Defaulted loans in agri sector increased by Tk 431 cr in a year

Staff Correspondent
In January this year, the amount of defaulted loans in the agricultural sector stood at Tk 4,336 crores. At this time of the last financial year, the amount of defaulted loans was Tk 3,905 crores. In other words, the defaulted loans in the agricultural sector have increased by Tk 431 crore in a span of one year.
This information has emerged in the latest updated report of Bangladesh Bank.
According to the data, the banks have disbursed 60.44 percent of the target or Tk 21,153 crores of loans in the first 7 months of the current financial year i.e. till January.
According to the data, the total agricultural loan disbursed till January this year is Tk 55,634 crore. Of this, Tk 31,395 crores are outstanding. Overall, the default rate in the agricultural sector is 7.79 percent. In terms of taka, the amount is about Tk 4,336 crores.
Among the defaulted loans in the state-owned banks are about Tk 3,804 crores. As a percentage, which is 10.22 percent. In private sector banks, its amount is Tk 532 crores or 2.89 percent.
Economists say, if the agricultural loan reaches the real farmer, there should not be much default. Some agricultural credit goes directly to farmers, some through NGOs. Not all that goes directly to the farmer. The returns on loans that go directly to the actual farmer are very good. But those that go through other channels are agricultural loans, but actually the farmer does not get it.
Defaults are high in those loans.
Meanwhile, agricultural credit disbursements decreased in January. In January 2024, loans of Tk 2,827 crore have been disbursed to the sector. In the previous month (December) Tk 3,046 crores of loans were disbursed. That is, within one month, the loan disbursement in this sector has decreased by Tk 218 crore. Earlier, Tk 3,319 crore was distributed in the month of November. Accordingly, the loan disbursement in this sector decreased by Tk 273 crore in December.
In the first seven months of the current fiscal year (July-January) Tk 21,153.85 crore of loans have been disbursed in this sector. Tk 18,684 crore was distributed during the same period of the previous year. Compared to the previous financial year, the credit disbursement in the agricultural sector has increased by Tk 2,469 crore or.
According to Bangladesh Bank data, during July-December of the current financial year 2023-24, banks have collected Tk 20,310 crores of agricultural loans. The amount collected during the same period of the previous financial year was Tk 18,446 crores. Debt repayment has increased by Tk 1,864 crore compared to the previous year.
In the current financial year, Bangladesh Bank has fixed the target of Tk 35 thousand crore for the annual agricultural and rural loan disbursement. Which is 13.60 percent more than last financial year. Last fiscal year, the agricultural loan target was Tk 30,811 crore. In the first 7 months of the current financial year, more loans have been disbursed than the target. At this time, 60.44 percent of loans were distributed.
According to the data, in the first 7 months of the current financial year, agricultural loans of Tk 7,551 crore have been disbursed through state-owned banks. The amount of which is 62.77 percent of the target for the entire financial year. On the other hand, Tk 13,602 crore has been distributed through private banks, which is 59.22 percent of their target for the entire financial year.
There is an order to give agricultural loans at the same rate throughout the year based on the crop season. However, some banks are lagging behind in disbursing loans. In the first six months of the current financial year, 11 banks disbursed loans 30 percent below the target.
According to Bangladesh Bank guidelines, banks have to disburse at least 2 percent agricultural loans out of total loans. If a bank fails to meet the target, that bank has to pay a penalty.
On the other hand, the dependence of private banks on Micro Finance Institutions (MFIs) is being further reduced to reach the farmers at low interest rates. And for this, Bangladesh Bank has made it mandatory to disburse at least 50 percent agricultural credit through the bank’s own network, which was 30 percent until now. Apart from this, the share of agricultural loan to be given to which sector has also been determined.
According to the agricultural loan policy for the current financial year, it is a new idea to do various agricultural activities on the roof of the building. Which is currently increasing in urban areas. Basically, the garden which is developed on the roof of the house with flowers, fruits and vegetables in a scientific manner is known as roof garden.