After interest rates were liberalized in May 2024, agricultural loan rates surged to 15–18%, up from a previous cap of 8%, resulting in a notable decline in disbursements. In the first eight months of the current fiscal year, banks disbursed Tk 22,126 crore in agricultural loans, which is Tk 1,565 crore or 6.60% less than the same period last year. In contrast, loans in other sectors have slightly increased. Although Bangladesh Bank set an annual agricultural loan target of Tk 38,000 crore for this fiscal year, achieving it now seems uncertain. Last year, Tk 37,154 crore was disbursed against a target of Tk 35,000 crore. A major reason for the decline is that many private and foreign banks lack the network to distribute loans directly, while NGOs are showing reduced interest. Still, loan recovery in the sector rose to Tk 24,424 crore during the same eight-month period, up Tk 1,762 crore or 7.78% from last year. By the end of February, outstanding agricultural loans stood at Tk 57,067 crore.
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