According to a report by Bangladesh Bank, the share of credit disbursed to the livestock and poultry subsectors of the agriculture industry slipped slightly in the first eight months of the current fiscal year (FY).
The report states that about 24 percent of the total agricultural credit disbursements went to livestock and poultry businesses during the July–February period, down from 25 percent during the same period of FY24.
Meanwhile, the crops subsector continued to dominate, receiving 48 percent of the disbursements in the first eight months of FY25, compared to 45 percent during the same period of FY24.
The fisheries subsector received the smallest share—15 percent in July–February of FY25—compared to 14 percent during the corresponding period of FY24.
The report also noted that scheduled banks disbursed a total of Tk 22,125 crore for agriculture during the July–February period of FY25, reflecting a 6.60 percent year-on-year decrease.
This significant downturn is attributed to reduced disbursements by private commercial banks (down 16.71 percent) and state-owned commercial banks (down 0.64 percent).
Conversely, disbursements by state-owned specialized banks and foreign commercial banks increased by 12.85 percent and 4.93 percent, respectively, compared to the July–February period of FY24.
Mohammad Ali, Managing Director of Pubali Bank, told The Daily Star that entrepreneurs in the poultry and livestock subsectors enjoyed favorable prices for their products during 2022, 2023, and 2024.
He explained that as farmers’ profit margins improved, their reliance on loans decreased, leading to a subsequent decline in overall borrowing.
Ali further added that as inflation fell from double to single digits, the resulting decrease in production costs reduced the demand for agricultural loans.
An official from Bangladesh Krishi Bank said that their credit disbursements to livestock and poultry businesses increased by Tk 102 crore year-on-year during the July–February period. At the same time, overall agricultural credit disbursements by the bank rose by Tk 689 crore.
Challenges Faced by Farmers in Securing Loans
Mohammad Azizul Islam, a farmer from Dinajpur, shared his experience of taking a loan from a private bank last year. He said he took out a loan of Tk 50,000 at a 4 percent interest rate without requiring collateral.
However, although the loan documents specified Tk 50,000, he claimed to have received only Tk 48,000.
Islam alleged that the bank initially promised him Tk 1 lakh but later reduced the amount because he was not involved in Awami League politics.
“The most unfortunate part is that although the bank initially promised a 4 percent interest rate, when it came time to repay, I was charged 11 percent,” he said.
Upon inquiry, the bank informed him that the interest rate had increased due to his failure to meet all loan conditions.
“I couldn’t read all the terms and conditions. If I had known the interest rate would rise to 11 percent, I would never have taken the loan,” the farmer added.
Jahangir Alam Khan, an agricultural economist, said that loan processing and disbursement are typically managed by local branch managers of banks.
However, a major concern is how well they communicate with entrepreneurs in the poultry and livestock subsectors.
He noted that the current situation in these subsectors is challenging. Despite a high demand for loans, banks are not giving them priority.
As a result, overall loan disbursements have declined, he said, adding that banks need to adopt a more proactive approach to support these industries.
.){kind=link}