Farm lending rises 17.67pc

Lending to the agriculture sector rose 17.67 percent year-on-year to Tk 6,204.76 crore in the first four months of 2017-18 thanks to banks' keenness to channel more funds to farms, official figures showed.

In July-October, eight state-owned commercial and specialised banks -- Sonali, Janata, Agrani, Rupali, BASIC, BDBL, Bangladesh Krishi, and Rajshahi Krishi Unnayan Bank -- together lent Tk 2,383 crore in agriculture loans.

The amount is 24.85 percent of their combined annual farm loan lending target of Tk 9,590 crore.

Private and foreign banks together provided Tk 3,821 crore in agriculture loans during the period. The sum is more than a third of their total yearly agriculture lending goal.

Bangladesh Bank officials said banks sitting on surplus liquidity have showed increased interest in disbursing agriculture credit amid a sluggish trend in the industrial sector credit growth.

Loans going to industries registered 13.51 percent growth in 2016-17 compared to 20.77 percent in the previous year, according to data from the BB. The tepid growth came despite a sharp decline in interest rates on lending.

In fact, the growth of the industrial loan disbursement fell to a five-year low in the last fiscal year.

The central bank has also beefed up its monitoring of farm loan disbursement with an aim to make financing available for the farmers in the flood-affected areas.

Recently, banks have been asked to give a boost to farm lending in the 17 flood-hit districts.

The BB has asked banks which have presence in the flood-affected areas to reschedule the defaulted farm loans and suspend the loan instalments, scheduled to be paid by farmers.

These gave a fillip to farm loan disbursement in the July-October period.

Banks' opportunity to invest in treasury bills and bonds has also been squeezed as the government is not borrowing much from the banking sector.

Now, they can invest a limited amount of funds in government securities.