Anisur Rahman Khan :
The government will sanction new loans to 1.36 lakh marginal farmers to increase their financial capacity in production and income generating activities across the country. The interest rate of this loan will be 11 percent.
However, one percent will be added to the fund of the beneficiaries and some large loans will also be given under the project.
As a result, after the approval of the project, a total of 1.36 lakh farmers will come under the loan project.
This micro loan will be given considering any person as a small farmer if he has 2.5 to 5 decimal of land and interest will be charged from two months after the loan is given.
In the first stage, the volume of micro loan will be Tk 30,000 to Tk 70,000.
Besides, large loans will be given to some farmers or sharecroppers and its volume will be from 1.5 lakh to Tk four lakh under the projects.
However, some economists have appreciated the government’s initiative, but criticized about the interest rate of 11 per cent.
Referring Bangladesh Bank’s policy regarding interest rate that all kinds of loan interest will be nine percent then why 11 per cent interest will be charged for marginal farmers?
“The BB has a policy to disburse loan at seven percent in agricultural based business. We don’t understand why 11 percent interest will be charged on the marginal farmers where corporate holders enjoying nine percent interest rate against bank loans,” Zahid Hossain, former lead economist of World Bank Dhaka office told The New Nation on Tuesday.
A big corporate loan holder knows how to manage risk, but a small farmer has no experience risk management, he added.
He, however, said that farmers should get loan less interest as per policy of the government.
The Small Farmers Development Foundation (SFDF) has taken the initiative under the project ‘Vision 2041: Small Savings Scheme for Poverty Alleviation’.
The total estimated cost of the project proposed Tk 149 crore, which will be tabled at the ECNEC meeting of the Planning Commission today (Wednesday).
The marginal farmers will get loans at 11 percent interest under the poverty alleviation scheme and the loan will be disbursed after visiting every door of the farmer. However, the SFDF said that the 11 percent interest rate of this loan is not interest rather it is ‘service charge’.
This loan will be without collateral and 1 percent will be returned to the farmer, sources said.
Besides, one percent will go to the fund and the loan will be distributed among the farmers in 200 upazilas across the country.
“The project will be placed in the ECNEC meeting on Wednesday (June 1) for approval. A total of 1.36 lakh farmers will come under the project. The SFDF is a non-profitable organization and we are charging 11 percent interest as service charge. It won’t be compare on it with a bank loan,” Md Abul Kalam Azad, Deputy General Manager of SFDF told this correspondent.
He, however, said that NGOs are charging 28 to 30 percent interest for this work, while SFDF charging 11 percent as service charge not interest.
The SFDF is now implementing the project in 173 upazilas of 36 districts of the country. The proposed project has been extended to 27 new upazilas and the project area will be in 200 upazilas after inclusion the new upazilas.
The main objective of the project is to develop the small and marginal farmer’s socio-economic status and poverty alleviation in 200 poverty stricken upazilas in the country.
The project’s view is to increase the per capita income of the beneficiary of small and marginal farming families by Tk 4,000 by 2024.
