Bangladesh Bank raises agro credit target to Tk 35000 cr in FY23-24

Bangladesh Bank on Sunday announced a new agricultural credit disbursement policy with the target of disbursing Tk 35,000 crore loan to ensure food security in the country.

The central bank’s new target is 13.60 percent higher than that of the fiscal year 2022-23 which was Tk 30,811 crore.

Under the policy, people who have rooftop gardens may apply for farm loans, creating a new scope for urban farming. 

AKM Sajedur Rahman Khan, Deputy Governor of the central bank, announced the agriculture and rural credit policy as the chief guest at the central bank headquarters in Motijheel. Kaniz Fatema, Director of the Agriculture Credit Department (ACD), and other senior officials were present.

Considering the demand for agricultural and rural loans, state-owned commercial and specialized banks were given a target to disburse Tk 12,030 crore, private commercial banks Tk 21,923 crore, and foreign banks’ branches in Bangladesh Tk 1047 crore in agricultural loans.

In FY 2022-23, banks disbursed a total of Tk 32830 crore in agricultural and rural loans, which was 106.55 percent higher than the total target of the financial year.

In the last fiscal year, a total of 36.18 lakh farmers received agricultural and rural loans, of which 18.81 lakh women received loans of about Tk 12,752.46 crore from banks and Micro Financial Institutes (MFIs) or NGOs.

The agriculture credit policy focuses food security in the country in the changing global situation.

Apart from the target of commercial banks, Bangladesh Sambay Bank Limited and Bangladesh Rural Development Board (BRDB) were given a target to disburse Tk 26 crore and Tk 1,423 crore respectively as agricultural and rural credit.

Banks will use their own networks (branches, sub-branches, agent banking, contract farming, syndicated loan disbursements) and bank-MFI linkages to achieve credit disbursement targets.

 In this case, the amount of loans distributed through the banks’ own network should be at least 50 percent of the target. Earlier it was 30 percent.