Bangladesh

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Tk 5,000 crore special farm loan scheme launched

Interest rate to be 4pc instead of 5pc

Staff Correspondent | Published: 00:43, Apr 14,2020

 
 

The Bangladesh Bank on Monday launched the Tk 5,000-crore special refinance scheme, announced earlier, for the country’s agricultural sector with 4 per cent interest rate for the beneficiary farmers through initially the interest rate was announced to be 5 per cent.

On April 12, prime minister Sheikh Hasina announced this stimulus package for the agriculture sector with a view to boosting agricultural production and mentioned that the interest rate would be 5 per cent.

The scheme, to be funded with the BB’s own money, would be disbursed to banks at 1 per cent interest, said a BB circular issued on the day.

Except the crop and grain sectors, other agricultural sectors, including the seasonal flower and fruit cultivation, fisheries, poultry, dairy and livestock, would get loans under the scheme.

During the current 2019-20 fiscal year, the banks will have to disburse Tk 14,500 crore in loans, out of the Tk 24,124 crore in loans allocated for the agricultural sector, to the farmers of the crop and grain sectors, and the amount would be sufficient for the sub-sectors, the BB said.

The BB has, therefore, kept the two sub-sectors out of the new scheme, it added.

While the two sub-sectors are enjoying the agriculture loan facility, the interest rate for farmers is up to 9 per cent for disbursement through the banking channel and around 20 per cent against a significant portion of the loans for the disbursement through non-government organisations.

The banks will have to disburse the loans to the customers under the scheme within 30 September.

The affected farmers will have to apply for loans under the scheme and the entrepreneurs who buy agricultural products directly from farmers and sell them to the market will also be eligible for loans under the special scheme.

However, the banks have been barred from issuing more than Tk 5 crore to a single individual or entity and the existing farm loans cannot be adjusted with the loans from the scheme.

The repayment period of the loans would be 18 months, including a grace period for six months.

The farmers or farms which have never taken a loan before will also be eligible for this loan.

Scheduled banks would obtain the refinance fund from the central bank after disbursing the money to customers.

The interested banks will have to sign a partnership agreement with the Bangladesh Bank, as per a BB regulation over the scheme.

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