Incentive disbursement in Agri-sector still in darkness

Less interest of private commercial banks blamed

Golam Mostafa Jibon: Though, the government announced incentive amount of Tk 5,000 crore for agriculture sector, most of the private commercial banks are not showing interest to disburse the money to the relevant farmers causing uncertainty over food security in future.
Farmers are apprehending that, production of food-grains may be hampered seriously in the current season for want of necessary funds, if the incentive money is not disbursed among the farmers as per directives of the government.
According to the sources, the government instructed not to leave any cultivable land and announced an incentive of Tk 5000 crore for the farmers so that food production is not hampered due to lack of money. Most of the private commercial banks are not following the government’s directive to create food security. They are not showing interest in distributing incentives given by the Prime Minister Sheikh Hasina. Such a feature was found in the data of loan disbursement by the private commercial banks.
As per the announcement of the government, the interest rate of this loan has been fixed at 4 percent at the farmer level for distribution through commercial banks. If someone claims the loan, Bangladesh Bank will pay the money. In the 14 months from May 2020 to June 30 in 2021, some 20 private commercial banks did not disburse half of the sanctioned loans. Of them, the distribution rate of four banks was even worse. The distribution rate of these banks is below 30 percent of the allocation. IFIC Bank was a poor state in disbursing agricultural credit. The rate of loan disbursed by the bank was only 13.52 percent. The bank distributed only (See Page-2)
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Tk 8.52 crore to 375 farmers against an allocation of Tk 63 crore. Then there is position of First Security Islami Bank. The bank has distributed only Tk 16.69 crore to 264 farmers against the allocation of Tk 113 crore, which is 14.77 percent of the total allocation. South East Bank has given only Tk 9.9 crore to 141 farmers against Tk 58 crore, which is 15.68 percent of the allocation.
Standard Bank has distributed Tk 16.63 crore to 303 farmers against the allocation of Tk 61 crore, which is 27.27 percent of the allocation. Dhaka Bank has distributed Tk 15.75 crore to 60 farmers against the sanction at Tk 46 crore.
Bangladesh Commerce Bank has distributed 35.50 percent, Jamuna Bank 38 percent, South Bengal Agriculture Bank 38.50 percent, National Bank 40 percent, Social Islami Bank 40 percent, Union Bank 42.62 percent, Dutch-Bangla Bank 43 percent, Trust Bank 44.57 percent, Pubali Bank 46 percent, Citibank 46 percent, The City Bank 46.60 percent, Simanta Bank 47.30 percent and Basic Bank 50 percent.
The Basic Bank was lowest distribution scale among state-owned banks. Mutual Trust Bank has distributed 51.53 percent.
As a single bank, the state-owned Bangladesh Krishi Bank has distributed the highest incentives in agriculture. The bank has disbursed Tk 1,698.44 crore to 85778 people against the allocation of Tk 1,699 crore, which is 99.97 percent of the allocation.
Southeast Bank is one of the most prestigious private commercial banks. The bank lags behind in distributing incentives in agriculture.
M Kamal Hossain, Managing Director of Southeast Bank said that, around 80 percent of the allocation would be distributed by August 30. I hope to be able to distribute the rest of the money soon.
As a reason for lagging behind, he said, there is an obligation to distribute incentives in agriculture through the bank’s own branches. We have less branches in rural areas. That is why, we are lagging behind.