The Bangladesh Bank issued a guideline on Tk 3,000 crore refinance scheme for the agricultural sector in the second phase on Tuesday, ordering banks to disburse at least 30 per cent of their target in the crops sector.
Before the move, the central bank board decided to form the scheme on August 23 to protect farmers from economic hardship created by the pandemic.
The BB said that at least 30 per cent of the allocated funds would have to be disbursed in the crops sector and banks can spend the rest in other agricultural sub-sectors, such as fruit and flower farming, fish farming, poultry, livestock and irrigation machinery.
According to the BB guideline, farmers can take loans at 4 per cent interest from banks under the refinance scheme while lenders will receive funds at 1 per cent interest from the scheme.
The repayment period for the loans is 18 months, including a grace period of six months.
Individual farmers can take up to Tk 2 lakh loans without any collateral and priority should be given to cattle farming at the household level by providing loans against personal guarantees, the BB guideline said.
Interested banks will have to sign ‘participation agreements’ with BB’s agriculture department to get funds under the refinance scheme for fiscal year 2021-22.
In April last year, BB rolled out a stimulus package amounting to Tk 5,000 crore. About 92 per cent of the fund has been disbursed.
The tenure of the fund expired in June. Against this backdrop, the central bank has decided to introduce the new scheme to help farmers.