Farm loan disbursements grow 26.36% in Q1 FY23

Farm loans disbursement rose 26.36 per cent year-on-year in the first quarter– July to September– of this fiscal year, according to data released by the Bangladesh Bank.

Non-performing loans in the agriculture sector rose by 8 per cent year-on-year to Tk 3955.73 crore during the period, central bank data showed.

Defaulted loans, in the meantime, amounted for 7.93 per cent of the total outstanding loans in the sector.

Banks disbursed a total of Tk 6584.37 crore in farm loans during the July-September period of fiscal year 2022-2023 (FY23), up from Tk 5210.50 crore disbursed in the same period of last year. The total disbursement made so far in the running fiscal year covers 21.30 per cent of the total target for the year. 

The Bangladesh Bank has set a target to disburse Tk30,911 crore in the agricultural sector in FY23, an increase of 8.88 per cent than the previous year’s target.

Central bank data showed that state run banks disbursed a sum of Tk 2355.88 crore in the 1st quarter of FY23, while private commercial banks and foreign commercial banks disbursed Tk 4228.49 crore.

Considering the growing demand after Covid-19 pandemic, the central bank set a target of disbursing Tk11,758 crore as agricultural and rural loans by state-owned commercial and specialised banks, and Tk19,153 crore through private and foreign commercial banks.

The loans were disbursed for farming duck and lobster, cultivating chia seed, sugar beet, Vietnamese hybrid coconut, coffee and sweet corn.

In FY22, the banks disbursed Tk28,834 crore in agricultural and rural loans, which was 1.56% more than the target set for the year.

According to the Bangladesh Bank, 33.4 lakh people received agricultural and rural loans in FY22