In the fiscal year 2022-23, farmers exhibited a commendable trend, surpassing their loan repayments of 33,010 crore taka against borrowings of 32,829 crore taka, even amidst the challenges posed by the ongoing COVID-19 crisis. This trend persisted over the past years, with farmers consistently outperforming their loan repayments. In stark contrast, the industrial sector grappled with a struggle to repay loans, with banks distributing 72,360 crore taka in immediate industrial loans in 2021-22, yet collecting only 64,862 crore taka, exemplifying a persistent trend of defaults. Furthermore, at the end of June in the current year 2023, outstanding loans distributed by private banks totaled 14,94,254 crore taka, with agricultural loans accounting for a mere 3.52%, while the lion’s share remained entangled in the loans held by defaulters.
Data from Bangladesh Bank reveals that the agriculture sector largely relies on NGOs for loan distribution, where interest rates are markedly higher, reaching 25-30%. Of the distributed agricultural loans, 44% cater to crop production, 22.9% support livestock and poultry, and 12.8% aid fish farming, while private banks dominate the sector with a 57% share. Meanwhile, government banks, Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB), directly assist farmers but suffer default rates of 10% and over 16%, respectively, largely attributed to influential individuals misappropriating loans or alleged unauthorized loan disbursals.
Source for more details:
