The New Nation - Internet Edition

BSS, Dhaka

The banks and financial institutions have played a significant role in recovering agricultural credit during the fiscal 2006-07 ( FY 07 ) increased by 12.30 percent to Taka 46.76 billion against the recovery made in FY 06.

The significant increase in the agricultural loan recovery was attributed mainly to special drive taken by the Nationalised Commercial Banks (NCBs) and two others specialised banks-Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnyan Bank (RAKUB) and concerned institutions, said the just released Bangladesh Bank annual report for FY 07.

The recovery of outstanding agro credit of banks including Bangladesh Rural Development Board (BRDB), also involved in agricultural lending, improved during FY 07, the Bangladesh Bank report said.

The incentive measures introduced previously for recovery of stuck-up loans also continued in FY07, which included persuasion through various types of fairs, negotiations, demand notice and intensive supervision.

The central bank hoped that banks should strengthen their recovery drive and continue incentive measures so that the recovery of agricultural loan get improved further in the years to come.

The actual disbursement of Taka 52.93 billion during the FY 07 against the disbursement target of Taka 63.51 billion, was 3.69 percent lower, compared the total disbursement of Taka 54.96 billion during FY 06. The target attainment in FY 07 was 83.34 percent as against 93.28 percent in the previous year, the BB report said.

The disbursement of FY 07 fell short the target due mainly to non-achievement of disbursement targets in crops loan, purchase and installation of irrigation equipments, livestock, fisheries and poverty alleviation. On other hand, disbursements have exceeded the targets both in marketing of agricultural goods and other agricultural sectors in FY 07.

Total outstanding loan in the agricultural sector in FY 07 decreased by taka 7.94 billion or 5.16 per cent to Taka 145.82 billion over the previous year's level. The decreased in outstanding balance was due to increase in recovery of the outstanding loan of banks. BKB and RAKUB, four NCBs and Bangladesh Rural Development Board played key roles in disbursement of agricultural and rural finance, which fell short of targets by 12.86 per cent,7.88 percent, 33.46 per cent and 7.36 per cent respectively during FY 07.

The outstanding role also played by Grameen Bank and large NGOs through their micro-credit for revamping the rural economy in the country is widely acclaimed. With efficient disbursement and recovery position, their disbursement during FY 07 amounting Taka 158.4 billion was 199.3 per cent higher than the agricultural loan disbursement of the institutional lenders, the BB report said.