Tuesday, 28 September, 2021

BB launches Tk 30bn special farm credit scheme

  • Staff Correspondent
  • 15 September, 2021 12:00 AM
  • Print news

Bangladesh Bank (BB) has launched a refinance scheme of Tk 30 billion for the agriculture sector to help the sector recover from the disruption caused by the Covid-19 pandemic.

The central bank announced the fund on Tuesday. Under the refinance project titled ‘Special refinancing scheme in Agriculture Sector (Phase II) for the fiscal year 2021-22”, BB will supply the fund to banks for disbursement as farm credit by June 30, 2022.

 “To make agricultural activities more dynamic, it is necessary to ensure the flow of low-interest loans in the sector agriculture to help the sector recover from the shock of Covid-19 pandemic,” the central bank’s Agriculture Credit Department said. 

Banks will sign participation agreements with the central bank to get funds from this refinance scheme.

Marginal and landless farmers, vegetable growers, flower growers, oilseed cultivators, maize farmers, spice cultivators and small businesses in the poultry, livestock and fisheries sector will get loans from the refinance scheme at a four per cent interest rate.

The participatory banks will have to disburse 30 per cent of the loans of the refinance scheme to the crops and food grain sector.

The loan disbursement and recovery period would be 12 to 18 months with a grace period of 3 to 6 months.

The banks will have to maintain separate records for agriculture loan disbursement under the refinance scheme and send those to the central bank as per the prescribed format. 

The central bank will provide funds to participatory banks at a one per cent interest rate which is to be returned to BB within 1 to 18 months, the BB said in a circular. BB’s Agricultural and Rural Credit Policy and Program for FY22 targets disbursement of Tk 283.91 billion in low-cost loans in the rural areas to help the agriculture sector and rural economy recover from the impact of the corona pandemic.

The farm credit disbursement target was 7.98 per cent higher than the target of Tk 262.92 billion fixed for FY21.