The central bank has set up a special refinancing scheme worth TK 3,000 crore for farmers to cope with the financial crisis. Farmers will take loans from this fund on easy terms without collateral at only 4 percent interest.
On Tuesday, Bangladesh Bank issued a circular with the relevant policy.
According to the circular, a fund of Tk 3,000 crore has been set up for the agricultural sector under the special incentive refinancing scheme in the second phase. Bangladesh Bank’s fund will run until June 30 next year.
Scheduled Banks willing to avail of loan facility under refinancing scheme will sign a participatory agreement with Bangladesh Bank.
Under this scheme, participating banks will ensure the disbursement of loans at their farmer and customer level. A maximum loan of Rs. 2 lakhs without collateral can be disbursed to small, marginal, and sharecroppers alone.
At the household level, priority should be given to providing loans against personal guarantees in cow rearing and cattle fattening.
Loans in sectors other than grain and crop loans will take minimum collateral and auxiliary collateral based on the banker-customer relationship. The loan under this scheme can in no way be combined with the old loan of the customer. Besides, loan defaulters will not get loans under this scheme.
Under this scheme, banks will be able to make money from Bangladesh Bank at 1 percent interest. At the farmer level, the interest or profit rate will be a maximum of 4 percent.
The participating banks will pay the principal and interest to Bangladesh Bank within 18 months (12 months + grace period six months) from the refinancing date.
The maximum loan term disbursed to the grain and crop sector at the farmer level will be 12 months. In addition, the maximum term for loans disbursed in other sectors will be 18 months with a minimum grace period of 3 months.
Earlier, under the direction of Prime Minister Sheikh Hasina, the central bank had formulated a refinancing scheme worth Tk 5,000 crore for the farmers affected by the first phase of COVID-19 last year. From that fund, commercial banks have so far disbursed 8 percent or Tk 4,300 crore.
