Farm loan disbursement by banks was Tk 3,837 crore in the first two months (July-August) in the current financial year 2022-2023, which is 12.41 per cent of the total annual disbursement target.

The disbursement of agricultural credit increased by 43.46 per cent or Tk 1,162.52 crore to Tk 3,837.3 crore in July-August of FY23 from Tk 2,674.78 crore in the same period in the previous financial year, according to the Bangladesh Bank.

The agricultural credit disbursement target has been set at Tk 30,911 crore for FY23, which is 8.88 per cent higher than Tk 28,391 crore targeted in FY22.

The central bank’s pressure on banks to expedite disbursement of loans to the farmers was one of the key reasons for the increase, BB officials said.

The total recovery position of agricultural credit was Tk 4,123.13 crore in July-August of 2022, which is 22.36 per cent higher than Tk 3,369.42 crore recovered in the same period of the preceding year.

The outstanding balance, including interest, of agricultural credit stood at Tk 50,235.4 crore at the end of August, which is 11 per cent higher than Tk 45,260.89 crore at the end of August 2021.

The disbursement target of all state-owned commercial banks and state-owned specialised banks together was set at Tk 11,758 crore and that of private commercial banks and foreign commercial banks together were set at Tk 19,153 crore.

As agriculture plays a vital role in the country’s economy, issuing credit to the farmers has become crucial to keep the agriculture-based rural economy vibrant at a time when the industry and service sectors are struggling due to the ongoing global economic crisis, the officials said.

As much as 40.6 per cent of the country’s workforce is directly employed in the agriculture sector.

As inflation has been rising significantly and import cost swelling in recent months, the government is giving more importance to agricultural production, which is one of the driving forces of Bangladesh’s economy.

On May 22, 2022, the central bank has given an emphasis on disbursement of agricultural credit at 4 per cent concessional interest rate for cultivating import substitute crops (pulses, oilseeds, spices and maize)

In addition, the BB on June 27, 2022 announced disbursement of minimum 40 per cent unused outstanding amount of Tk 3,000 crore as refinance scheme previously issued through a circular September 14, 2021 to the flood-affected farmers.