Agri loan disbursement up 13% in Jul-Apr of FY23

In the first ten months (July-April) of the fiscal year 2023, disbursement of agricultural loan stood at Tk 26,929.59 crore which was 13.36 per cent higher than that of Tk 23,756.72 crore for the same period of last fiscal year.

However, disbursement of agricultural credit stood at Tk 2,807 crore in April this year which was 8.15 per cent lower than that of Tk 3,056 crore disbursed in the previous month.

But it was 24.62 per cent higher than disbursement of Tk 2,252 crore in the same month of the previous year, according to the data released by Bangladesh Bank in its “Monthly Report on Agriculture and Rural Finance” recently.

According to the report, agricultural credit disbursement target was fixed at Tk 30,911 crore for FY23, up by 8.88 per cent from Tk 28,391 crore in FY22.

The target of disbursing agri loan by state-owned commercial banks and specialised banks was set at Tk 11,758 crore while it Tk 19,153 crore for private commercial banks and foreign commercial banks.

During the July-April period of FY23, the share of crop sub-sector was 47.4 per cent of total agriculture credit disbursement, followed by livestock and poultry 21.4 per cent, fisheries 12.3 per cent, poverty alleviation 6.1 per cent and others 12.8 per cent.

A major advantage of agricultural credit is that recovery of this sector is much better than that of other sectors. Total recovery of agricultural credit was recorded at Tk 26,888 crore during the July-April period of FY23, which was 22.07 per cent higher than that of the same period of the previous FY. The recovery amount was Tk 22,027.5 crore in July-April of FY22.

Overdue of agricultural credit stood at Tk 6,949.30 crore at the end of April 2023, which was 10.75 per cent higher than Tk 6,274.65 crore at the end of April 2022.

Overdue of agricultural credit as percentage of outstanding balance was 13.45 per cent at the end of April 2023 and 12.74 per cent at the end of April 2022.

In April 2023, Grameen Bank and ten large NGOs disbursed Tk 12,608 crore as microcredit and recovered Tk 13,908 crore.

Total outstanding balance of microcredit of these organisations stood at Tk 1,11,060 crore at the end of April 2023. Overdue of microcredit stood at Tk 3,929 crore, around 3.54 per cent of outstanding, at the end of April 2023, according to the report.

The central bank takes some measures to promote agri sector

Bangladesh Bank announced refinance scheme of Tk 500 crore on 3 January 2022 for generating employment and reducing poverty for the people who lost their jobs due to the Covid-19 pandemic and other reasons.

The central bank in May last year announced disbursement of agricultural credit at 4 per cent concessional interest rate for cultivating import substitute crops like pulses, oilseeds, spices and maize.

BB in June 2022 also announced disbursement of minimum 40 per cent unused outstanding amount of Tk 3,000 crore as refinance scheme to flood affected farmers.

In addition, it announced refinance scheme on milk production at 5 per cent concessional rate and a refinance scheme of Tk 1,000 crore for boosting wheat and maize production.

On 18 September 2022, BB declared a scheme for disbursing agriculture credit for salt cultivation at 4 per cent concessional interest rate. It also declared a refinance scheme of Tk 5,000 Crore for the agriculture sector to ensure food security in the country.