Farm credit disbursement fell by more than 6.0 per cent in the first eight months of the current fiscal year (FY 2024-25) mainly due to the ongoing political uncertainty, bankers have said.
High interest rates also pushed down the agriculture loans across the country during the July-February period of the FY, they explained.
The disbursements came down to Tk 221.26 billion during the period from Tk 236.91 billion in the same period of the previous FY, according to the Bangladesh Bank’s (BB) latest statistics.
Eight public banks disbursed Tk 92.08 billion during the first eight months of this FY while the remaining Tk 129.18 billion was disbursed by the private and foreign commercial banks.
“Demand for farm credit, particularly by the livestock and poultry farms, decreased due to the ongoing political uncertainty,” a senior official at Bangladesh Krishi Bank (BKB) told The Financial Express (FE) on Thursday.
He said the overall disbursements showed an upward trend over the past couple of months due to seasonal effects.
Farm credit disbursements dropped by over 9.0 per cent to Tk 192.15 billion in the July-January period of this fiscal year from Tk 211.54 billion in the same period of FY ’24, the BB data showed.
Meanwhile, the central bank is set to issue fresh instructions to eight public banks next week to strengthen their disbursement activities across the country, aiming to ensure food security by boosting agricultural production, officials said.
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).
“We’ll issue the instructions at a review meeting with senior officials of the public banks,” a senior official of the central bank told the FE while replying to a query.
He said that the disbursements of agricultural loans have already shown an upward trend, which is expected to continue in the coming months.
“We’re working continuously for achieving the agriculture loan disbursement target by the end of June 2025,” the central banker noted.
All the scheduled banks have already achieved 58.23 per cent of their FY’25 disbursement target, fixed at Tk 380 billion. It was 67.69 per cent in the same period of FY ’24.
The aggregate recovery of farm loans, however, stood at Tk 244.24 billion during the July-February period of FY’25 from Tk 226.62 billion in the same period of the previous year.
siddique.islam@gmail.com