Disbursement of agricultural loan falls

Anisul Islam Noor

11th July, 2020 11:36:03 printer

Disbursement of agricultural loan falls

•           Agi loans plunge 60pc in April- May

•           Banks likely to miss loan target for the first time

•           Loan recovery also dips by 11.5pc

Disbursement of agricultural loans has marked a steep fall by around 60 per cent during the April- May period this year amid the coronavirus pandemic, according to Bangladesh Bank (BB) data.

Banks are likely to miss the agricultural loan disbursement target for the first time in FY 20, banking sector insiders said.

In April and May, banks and NGOs distributed loans of around Tk 4.96 billion and Tk11. 32 billion respectively in the agriculture sector, which was Tk 22.61 billion and Tk 18.1 billion in the same period of 2018-19 fiscal.

It means agricultural loan distribution has plunged by 78.04 per cent in April and 37.46 per cent in May this year.

BB set the agriculture loan distribution target at Tk 241.24 billion for 2019-2020 fiscal. The target was 10.66 per cent higher than the target of Tk 218 billion for 2018-2019 fiscal.

Agricultural loan distribution plunged by 8.78 per cent to Tk 185.5 billion during the July-May period of FY 2019-20 from Tk 203.36 billion during the same period in FY 2018-19.

Loan disbursement data of the first 11 months of FY 20 show that around Tk 55.73 billion or 30.04 per cent of the annual target was yet to be disbursed.

Experts have suggested taking up special initiatives in cooperation with local administration and local government bodies to expedite agriculture loan distribution to help manage the impact of coronavirus pandemic in agricultural outputs.

Dr AB Mirza Azizul Islam, a former advisor of the caretaker government, told the Daily Sun that farmers usually take the agricultural loans to purchase fertilizer, seed, and irrigation equipment.

“The fall in agriculture loan distribution will affect crop production as the farmers have to reduce the acreage when they face capital shortfall,” he added.

Former BB governor Dr Salehuddin Ahmed said the banks alone cannot achieve the target without cooperation from level administrations.

Meanwhile, the recovery rate of agricultural loans has also decreased due to the disruption caused by the coronavirus pandemic. Banks could realise only Tk 7.67 billion in April this year, down from Tk 19.16 billion collected during the same period last year. In May, agricultural loan collection fell further to Tk 5.61 billion from Tk 17.24 billion during the same period last year.


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