Bangladesh Bank has raised its target for agricultural and rural lending by about 54 percent, but disbursement has not kept pace, Ajker Patrika reported, citing the central bank's latest data. The target for the 2026-27 financial year is Tk 60,000 crore, against Tk 39,000 crore last year. In the first two months, July and August, banks lent Tk 6,858 crore, 11.43 percent of the target, compared with 12.37 percent in the same period last year.
In taka terms lending has grown, by Tk 2,032 crore or 42.11 percent from Tk 4,826 crore a year earlier, but the bigger target has pushed the rate down. At the end of 2025-26, disbursement reached Tk 42,834 crore, 9.83 percent above that year's target.
State-owned commercial and specialised banks lent Tk 2,375 crore against a target of Tk 20,495 crore (11.59 percent); private and foreign banks lent Tk 4,483 crore against Tk 39,505 crore (11.35 percent). People involved say banks are less keen on farm lending because other sectors, industry included, offer higher profits at lower operating cost.
Agriculture accounts for only 2.95 percent of banks' total outstanding loans. From this year banks must lend at least 4 percent of their total loans to agriculture, up from 2.5 percent, and the government and Bangladesh Bank plan to raise this in stages to more than 10 percent, matching farming's share of GDP. To monitor how the money is used, the central bank has launched web-based 'Agri-Credit MIS' software, collecting data from banks' head offices first and later from district level.
Defaults have risen too. At the end of August, outstanding farm loans stood at Tk 70,432 crore, of which Tk 29,849 crore, or 42.38 percent, was in default, up from Tk 18,578 crore or 29.22 percent at the end of June, an increase of Tk 11,271 crore in two months. The central bank attributes this mainly to new loan classification and provisioning rules issued in November 2024.
Recovery improved: banks collected Tk 7,419 crore in agricultural and rural loans in the first two months, Tk 1,346 crore or 22.21 percent more than the Tk 6,073 crore collected a year earlier.
Photo: Shameem Reza / Wikimedia Commons (CC BY-SA 4.0)
Source: Ajker Patrika
Comments
(0)