Bangladesh Bank has set up a Tk 10,000 crore refinancing scheme to increase agricultural production, create jobs in the rural economy and ensure food security.

Under the "Refinancing Scheme for the Agriculture and Rural Sector", the fund will finance farm production as well as various income-generating activities in rural areas. The interest rate for borrowers has been set at 8 per cent.

Bangladesh Bank announced this in a notice on Thursday, 20 August.

The central bank said the scheme would play an important role in creating jobs and reducing poverty by financing income-generating activities in rural areas, alongside raising farm output to meet the food needs of a growing population.

The scheme, which started on 8 June this year, will run for three years. Loans can be taken for crop production, farm machinery, livestock and fisheries, as well as various rural income-generating activities. Forty-two banks have already signed agreements with Bangladesh Bank to take part.

According to the notice, a borrower can take up to Tk 30 lakh in loans or investment for crops. The limit for buying farm machinery is Tk 20 lakh, other rural loans including income-generating activities can go up to Tk 15 lakh, and loans of up to Tk 1 crore are available for fisheries and livestock.

Special facilities have also been kept for small, marginal and tenant farmers. For growing crops, such farmers can individually take loans or investment of up to Tk 5 lakh without any collateral; the crop produced will serve as the security.

Bangladesh Bank believes that wider access to finance through the scheme will raise production and increase incomes in rural areas, while creating new jobs. The scheme will also play an important role in ensuring the country's food security, it said.

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