Farmers go to loan sharks while funds idle with banks

Funds for agriculture loan are lying idle with commercial banks in four northern districts but flood affected farmers show little interest for loans in the current Rabi season.
The lengthy and cumbersome loan disbursement process and alleged harassment for repayment of earlier loans has created a negative impact on farmers as regards agriculture loan, sources said.
Cashing in on the situation, loan sharks in the four districtsRangpur, Nilphamari, Kurigram and Gaibandha--are reaching loans to farmers at their doorsteps without any formality, but at high interest rates.
Commercial banks give loans at 8 per cent interest. To get loan, farmers have to deposit up to date land documents for which they have to face hassle at union land revenue office and district land records office.
Besides, a section of corrupt bank employees demand 'commission', the sources alleged.
Recently, many farmers were arrested or harassed for defaulting on loan repayment and many others are on the run as banks have lodged cases against defaulters.
Sources in Rajshahi Krishi Unnayan Bank (Rakub), said Tk 75.90 crore was allocated for agriculture loan in current FY 2007-2008 for Rangpur district but the disbursement was Tk 27.28 crore till December 31.
In Gaibandha, the disbursement was only 11.59 crore against an allocation of Tk 46.70 crore.
In Kurigram and Nilphamari, disbursement was Tk 12.89 crore and Tk 10.73 crore against Tk 42.70 crore and Tk 44.15 crore respectively, the sources said.
Only 28 per cent of the target could be achieved in six months, they said.
Sonali Bank allocated Tk 5.25 crore, Tk 7.39 crore, Tk 6.14 crore and 5.91 crore for Rangpur, Gaibandha, Kurigram and Nilphamari districts but disbursement in six months was Tk 1.93 crore, Tk 4.86 crore, Tk 2.33 crore and Tk 1.14 crore respectively.
The bank attained only 23 percent of the target except in Gaibandha where it was slightly higher, the sources said.
The government earlier directed banks to attain 60 per cent loan disbursement target by December 31, bank sources said.
Same is the situation with Janata Bank Agrani Bank. Allotment for Janata Bank and Agrani Bank in Nilphamari was Tk 5.93 crores and Tk 54 lakh respectively but disbursement was only Tk 1.29 crore and Tk 18 lakh.
Many bank branches even made public announcements through loud speakers, urging farmers to take loan but it could not bring any result, the bank sources said.
Loan sharks give loans only after taking signature or thumb impression on white paper or non-judicial stamps without mortgage of property
Farmer Tayeb Ali of Putimari village in Kishoreganj upazila in Nilphamari said, “I borrowed Tk 3,000 from a money lender on condition to give him nine mound of paddy after harvest”. This will be about three maunds of paddy for Tk 1000.
Moksudar Rahman of Taraganj upazila in Rangpur said he borrowed Tk 1000 from a moneylender in mid-Poush (last week of December) to repay Tk 1800 in Baishakh (mid- April).
The interest charged by loan sharks is between 180 and 240 per cent, sources said.
Investigation by this correspondent revealed that share croppers constitute the lion portion of clients of money lenders as they have no land to show to banks. About 50 per cent of farmers in northern districts are share-croppers, agriculture officials said.
“The money lender just visited my crop field, made an estimate of my probable share and gave me Tk 2000 loan, which I will repay after harvest”, said share-cropper Khirod Barman of Itakhola village in Nilphamari Sadar upazila.
Different NGOs also provide loan to farmers and share croppers but flood-hit farmers do not like to approach them as they realise weekly installments which is not possible before harvest, many farmers said.
When asked, deputy general manager MU Anwar at Rangpur divisional Rakub office admitted low disbursement of agriculture loan by the bank. “Many applicants are not eligible for fresh loan as they are yet to repay earlier loans”, he said.
“We must ensure bank interest also”, he added.
Sonali Bank AGM in Nilphamari Shahidul Islam however said loan disbursement will be higher now as half of the financial year is already gone.