Farmers in the country will get adequate agriculture loans from the state-owned and specialised banks to cultivate their land smoothly, sources in the Bangladesh Bank said.
In this regard, Bangladesh Bank has already directed the concerned banks to increase the amount of loans in the agricultural sector by around 50 percent within the next 2 years, they said.
The central bank in its directives also asked the state-owned and specialised banks to make phone calls to the farmers on whether they (farmers) need loans to grow crops, they mentioned.
These instructions were given in the recently held monthly meeting regarding disbursement and collection of agricultural loans.
Basically, this initiative is being taken to control inflation by building food security in the future.
This instruction letter has been sent to the managing directors of state-owned Sonali, Janata, Agrani, Rupali, and Basic Bank.
Besides, the letter has been sent to state-owned specialized banks.
Economists said that institutional agricultural credit still does not reach the marginal and small farmers.
However, most of the 80 percent of the total farmers are taking loans from NGOs and moneylenders at high interest rates.
“The decision to increase the loan amount by 50 percent is good. It will increase food production and supply. However, one thing should be taken care of so that the loans distributed through banks reach the small and marginal farmers at the right time, because they are more in number. They are playing an important role in production, but are deprived of access to credit, said Dr MK Mujeri, former director general of Bangladesh Institute of Development Studies (BIDS).
Md Abul Kalam Azad, director of agricultural credit department (ACD) of Bangladesh Bank, said in the recently held monthly meeting of the Central Bank, the action plan should be adopted to achieve the proportional target of loan distribution according to the districts’ allocation.
He directed the formulation of the plan and its implementation.
Several important decisions were taken in the meeting. One of these is to ensure transparency and hassle-free access to loans.
Banks should adopt monthly action plans with their own strategies for disbursement of loans.
Steps should be taken to monitor the progress of district wise loan disbursement.
Apart from this, new farmers should be brought under the credit program on a priority basis after checking and not limiting to the same farmer.
In consideration of rationality, loans should be given to more than one farmer of the same family.
Banks should send loan disbursement information avoiding double reporting.
In order to avoid defaults, the loan disbursement and collection activities should be strengthened by verifying the capacity and actual condition of the customer.
Besides, it was decided to provide loans at 4 percent rate for production of import substitute products and 4 percent concessional rate loans to small ethnic groups of Tangail district and through own branches and sub-branches along with agent banking in enclaves.
A senior official of the central bank involved in this process said that more importance is being given to agricultural loans to control inflation.
Especially after the Russia-Ukraine war, the price of daily necessities in the world market has skyrocketed. This results in global inflation.
With this, the rate of inflation in Bangladesh increased abnormally. According to Bangladesh Bureau of Statistics (BBS), inflation in April stood at 9.24 percent and food inflation at 8.84 percent. The central bank forecasts that inflation will continue in the current fiscal year.
In such a situation food production is given the greatest emphasis. Besides, the Prime Minister has ordered the authorities concerned to increase food production. Considering the overall situation, initiatives have been taken to bring changes in agricultural loans.
According to sources, in the meeting, banks were asked to give more importance to the 'open agricultural loan disbursement program' among the farmers.
Till February of the current financial year, loans of Tk 557 crore have been given to 70.54 lakh farmers under this programme.
In the current financial year, Tk 9,887 crore has been disbursed till March.
Currently, about Tk 11,750 crore has been distributed in a year. According to the central bank, it should be increased to around Tk 17,500.
