Agricultural loan disbursement in Bangladesh fell by over 6% in the first eight months of the 2024-25 fiscal year, largely due to ongoing political uncertainty and high interest rates, according to bankers.

According to Bangladesh Bank data, between July 2024 and February 2025, farm credit disbursement dropped to Tk 221.26 billion, down from Tk 236.91 billion in the same period of the previous fiscal year. Public banks provided Tk 92.08 billion, while private and foreign banks disbursed Tk 129.18 billion.

A senior official of Bangladesh Krishi Bank told The Financial Express that the decline was particularly noticeable in the livestock and poultry sectors. However, he noted a recent uptick in lending due to seasonal factors.

During the July-January period, agricultural loan disbursement had fallen by over 9% year-on-year to Tk 192.15 billion. To address the issue, the central bank plans to issue fresh instructions next week to eight public banks, including Sonali, Janata, Agrani, Rupali, BASIC, Bangladesh Development Bank, BKB, and RAKUB, urging them to strengthen lending activities to support food security and agricultural production.

Despite the slowdown, the central bank remains optimistic, with officials highlighting that agricultural loan disbursement has started to recover. As of February, banks have achieved 58.23% of the Tk 380 billion farm loan target for FY25, compared to 67.69% during the same period in the previous year.

Meanwhile, farm loan recovery improved, reaching Tk 244.24 billion, up from Tk 226.62 billion a year earlier.