Debit cards for farmers

A-CARDS", as they are being called is a project financed by the USAID Agriculture Extension Support Activity and facilitated by non-government organisations Dhaka Ahsania Mission (DAM) and CARE Bangladesh, and Bank Asia, a leading commercial bank. The cards are going to be introduced to 110,000 farmers initially in 12 south central and southern districts. Every farmer can recharge these cards up to Tk. 20,000 and purchase required agro-inputs like fertiliser, pesticides, fuel, etc. from designated sellers. The good news is that the interest will be a nominal 10 percent on the amount they spend, which is much lower than traditional microfinance institutions who charge cumulative interest of up to 31 percent. The programme is an initiative that will help farmers' access microfinance through banking institutions.

While the cost of taking loans just became much cheaper, the other major advantage of using the system from the farmers' perspective is that repayment of debt on the cards starts only after 6 months. This means farmers who now are forced to sell their produce like rice, wheat, jute, etc. at throwaway prices at the beginning of harvest season to repay traditional moneylenders, can afford to wait it out for prices to rebound at a later stage.

We believe that the digitisation of procurement and finance for farmers is a very important development. It is good to see non-state actors collaborating with mainstream financial institutions working with the government to bring the benefits of technology to those who need it the most. We would like to congratulate this multi-actor initiative and hope for its successful implementation so that the project can be expanded nationwide.