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Bangladesh Bank is pushing banks to speed up the disbursement of a Tk10,000 crore agricultural loan programme so that the funds reach genuine farmers quickly, with a target of distributing 25 per cent by September and the full amount by December.
A total of Tk9,190 crore has already been allocated to 42 banks under the programme. The banks will disburse the loans under agreements with Bangladesh Bank, which will release funds against reported disbursements.
The central bank has stressed that faster lending should not come at the expense of proper verification, as hurried disbursement could increase the risks of irregularities and future loan defaults.
Bangladesh Krishi Bank received the largest allocation of Tk2,813 crore, followed by Islami Bank Bangladesh with Tk948 crore and Rajshahi Krishi Unnayan Bank with Tk753 crore. Sonali Bank received Tk684 crore and BRAC Bank Tk433 crore.
The top five recipients include three state-owned banks — Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and Sonali Bank.
Banks proposed their own agricultural lending targets based on their previous-year performance and other factors. Bangladesh Bank does not set branch- or region-specific targets; the banks’ head offices decide where the funds will be distributed based on local demand and agricultural activities.
Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said the priority was to ensure that loans reached genuine and eligible borrowers.
“Speedy disbursement should not mean simply meeting the target. The most important thing is to ensure that the loan reaches the right customer,” he told Sarabangla.
He said there was no written instruction requiring banks to disburse 25 per cent by September and 100 per cent by December, but Governor had stressed speedy lending to eligible borrowers so that the funds could contribute to the economy.
A senior Bangladesh Krishi Bank official, speaking on condition of anonymity, said completing the entire target by December would be difficult.
“We will try to achieve the target within the current financial year. But it is not possible to disburse such a large amount by December in a hurry,” the official said, adding that Bangladesh Krishi Bank had already disbursed Tk8.86 crore.
Agricultural lending through agents is also allowed under the programme. However, stakeholders have raised concerns that inadequate monitoring could create opportunities for intermediaries and lead to loans being diverted away from genuine farmers.
Past agricultural lending has also seen allegations of irregularities, including multiple members of the same family receiving loans. Bank officials fear similar problems could emerge if institutions focus excessively on meeting a tight disbursement deadline.
Bangladesh Bank officials said banks would need to verify borrowers’ farming activities, loan requirements and repayment capacity at the field level. They have also been advised to assess local demand and the types of agricultural activities requiring financing.
The central bank believes that ensuring the quality and recoverability of loans is as important as meeting the disbursement target. A rapid increase in lending without adequate screening could ultimately raise the volume of non-performing agricultural loans and undermine the programme’s objective.
