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GFMM desk: The interest rate on loans for production of all types of crops including paddy, wheat, potato, maize has been fixed at 4 percent. This concessional interest rate will be applicable on new loans as well as previous loans. Bangladesh Bank issued a notification on Monday (April 28, 2020).
The general interest rate on agricultural loans is 9 percent, of which 5 percent will be subsidized by Bangladesh Bank. As a result, the interest of the farmers will be reduced by 4 percent. Farmers will get this facility till June 2021.
As a result, the interest rate on all types of loans in the agricultural sector has come down to 4 percent. Earlier on April 13, Bangladesh Bank said the interest rate on the Tk. 5,000 crore incentive package for farmers due to coronavirus would be 4 percent. The fund will provide working capital for seasonal flower and fruit farming, fish farming, poultry and dairy and livestock sectors. However, the grain and crop sectors were out of it. Besides, farmers are getting loans at 4 percent interest for the cultivation of imported alternative crops, pulses, oilseeds, spices and maize.
From now on, due to coronavirus, farmers will get loans at 4 percent discounted interest rates for the cultivation of all crops including paddy, wheat, cash crops, vegetables and tuber crops. Now almost all sectors of agriculture are covered by 4 percent loan.
Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), told that interest rates should be brought down to zero percent to give real benefits to farmers. Farmers do not even get the real price. For this, in collaboration with the local administration, it is necessary to take initiative to buy paddy directly from the farmers at a fair price.
The banks have set a target of disbursing Tk. 24,000 crore in the agricultural sector in the current financial year.
According to the central bank's policy, it is essential to provide low-interest agricultural loans to farmers in order to maintain normal food production and food supply in the coming days due to the outbreak of coronavirus. That is why it was instructed to distribute loans at 4 percent interest in the grain and crop sector.
Ali Hossain Pradhania, managing director of Bangladesh Krishi Bank, said a large part of the agricultural loan will go to the grain and crop production sector. This will benefit the farmers.
Source: Online/SZK
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