Although only six days remain of the outgoing fiscal year 2020-21; banks are still far from meeting the disbursement deadline for agro loans under the associated stimulus package of Tk 5,000 crore as almost half of the fund is yet to be given out. A news report published in this daily on Thursday said that the government formed this special fund for the agriculture sector to tackle the financial crisis caused by the Covid-19 situation. When the package was announced in April last year in the form of a refinance scheme, Bangladesh Bank asked all scheduled banks to give out the fund by September 30. But they repeatedly exhibited a poor performance in this regard, forcing the central bank to extend the timeframe in three phases.
According to Bangladesh Bank data, out of 43 contracted banks, 20 banks failed to achieve half of their targets till May 2021. Now only six days are left of the ongoing fiscal year. A BB official, on condition of anonymity, told this daily that the contracted banks were sent letters several times to disburse loans under the incentive package. Even the managing directors of the banks have been issued stern warning letters. But the banks are showing apathy in disbursing loans. However, a bank’s managing director said they do not have enough efficient manpower to give the loan directly to farmers. Most of their bank branches are in the city, he said. However, he said they are interested in disbursing this loan, as small loan borrowers do not default.
In terms of implementation, the private commercial banks and foreign commercial banks are lagging behind the state-owned banks. Among the state-run ones, Bangladeshi Krishi Bank (BKB), one of the top performers, took several initiatives to cater to farmers with the fund. The BKB, which is a specialised lender in the farm sector, has recently applied to the central bank for an additional fund of Tk 200 crore under the package.
As agriculture plays a crucial uninterrupted role in the national economy during the Covid pandemic, disbursement of loans to farmers has become vital to keep the economy vibrant when the industry and the service sectors are struggling to recover from adverse effects.
