disbursement," Ashok Kumar Dey, the BB executive director, told the FE while explaining main objective of the new policy.
He also said the central bank has also provided refinancing facility along with interest subsidy to help the agriculture sector cover up the pandemic losses.
The BB has already announced a stimulus package amounting to Tk 50 billion for small and medium businesses and entrepreneurs in the farm sector.
The affected bank clients can receive an additional 20 per cent of their existing credit ceiling under the scheme.
Under the scheme, the banks are allowed to borrow low-cost fund from the central bank at 1.0 per cent interest and lend at 4.0 per cent.
On April 27, the central bank announced another policy, asking the banks to provide crop loans to farmers at 4.0 per cent interest rate, while the BB will provide the rest 5.0 per cent as interest subsidy.
Meanwhile, the overall disbursement of farm loans by all the scheduled banks stood at Tk 227.49 billion in FY 20, which is 5.70 per cent lower than the target of Tk 241.24 billion, the BB data showed.
The banks failed to achieve their agriculture loan disbursement targets in FY 20 mainly due to slower economic activities amid the coronavirus outbreak, another official said.
At least 20 private commercial banks have failed to achieve their agriculture farm credit disbursement targets in last FY.
"We'll take actions against the banks after examining their statements," the central banker said while replying to a query.
Talking to the FE, Md. Ali Hossain Prodhania, managing director of Bangladesh Krishi Bank (BKB), said the demand for farm loans is now higher because of lower interest rate, as agriculture is a priority sector for the economy.
"We're monitoring the disbursement of farm loans along with implementation of the stimulus packages on daily basis to achieve the goal."
He also said the overall agriculture credit disbursement target can be achieved, if the banks take effective measures from the beginning of this fiscal.

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