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BHBFC to launch Tk 2.0b scheme for farmers

Its interest rate to be 8.0pc

September 23, 2018 00:00:00

SM Najmus Sakib

Farmers of the country's rural areas are set to come under house financing network from next month (October) with a reduced interest rate.

Bangladesh House Building Finance Corporation (BHBFC) has already got approval from Ministry of Finance to launch the Tk 2.0-billion house financing scheme to ensure house for farmers.

Initially, some 500 farmers will get the home loan at an interest rate of 8.0 per cent.

"Necessary formalities have already been completed, and we are going to issue a circular to this effect by this month," a top official told the FE.

Farmers, who have farmland or work on others' farmland, will be considered for the loan, according to BHBFC.

BHBFC has already collected a list of 100 farmers from Bangladesh Krishi Bank (BKB), and will gradually increase the number.

The loan scheme will remain open for all farmers in rural areas. But farmers having good track record in repayment of BKB farm credit will get priority in receiving the house building loan.

Besides, BHBFC and BKB will soon ink a Memorandum of Understanding (MoU) for further cooperation regarding the initiative, he added.

Farmers will get loan from BHBFC through selected agents to ease the process, as the state-run entity has limited branches and manpower.

The corporation will allocate money for the scheme from its own budget and from Islamic Development Bank (IDB)-financed 'Rural and Peri-urban Housing Finance Project'. The IDB project emphasises farmers and middle-income people for disbursing home loan.

BHBFC has already inked a Subsidiary Loan Agreement (SLA) with the government to avail fund from the project. A total of 94.75 million euro will be provided under the project in three successive years, according to the agreement.

Another objective of providing loans to the farmers is to save farmland. Agricultural land will be saved once the farmers get loans, according to the BHBFC official.

"We are launching the house loan scheme for farmers, so that they can meet their basic necessity. Besides, the houses will be built in such a manner that these will save and protect farmland," BHBFC Managing Director Debashish Chakrabarty told FE.

The loan scheme proposal is scheduled to be passed in BHBFC board meeting on September 24 to complete further formalities, he mentioned.

"Besides, we are considering building houses for marginal farmers in consultation with House Building Research Institute," he added.

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