To increase the flow of credit to agriculture and rural areas, Bangladesh Bank has set a target of disbursing Tk 60,000 crore in loans in the 2026-27 fiscal year, up from Tk 39,000 crore last year. The target has risen by Tk 21,000 crore, or 53.8 percent, in a year.

Beyond raising the amount, the central bank has told banks to monitor strictly whether loans reach genuine and marginal farmers on time and whether the money is used for productive work.

The figures were announced on 17 August at Bangladesh Bank's head office at the launch of the agricultural and rural credit policy and programme for 2026-27. Deputy Governor Dr Habibur Rahman outlined the policy.

Of the new target, Tk 20,845 crore has been allotted to state-owned commercial and specialised banks and Tk 39,155 crore to private and foreign commercial banks, which will increase the part played by private and foreign banks in farm lending.

Habibur Rahman said agriculture's share of total lending is still low compared with its contribution to national income. For this reason, the farm-credit share of total loans has been raised from 2.5 percent to 4 percent, and there are plans to raise it further.

He said the main aim of expanding farm credit is to make agriculture self-reliant and strengthen farmers' economic capacity, so that farmers can borrow to raise output, repay on time and later qualify for larger loans.

On complaints about who really benefits from farm loans, the deputy governor said the most important thing is to get money to genuine farmers at the right time. If farm loans go to people who are not real farmers, the money may be diverted to other sectors, and there may even be a risk of money laundering.

He described lending to holders of the Department of Agricultural Extension's farmer card as relatively safe, but said loans can also be given without a card. In that case the bank must verify whether the person is a genuine farmer, and if it lends without verification, the bank will bear the responsibility.

Answering journalists' questions, he acknowledged complaints of irregularities in farm lending, including middlemen. Bangladesh Bank carries out regular surveys and monitoring to check whether loans reach genuine farmers and are used for their intended purpose, and this oversight will be increased.

Asked about Krishi Bank and Rajshahi Krishi Unnayan Bank adjusting old loans and issuing new ones, he said this cannot be treated as an irregularity in every case. If a farmer repays an earlier loan and the loan amount is increased in line with need and capacity, it can be considered an expansion of new lending. But repeatedly renewing the same loan for a long time without checking real need should be curbed, he said.

Habibur Rahman said what matters most is where the money is used after a loan is made. Banks must also monitor whether farmers have become able to repay by putting the money to productive use.

The new policy stresses lending according to the type of farming and production in each region, and banks have been told to follow an "area approach". They can use the government's crop zoning, the "Khamari" app, and data from the Bangladesh Bureau of Statistics, the Department of Agricultural Extension and the Department of Fisheries, as well as crop-zoning data from the Bangladesh Agricultural Research Council.

The deputy governor said that where an area produces more rice, potatoes or fish, the lending target must be set accordingly. Loan limits have been fixed taking into account land area, output, fertiliser and seed, labour and other costs, and they can be adjusted as market prices and production costs change.

To make credit easier for women and marginal farmers, the new policy widens the scope for collateral-free loans and alternative collateral, putting emphasis on personal, social and group guarantees instead of land or other fixed property.

Lending to fisheries and livestock has also been widened. For loan applications of up to Tk 5 lakh, banks have been told not to take any charge documents beyond a set few.

Poultry chick production, hatcheries, fish fry production and other activities have been brought under the credit programme. The policy also gives weight to tackling the effects of climate change, contract farming, growing new crops and post-harvest management of farm produce.

The programme also includes summaries of the policies for a Tk 10,000 crore refinancing scheme and a Tk 3,000 crore refinancing fund, and calls for widening access to credit for small-capital farmers, new entrepreneurs and specific production sectors.

The deputy governor said that along with the higher target there will be strict oversight of implementation, with the central bank's own teams monitoring in the field. Identifying genuine farmers, ensuring proper use of loans and timely disbursement are among the main goals of the new programme, he said.

Source: Jagonews24. First published in Bengali on The Agro News.