Monirul Alam :
Disbursement of agricultural and non-farm rural credit declined in the months of July and August this year, while started to pace up again in September and October, which ultimately may fulfill the first quarter’s target, banking sources said yesterday.
Agricultural credit includes banks’ lending to crops, irrigation equipment, agriculture equipment, livestock and poultry farm, fisheries, grain storage and marketing. Non-farm rural credit includes banks’ investment in poverty alleviation schemes involving rural people (income generating, self employment and others).
In July and August, agriculture credit decreased by 26.56 percent compared with corresponding months of the previous year. During the same period, non-farm rural credit disbursement declined by 19.70 percent in comparison with last year, according to Bangladesh Bank (BB) statistics accumulated from banks.
Commenting on this, Managing Director of Bangladesh Krishi Bank (BKB) Md. Ali Hossain Prodhania said, the seasonal variability contributed to the less disbursement. “Seasonal variable is the main reason of the declining trend of credit disbursement and it had been covered by banks in September and October months. We hope that our annual and quarterly target of disbursement of agricultural and non-farm rural credit will be achieved fully,” he said.
He said the pace of disbursement has been raised by BKB, Rajshahi Krishi Unnayan Bank and other banks as the demand for loans from clients-end is grown.
“Our people (Bankers) are busy with farmers due to arrival of the fresh season since September,” he said.
BKB has the highest exposure in agricultural and non-farm rural credit with 85 percent of stake in total lending by banks.
Rajshahi Krishi Unnayan Bank is also a dedicated bank is for the agriculture sector in northern region.
Meanwhile, all the banks (state-owned, local and foreign banks) were asked by the central bank to disburse at least 2.0-2.50 percent of its total investment exposure to agriculture and non-farm rural sectors.
Sources in banks said that majority of the state-owned and private banking companies didn’t comply with the central bank order that resulted to decline of agricultural and non-farm rural credit in august and September months.
This year, from July 2018 to June 2019, the central bank has set the target of disbursing agricultural and non-farm rural credit to Tk. 21,800 crore.
During the July-August periods, the actual disbursement by all the banks stood Tk. 2090 crore. In the corresponding months of previous year, total disbursement by all the banks was Tk. 2763 crore, the BB data shows.
