Agriculture credit disbursement rises

Agriculture credit disbursements in Bangladesh grew 12.46 percent year-on-year to Tk 23,690 crore in the July-February period of the current fiscal year, central bank data showed.

The government has set the farm loan disbursement target at Tk 355,000 crore for 2023-24, up 13.60 percent from the year prior, as per the central bank's monthly report on agriculture and rural finance.

This year's target is 6.61 percent higher than the actual disbursements made in 2022-23. But with Tk 23,690 crore lent so far, 67.69 percent of the disbursement goal has already been achieved.

According to the agricultural credit programme of the Bangladesh Bank, state-owned commercial banks have been given a target to allocate Tk 3,280 crore in FY24 while state-owned specialised lenders have been asked to lend Tk 8,750 crore.

The allocation target for private commercial banks has been set at Tk 21,923 crore while it is Tk 1,047 crore for foreign commercial banks.

Sector-wise, the crops subsector enjoyed the highest disbursement of 45 percent in the first eight months of the fiscal year. Livestock and poultry received 25 percent of the loans, fisheries 14 percent, and poverty alleviation 6 percent.

A similar trend was witnessed in July-February of FY23, with the crops sub-sector leading with a share of 48 percent. This was followed by livestock and poultry at 21 percent, fisheries at 12 percent, and poverty alleviation at 6 percent.

The total recovery of agricultural credit was recorded at Tk 22,661 crore in July-February of FY24, an increase of 7.99 percent year-on-year.

The outstanding balance (including interest) of agricultural credit stood at Tk 55,860 crore at the end of February, up 9.03 percent from the identical eight-month period of FY23.

The overdue agricultural credit stood at Tk 9,334 crore in February, a 31.10 percent increase from the year prior.

Agricultural credit is the provision of funds for agricultural production from sources outside the sector. It is also known as agricultural finance.

In FY23, some 36.18 lakh farmers received loans under the programme.