Agricultural credit disbursement in Bangladesh recorded significant growth in the first half (July–December) of the current 2025–26 fiscal year, offering an encouraging signal for the country’s rural economy.
According to the latest data from Bangladesh Bank, agricultural lending rose by nearly 30 per cent during the six-month period to Tk21,008 crore, marking a substantial increase compared with the same period of the previous fiscal year. At the same time, loan recovery also showed a positive trend, indicating more sustainable management of agricultural credit within the banking sector.
Data show that agricultural loan recovery totalled Tk21,774 crore in the first six months of the current fiscal year, about 14 per cent higher than in the corresponding period a year earlier. As a result, outstanding agricultural loans stood at Tk62,723 crore, reflecting a 12 per cent year-on-year increase. Observers say the simultaneous growth in both disbursement and recovery points to greater stability in agricultural financing.
Experts attribute the rise in agricultural lending mainly to higher input costs, the expansion of cultivated land, and increased investment by farmers to address climate-related risks. In addition, renewed emphasis by the central bank on agricultural and rural credit has prompted banks to play a more active role in lending at the grassroots level. For the 2025–26 fiscal year, Bangladesh Bank has set a target of Tk39,000 crore for agricultural and rural credit disbursement, up 2.63 per cent from the previous year. Achieving this target will require both state-owned and private banks to engage more closely with the rural economy.
However, alongside the increase in agricultural credit flows, several challenges remain. Stakeholders caution that expanding disbursement alone is not sufficient; stronger monitoring, technical support and field-level supervision are essential to ensure the productive use of funds. Without such measures, the risk of misuse of loans and a future rise in non-performing loans will persist.
Dr M Masrur Riaz, Chairman of Policy Exchange Bangladesh, said that growth in both agricultural loan disbursement and recovery is a positive sign for the country’s rural economy. Timely and effective credit flows, he noted, help boost farmers’ productivity and play a vital role in improving livelihoods.
He added that access to loans on easier terms enables farmers to invest in improved seeds, irrigation systems and modern agricultural machinery, increasing crop output and strengthening national food security. The higher recovery rate also demonstrates responsible loan management by farmers, helping to create a sustainable credit cycle for both banks and borrowers. However, he and other experts pointed out that the biggest remaining gap in agricultural finance is the inclusion of small and marginal farmers, who still rely heavily on informal lenders with higher interest rates and greater risks.
Therefore, to turn the current positive momentum in agricultural credit into long-term and inclusive development, policymakers and banks must ensure easier access to loans for small and marginal farmers, while strengthening institutional oversight and technical assistance to guarantee proper use of funds. Only then can agricultural credit truly serve as a driving force for the rural economy.
Bd-pratidin English/ ANI
