The scheduled banks have disbursed Tk 7905 crore as agriculture and rural credit in Bangladesh in July-October period of the current fiscal (2021-22), almost 28 percent of the target for the 12 months. It shows that agriculture and rural credit disbursement got pace after Bangladesh Bank (BB) simplifying the credit disbursement policy, said Md Serajul Islam, spokesperson and executive director of BB. The central bank’s enhanced supervision in field level after falling Covid-19 infection rate in the country also helped to bring about the positive result, he said. Read Bangladesh, Tanzania keen to work on blue economy, agriculture Compared to the same period of the previous financial year, the loan disbursement has increased by 19.23 percent or Tk. 1,275 crore. Banks disbursed Tk 6629 crore in the FY 2020-21's corresponding period, that was 25.22 percent of the fiscal agriculture and rural credit disbursement target. The central bank set the target of Tk 26292 crore disbursement in the agriculture sector. Bangladesh Bank (BB) set a target for banks of Tk 28391 crore agriculture and rural credit disbursement target for the fiscal year 2021-22.  Read Hasan Mahmud calls for foreign funding to boost use of solar energy in agriculture The agriculture and rural credit disbursement increased in October. Banks disbursed Tk 2695 crore in this month which is the highest ever in a single month. In the previous month in September Tk 2536 crore was disbursed in this sector. This led to a positive change in the disbursement figure of credit to the agricultural sector as a whole, following simplification of the credit policy in August this year, economists said.  In August, banks disbursed Tk1,732 crore as agriculture loan, and Tk 942 crore in the previous month in July, the first month of the fiscal. Read Agro-Tech Startups in Bangladesh: Tech revolution in Agriculture Sector Meanwhile, despite the increase of loan disbursement, the recovery of agricultural and rural credit has decreased in four months. During this period, Tk 7, 597 crore has been collected. In July-October of the last financial year, the agricultural loan recovery was Tk 8,457 crore. The loan recovery decreased due to the adverse impact of Covid-19 pandemic on the economy, the sector's insiders said. In August the BB issued a circular focusing disbursing of farm loan through Tk10 farmer account within 10 working days after the loan application of a farmer was filed at the respective bank. Read Monga will never return: Agriculture Minister Besides, the bank has to send an acknowledgement letter for each loan applicant. If the loan application would not be considered or delayed, the valid reasons have to be described in the file note and all these documents have to be preserved for inspection of Bangladesh Bank officials. Banks can provide farm loans up to Tk2.5 lakh without CIB (Credit Information Bureau) report, that is required for other loan disbursement. The BB increased supervision and monitoring of contract farming so that the farmers get fair price of crops. READ: Khagrachari: UCB gives Tk2.1 crore agricultural loan to 71 farmers Besides, special attention has been given to promoting agro-based entrepreneurship, along with enforced loan disbursement for purchase of modern agriculture machinery.

Bangladesh Bank has reduced the interest rates on both agriculture and rural credits and export-oriented pre-shipment support loans. As per the new decision, the borrowers of the agriculture and rural credits will pay highest 8 percent interest instead of the existing 9 percent on their loans. Besides, the borrowers of export-oriented pre-shipment credit will pay highest 5 percent interest instead of the existing 6 percent, said two separate circulars of the central bank. Also read: Extended lockdown: Banks’ limited operation to continue until April 28 The circular, issued by the Banking Regulations and Policy Department, said the initiative for the agriculture and rural sector was taken as part of the support to bring back the productivity in the sector that was affected by the Covid-19 in 2020 like other sectors of the economy. Mentioning the agriculture and rural sector as an important one for ensuring food security of the country, the circular said the new interest rate will be effective from April 1 this year. It added that the highest interest rate for the sector was capped at 10 percent considering it a priority sector and then it was brought down to 9 along with all other interest rates except for credit cards from April 1 in 2020. Read Interest rates of savings certificates not lowered: Govt The other circular, issued by the same department, said the interest on credit for the pre-shipment facilities was re-fixed at 5 percent instead of existing 6 percent to ensure soft loan for the sector to attain further growth in export business. It mentioned that a Tk 5,000 crore re-financing scheme was launched in 2020 to support the export-oriented industries against the effect of the Covid-19 to continue earning of foreign currency and bringing pace in the economy.  The circular said the banks will receive the loan from the central bank at a rate of 2 percent interest while they will disburse it at highest 5 percent interest with effect from April 1. Also read: Inter-bank cheque settlement, e-fund transfer system resumed at BB