Home ›› 23 Nov 2022 ›› Front
The Financial Institutions Division (FID) has approved a proposal to provide a state guarantee against a TK 10,000 crore special scheme of the Bangladesh Krishi Bank (BKB) to finance the SME and agriculture sector.
The FID recently sent a letter, signed by Senior Assistant Secretary Sheikh Siddiqur Rahman, in this regard to the managing director of BKB, according to sources familiar with the matter.
The bank will finance marginal farmers and entrepreneurs in a bid to help the rural economy recover from the losses caused by the Covid-19 pandemic, officials said.
The state-run BKB had taken up the project in 2020 with an aim to finish loan disbursement by 2024 March, a senior official of the bank told The Business Post (TBP).
However, the official added, implementation of the project got delayed due to the lack of a state guarantee. The deadline will be extended now.
Meanwhile, the official continued that apart from the state guarantee, the BKB also plans to collect necessary funds from development partners including the World Bank, International Fund for Agricultural Development, Asian Development Bank, etc.
The financing programme will mainly target small and marginal farmers and small entrepreneurs, officials familiar with the matter said.
They added that eligible beneficiaries will be provided easy loans under the package, which is expected to help them greatly amid the volatile economy.
Officials expect the loan programme will contribute in alleviating poverty and reducing income disparity especially in rural areas. Besides, it will also help making BKB’s balance sheet bigger.
This is not the first time a massive fund has been formed to support the small and medium enterprises (SMEs) and the agro sector.
The Bangladesh Bank in September 2021 rolled out a similar special refinancing scheme of Tk 3000 crore for the agriculture sector, under which commercial banks lent Tk 2,830.61 crore to 1.89 lakh farmers on easy terms.
Under the package, farmers received loans at only 4 per cent interest rate from banks, while the banks got the same amount at 1 per cent interest from the Bangladesh Bank.
The loan has to be repaid within 18 months with a grace period of six months. The fund expired on September 30 this year after a three-month extension.
Meanwhile, the Bangladesh Bank has set a disbursement target of Tk 30,911 crores in agricultural loans for the agricultural banks this fiscal year. In the first July-October quarter, the specialised banks have disbursed 30.63 per cent of the target or a total of Tk 9,469 crore.
