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Bangladesh Bank has raised its agricultural loan disbursement target by 53.85 per cent to Tk 60,000 crore for the current fiscal year (FY27), although disbursement fell more than 44 per cent month-on-month in July.
Banks disbursed Tk 2,658.31 crore in agricultural loans in July 2026, down from Tk 4,757.55 crore in June. However, the disbursement was 23.38 per cent higher than the Tk 2,154.03 crore recorded in July last year.
The figures were revealed in the central bank’s monthly report on agricultural and rural finance for July 2026.
The agricultural lending target for FY26 was Tk 39,000 crore, against which scheduled banks disbursed Tk 42,834.16 crore. The new target is also 40.08 per cent higher than the actual disbursement in the previous fiscal year.
Crops accounted for 40.47 per cent of agricultural loans disbursed in July, followed by livestock and poultry at 34.90 per cent, fisheries at 14.46 per cent, poverty alleviation at 4.59 per cent and other sectors at 5.58 per cent.
The crop sector’s share increased by 1.98 percentage points from 38.49 per cent in July 2025. Livestock and poultry gained 0.90 percentage points, while fisheries and poverty alleviation lost 1.41 and 0.38 percentage points, respectively.
The report attributed the larger share of crop loans to the seasonal production cycle, including Aman paddy cultivation and preparations for early winter crops. The increased share of livestock and poultry lending also reflected the expansion of these activities in rural livelihoods.
Agricultural loan recovery rose 19.21 per cent year-on-year to Tk 3,520.96 crore in July, compared with Tk 2,953.62 crore a year earlier. However, recovery fell 41.46 per cent from Tk 6,014.38 crore in June.
The central bank attributed the annual increase in recovery partly to higher collections by private and foreign commercial banks.
Outstanding agricultural loans, including interest, stood at Tk 62,866.97 crore at the end of July, up 5.71 per cent from Tk 59,470.95 crore a year earlier.
In contrast, overdue agricultural loans declined 6.04 per cent year-on-year to Tk 22,367.73 crore from Tk 23,806.61 crore. The report attributed the decrease partly to lower overdue loans at specialised and private commercial banks, while also noting the impact of changes in loan classification.
Of the Tk 60,000 crore agricultural lending target for FY27, private commercial banks have been assigned Tk 36,930 crore, the largest share.
State-owned commercial banks have a target of Tk 6,941 crore, state-owned specialised banks Tk 13,554 crore and foreign commercial banks Tk 2,575 crore.
The Bangladesh Rural Development Board (BRDB) has set a separate lending target of Tk 1,506.65 crore for the fiscal year. It disbursed Tk 115.12 crore in July, up 21.10 per cent from Tk 95.06 crore in the same month last year. Its loan recovery increased 20.67 per cent year-on-year to Tk 125.61 crore.
The Bangladesh Samabaya Bank Limited, despite a Tk 25 crore annual disbursement target, made no new loans in July and recovered only Tk 5 lakh from existing loans. The report said the institution was maintaining a cautious lending policy because of a high level of overdue loans.
Bangladesh Bank continued to support agricultural financing through refinancing facilities. No new funds were approved in July under the government-guaranteed short-term agricultural refinancing facility for Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB).
However, RAKUB had an approved Tk 1,000 crore refinancing facility for one year at a 4 per cent bank rate. It paid Tk 1.72 crore in interest on the facility during July.
Outstanding refinancing-related loans of BKB and RAKUB fell 10.73 per cent year-on-year to Tk 1,790.92 crore at the end of July.
The central bank has also established a Tk 3,000 crore refinancing fund to strengthen agricultural production, storage, marketing, processing and exports, particularly across northern Bangladesh’s agricultural value chain. The fund will remain in operation for three years from the date of notification.
Meanwhile, Grameen Bank and 10 major non-governmental organisations disbursed Tk 18,563.78 crore in microcredit in July, up 11.72 per cent year-on-year. Their collections rose 10.96 per cent to Tk 18,621.95 crore.
Outstanding microcredit from these institutions reached Tk 1,35,615.92 crore at the end of July, with overdue loans totalling Tk 8,496.39 crore, or 6.27 per cent of the outstanding balance.
The institutions served around 38 million members through 14,561 branches. Grameen Bank, BRAC and ASA together accounted for 69.11 per cent of total microcredit disbursement during the month.
BRAC disbursed Tk 6,664.16 crore in microcredit in July, followed by ASA with Tk 3,516.06 crore and Grameen Bank with Tk 2,649.60 crore.
The central bank noted that overdue microcredit indicated repayment pressure on some borrowers, potentially reflecting seasonal fluctuations in rural incomes and rising operating costs. It stressed the need for prudent lending, effective recovery and continued monitoring of credit risks.
Overall, agricultural lending and recovery both increased year-on-year in July, despite declining from June. While outstanding agricultural loans continued to grow, overdue loans declined, leaving banks with the challenge of meeting the higher annual target while ensuring timely financing for farmers and productive use of the funds.