Agricultural loan disbursement surged in August, indicating growing demand for seasonal financing and renewed efforts by banks to expand rural credit, according to the latest data from Bangladesh Bank (BB).

During the first two months of the current fiscal year (FY2025–26), farm-loan disbursement reached Tk 48.26 billion — a 24.7 per cent increase from Tk 38.70 billion recorded in the same period of FY2024–25. In August alone, banks disbursed Tk 26.72 billion in agricultural loans, up 28.4 per cent from Tk 20.80 billion a year earlier.

The volume, however, was lower than July’s Tk 21.54 billion, the BB data showed. Outstanding agricultural loans stood at Tk 595.41 billion at the end of August, reflecting a 6.66 per cent rise year-on-year.

Loan recovery in the sector also strengthened, reaching Tk 31.19 billion in August 2025, compared with Tk 29.11 billion a year earlier — an increase of nearly 7.2 per cent.

Experts attributed the rise in disbursement to rising input costs, expanding cultivation, and banks’ more aggressive outreach to rural borrowers under the central bank’s renewed focus on agricultural financing.

They noted that while higher credit flow supports farm productivity, it must be matched with stronger monitoring and technical assistance to ensure effective utilization.

About 5.52 per cent of the annual agricultural credit target was achieved in July, BB data showed. The central bank has set a disbursement goal of Tk 390 billion for FY2025–26 — 2.63 per cent higher than the previous year’s Tk 380 billion.

Commenting on the trend, Policy Exchange Bangladesh Chairman Dr Masrur Reaz said the increase in farm credit reflects “a combination of higher production costs, banks’ improved rural outreach, and better repayment discipline among farmers.”