Agriculture loan disbursement grew by nearly 32 per cent or Tk 11.30 billion in the first quarter (Q1) of the current fiscal year (FY), 2020-21, following implementing stimulus packages along with providing interest subsidy, officials said.
Disbursement of farm credit rose to Tk 46.84 billion during the July-September period of the FY, from Tk 35.55 billion in the same period of last fiscal, according to the central bank latest statistics.
Of Tk 46.84 billion, eight state-owned banks disbursed Tk 17.83 billion, and the remaining Tk 29.01 billion was disbursed by the private commercial banks (PCBs) and the foreign commercial banks (FCBs).
All scheduled banks have achieved nearly 17.82 per cent of their annual agricultural loan disbursement target, fixed at Tk 262.92 billion for FY 21.
The Bangladesh Bank (BB) is set to review the performance of all the PCBs in agriculture credit disbursement and recovery in a meeting, scheduled to be held in the central bank headquarters in Dhaka on October 29.
"We're working continuously to achieve the agriculture loan disbursement target by the end of this fiscal year," a senior official of the BB told the FE on Thursday.
He also said a six-member monitoring team of the central bank is now overseeing the achievement of farm credit disbursement targets of the banks.
The BB earlier announced a stimulus package of Tk 50 billion for small and medium businesses and entrepreneurs in the farm sector.
Besides, the central bank announced another policy, asking the banks to provide crop loans to farmers at 4.0 per cent interest rate, while the central bank will provide the rest 5.0 per cent as interest subsidy.
Talking to the FE, Md. Ali Hossain Prodhania, managing director of the Bangladesh Krishi Bank (BKB), said the demand for agriculture loans will increase further in the coming months due to the seasonal effect.
"We expect that the agriculture loan disbursement target will be crossed by the end of FY 21, if the banks take effective measures."
He also said the BKB is now monitoring the disbursement of farm loans along with implementation of the stimulus packages on a daily basis to achieve the target before ending the FY.