Bangladesh Bank has launched a Tk 10,000 crore refinance scheme to support food security, rural employment, and agricultural production, giving farmers and rural entrepreneurs a wider chance to access affordable credit. The scheme is built as a revolving fund, which means repaid loans can be used again to support more borrowers during its five-year period. This structure can help the fund reach more people instead of serving only one round of borrowers. The main focus is on small, marginal, and sharecropper farmers, who often face difficulty getting loans because they may not have enough land documents or traditional collateral. Under the scheme, individual farmers can receive loans of up to Tk 5 lakh for crop cultivation against crop hypothecation without needing land as collateral. This is a meaningful step for farmers who can produce food but lack easy access to formal finance. The scheme also allows higher loan ceilings for crop and grain activities, livestock and poultry farming, agricultural machinery, and other rural income-generating activities. By covering different parts of the rural economy, the fund can support not only crop fields but also poultry farms, cattle farms, small machinery services, and village-based income activities. Participating banks will receive refinance support at 4 percent, while the maximum lending rate for end borrowers has been fixed at 8 percent on a simple interest basis. This can make borrowing more manageable for farmers who need money before harvest but earn income later. The repayment period can extend up to 18 months, including a grace period of up to three months. The scheme also encourages banks to support women entrepreneurs and small farmers through personal, social, and group guarantees. This can help include people who are often left out of formal lending systems. Agent banking outlets, sub-branches, and group lending methods are expected to expand the reach of the program at the grassroots level. Monthly progress reporting and monitoring by the central bank can also help ensure proper use of the fund. The scheme comes at a time when food production faces pressure from climate risks, rising costs, and global uncertainty. Affordable credit can help farmers buy seeds, fertilizer, feed, machinery, and other inputs on time. If the program reaches the right people, it can strengthen domestic food production, create rural jobs, improve household income, and make the agriculture sector more resilient.
