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Farmers best borrowers

Published : 04 Feb 2021 09:35 PM | Updated : 05 Feb 2021 11:27 AM

Farmers are the best borrowers as they did not fail to pay the instalment on the loan although the Bangladesh Bank gave relief for the borrowers to pay amid Coronavirus pandemic.

Farmers did not avail themselves of the relaxation of the rules and they regularly paid the instalments.

Farmers are virtually providing oxygen for the country’s economy, experts opine.

Agriculture is playing a crucial role in getting the country the developed status by providing the main source of food, income and employment for the country’s rural population, they added.

Due to Coronavirus pandemic, the obligation to repay the bank loan instalments was waived by the central bank last year. 

This policy of concession of the central bank has been put to good use by the big industrialists.

Although, a large number of medium and small entrepreneurs have also availed of this opportunity, the farmers did not refrain from paying the instalment. 

Md Serajul Islam, spokesperson and an executive director of the Bangladesh Bank, said banks have been instructed to emphasize the distribution of loans in the agricultural sector.

“Our farmers were at the helm of the economy during the pandemic. Besides, they have paid more to the bank than others. This is a message for the industrialists of the country,” he mentioned.

According to Bangladesh Bank (BB) data, farmers paid the highest proportion during the pandemic. At this time, the banks have realised  more loan repayment money from farmers than ever before .However, the banks lent Tk 12,077 crore to farmers and collected Tk 14,091 crore from farmers in the first six months (July-December) in the current fiscal year 2020-21.

During the time, the banks have collected 22.53 percent more agricultural loans than disbursed.

Bankers said farmers never intentionally default. Due to this, the farmers did not stop paying the loan instalments to the bank even after getting the relaxation, they added. 

On the other hand, the industrialists of the country stopped paying the instalments of bank loans as soon as they got the opportunity, they mentioned. 

Despite their ability, the big industrial groups are not repaying the money to the banks, they added.

Outbreak of coronavirus in the country started in March 2020. Reviewing the data of Bangladesh Bank, it is seen that in the quarter of January-March last year, a large part of the big industrial establishments of the country stopped paying the instalments of bank loans. 

Although there was an increase in the collection of medium, small and agricultural loans in that quarter, the collection of loans for big industries decreased by about 16 percent. 

After that, when the epidemic spread, in the April-June quarter, all the loan instalments collapsed. 

In that quarter, the debt collection of big industries decreased by 59.76 percent. At the same time, the debt collection in the medium industry decreased by 40.92 percent and in the small industry by 44.18 percent.

Farmers repaid more loans than others even when economic activity almost came to a standstill due to the pandemic. 

In the April-June quarter, the collection of loans from farmers decreased by 35.98 percent caused amid flood. 

Farmers also repaid more loans in the July-September quarter than industrialists.

Md Arfan Ali, Managing Director of Bank Asia Limited, said farmers and agriculture are the life-blood of Bangladesh economy. 

Despite the affordability during the pandemic, many solvent customers have not repaid bank loan instalments, he said adding that, “The industrialists have taken advantage of the opportunity. But the farmers did not take that opportunity. Instead, most of the farmers have repaid the bank loan instalments on time.”

The example set by the farmers will play a role in the formulation of credit policies of the banks in the coming days, he mentioned.