Bangladesh Bank has sharply raised its target for lending to agriculture, setting a goal of Tk 60,000 crore for the 2026-27 fiscal year. At the same time, banks will be required to lend at least 4 percent of their total loans to agriculture, up from 2.5 percent.

Deputy Governor Dr Md Habibur Rahman announced the new agricultural and rural credit policy at a press conference at Bangladesh Bank on 17 August.

Under the new target, state-owned commercial and specialised banks have been set a goal of Tk 20,495 crore and private and foreign banks Tk 39,505 crore. Last fiscal year's farm credit target was Tk 39,000 crore.

Bangladesh Bank says one of the main aims of the new policy is to raise production and control inflation by increasing the flow of credit to agriculture. A "web-based Agri-Credit MIS software" has been launched to strengthen monitoring of lending.

Under the new policy, for loans of up to Tk 5 lakh in fisheries and livestock, borrowers can offer personal, social or group guarantees instead of the usual fixed property. The central bank believes this will make it easier for women and marginal farmers to get loans.

The scope for group loans for income-generating activities in rural areas has also been widened, and the limit on the number of members in such groups has been relaxed.

Fish and poultry hatcheries, camel rearing and several other activities have newly been brought under the credit programme. Farm loans can also be given for ventures such as blueberries, shimul root, ashwagandha and producing organic fertiliser from eggshells.

To verify farmers, a certificate from the local agriculture, fisheries or livestock officer or the government's "farmer card" will be accepted. The requirement to hold a passbook to get a loan has been dropped.

To deal with the risks of climate change, farmers can also be brought under insurance by mutual agreement between the bank and the customer.

Bangladesh Bank expects the new policy to increase financing for agriculture, and says farm credit will play a positive role in raising production, creating jobs, reducing poverty and maintaining economic stability.

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