Bangladesh Bank is likely to extend its sharecroppers credit programme as it has a strong positive impact on the income of marginal farmers and the agricultural output.
‘The sharecroppers refinance programme has been able to provide low cost credit to the sharecroppers with comprehensive outreach throughout the country. BB can continue the programme after 2018,’ a BB senior official told BSS, referring to a study report prepared by the central bank’s research department.
Bangladesh Bank launched the special fund titled ‘Sharecroppers Refinance Scheme’ in 2009, with Tk 500 crore, which was extended to Tk 600 crore till June 2018.
Bangladesh Rural Advancement Committee was nominated for channelling the fund to the sharecroppers through its group based lending framework.
As the demand of the fund among the farmers is very high, the BB official said, the volume of fund is likely to increase from the existing Tk 600 crore.
According to the impact assessment study on the sharecroppers programme in 2015-16 fiscal, the credit programme has enabled the sharecroppers to reduce their heavy reliance on non-institutional credit sources and the general perception of the sharecroppers surveyed in respect of economic uplift is very positive.
‘Almost all the farmers reported that their financial condition has improved due to BRAC’s credit programme. With the sharecroppers credit facilities, they are now relatively more capable of having education for children, improved diet and clothing,’ the official added.
He said the sharecroppers have accumulated new assets like land, house, furniture and electrical goods after making use of the loans for farming.
‘Farmers making use of loans in farming can employ modern crop varieties and agricultural machinery, thereby raise farm’s productivity. New scope for employment for the labour force was created too,’ he added.
Under the programme, the BB official said, women arew playing a new role in the family and farming as majority of the borrowers are women and they can take decisions in relation to choice of crops, technology, food intake and children’s education.
‘Almost all the respondents have access to safe water and sanitary latrines and can avail modern medical services for sickness. This achievement complies with the Sustainable Development Goals,’ he added.
According to the study report, the sharecroppers credit programme was implemented in 213 Upzillas of 46 districts throughout the country till June 2016.The percentage of male and female sharecroppers in total was about 41.39 and 58.61 respectively.
BRAC disbursed an amount of Tk 11 billion among 318,955 sharecroppers in FY16, while it recovered Tk 9.52 billion in the same FY. The range of loans disbursed was Tk 5,000-350,000 with an average loan of Tk 32,000 per sharecropper.
BRAC reported almost 99 per cent recovery rate in its sharecroppers credit programme during FY16.
According to BB, BRAC disbursed around Tk 3,024 crore among about 14 lakh sharecroppers up to June 2017.
BRAC pays five per cent interest to BB. The bank is taking from the borrowers about 10 per cent flat interest but the rate increases up to 19 per cent under the reducing method. The loan is disbursing for one year.