Business News

Farm loan growth slows to 2.55pc in 9 months

Disbursement of farm loan has increased by only 2.55 per cent during the July-March period of the current 2017-2018 fiscal year. It was 23.39 per cent during the same period of the previous fiscal year, 2016-2017. In March of the current fiscal year, private commercial banks and foreign commercial banks along with state-owned banks had disbursed Tk 1,694 crore in farm loans that took the total loan disbursement in July-March to Tk 16,214 crore, a Bangladesh Bank data released on Wednesday showed.

The farm loan disbursement figure for the nine months of the current fiscal year represents 79.48 per cent of annual target, while the banks had disbursed 90.09 per cent or Tk 15,810 crore of its annual target in July-March of the fiscal year 2016-2017. Total farm loan disbursement was Tk 12,812.43 crore during July-March in the fiscal year 2015-16. The central bank has set a Tk 20,400 crore farm loan disbursement target for the banks for FY18 while the target was Tk 17,550 crore in the previous year.

Eight state-owned banks — Agrani Bank, BASIC Bank, BDBL, Bangladesh Krishi Bank, Janata Bank, Rajshahi Krishi Unnayan Bank, Rupali Bank and Sonali Bank — disbursed Tk 7,034.77 crore in farm loans in the period, which is 5.65 per cent or Tk 421.32 crore lower than Tk 7,456.09 crore disbursed in the first nine months of FY17. Government banks disbursed 73.36 per cent of their annual target of Tk 9,590 crore, while their disbursement in the same period during the previous fiscal year was 80.26 per cent of their annual target of Tk 9,290 crore.
Bangladesh Development Bank Limited’s farm loan distribution rate was the lowest, 13.32 per cent, among the banks, while Sonali Bank was the second lowest as it has disbursed only 41.31 per cent of its annual target.

Defaulted loans and poor rate of loan recovery might be a major reason behind the entity’s slow disbursement of farm loans, they said. The progress in the first nine months of the year suggests that it would be tough for the banks to fulfil the annual target, the officials said. They also said that the slowdown in farm loan disbursement might continue in the coming year depending on the liquidity scenario, they said.

According to central bank rules, banks are supposed to disburse 2.50 per cent of their total loans and advances in a fiscal year in the farm sector. 

Source: http://www.newagebd.net/article/39226/farm-loan-growth-slows-to-255pc-in-9-months



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