Farmers denied loans as banks cite liquidity crisis

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Golam Mowla
Published : 07:30, Nov 15, 2018 | Updated : 07:30, Nov 15, 2018

In the first quarter of the current fiscal, banks disbursed Tk. 34.93 billion as farming loans, down by Tk. 7.42 billion during the same period last year. FILE PHOTO/Mehedi HasanSince banks are following a policy of caution before elections, distribution of loans in agro sector has fallen. It’s found that several farmers in Khagrachari have been trying to get loans and applied to Agrani Bank without any result.

This scene is seen all over the country since farmers are not getting the required loans and the fall in agro loans is also corroborated by the central bank report.

The central bank report states that due to crisis of funds, loan distribution has fallen by 17.5 percent.

In the July-September period of this year, banks gave Tk. 34.93 billion as loan which is Tk. 7.42 billion less than the same period last year.

Farmer Alo Chakma of Khagrachhari, says: “We have tried to get loans for the last six months but no banks are willing.”

Only a few farmers were given loans of Tk. 20,000 each, he said and added: “if Tk.10,000 is given as bribe to the middleman then Tk. 150000 can be obtained as loan.”

Manager of Agrani Bank’s Khagrachari branch, Ajay Kumar Chowdhury, says: “loan was disbursed to farmers whose applications did not have any faults.”

Meanwhile, according to Bangladesh Bureau of Statistics, BBS, loans were not given to 4.1 million families who applied for agro and rural loans.

Of this, 13 percent families were deprived since they could not provide any lobbying while another 7 percent did not get loans as they could not give any underhand incentive to bank officials.

At government banks, 8 percent loans are given to the agro sector, while in private banks, it’s less than 2 percent.

As per Bangladesh Bank directive, it’s mandatory for all commercial banks to disburse 2.5 percent as loan in the rural areas but in the July-September quarter, eight banks did not distribute any loans.

The banks in question are: Bank Al Falah, Citi Bank NA, Commercial Bank of Ceylon, National Bank of Pakistan, State Bank of India, Modhumoti, Simanta and Woori Bank.

Bangladesh Bank gave top priority to disbursement of agro loans to revive rural economy.

In the meantime, bank owners have sent a letter to Bangladesh Bank and finance ministry, asking for the scrapping of the mandatory loan directive on grounds of liquidity crisis.

/tf/up-hm/
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