Defaulted farm loans rise by 13.24pc in Jul-Feb.

The defaulted loans in the agriculture sector increased by 13.24 per cent in eight months of this financial year as the recent political unrest disrupted marketing of the agricultural products. The unrest also put an adverse impact on the farm loan disbursement in the period. According to the Bangladesh Bank data released on Monday, the defaulted loans in the farm sector rose to Tk 7,144.28 crore as of February 28, 2015 from Tk 6,308.95 crore as of June 30, 2014. A large number of farmers failed to repay their loans mainly in January and February this year as they counted losses for failure in supplying their products to upazila and district headquarters and to metropolitan cities due to a countrywide nonstop blockade along with many spells of hartals enforced by the BNP-led alliance since the first week of January, a BB official told New Age on Monday. He said that the defaulted farm loans had decreased significantly in the first quarter of the FY15 due to an eased political situation in the period. The defaulted loans in agriculture sector were Tk 6,006.80 crore as of September 30, 2014.

The farm sector defaulted loans accounted for 23.35 per cent of the total loans (Tk 30,594.92 crore) disbursed in the sector as of February 28, 2015. The classified loans in the sector were 21.13 per cent of the total loans (Tk 32,178.97 crore) disbursed as of February 28 last year. Six state-run banks — Sonali, Janata, Agrani, Rupali, Bangladesh Krishi and Rajshahi Krishi Unnayan banks — held the majority of the defaulted farm loans. The BB data showed that the defaulted farm loans also increased year-on-year. The farm sector defaulted loans in the six state-run banks increased by 4.89 per cent to Tk 7,058.56 crore as of February 28, 2015 from Tk 6,729.31 crore as of February 28, 2014. The farm sector defaulted loans in the six banks stood at 28.57 per cent of the total loans amounting to Tk 24,706.06 crore disbursed by the banks to the sector as of February 28, 2015. The agriculture sector defaulted loans in the private and foreign commercial banks increased to Tk 85.72 crore as of February 28, 2015 from Tk 72.69 crore as of February 28, 2014.

The sector’s defaulted loans in the PCBs and the FCBs stood at 1.45 per cent of their total loans amounting to Tk 5,888.86 crore disbursed to the sector as of February 28, 2015. The BB official said that the state-run banks held larger amount of the agriculture defaulted loans than those of the PCBs and the FCBs as the state-run banks usually disburse the majority of the agriculture loans in the banking sector. The political unrest also put an adverse impact on the farm loan disbursement as it (farm loan disbursement) decreased by 1.91 per cent in eight months of the FY15 compared with that in the same period of the FY14. The farmers are now reluctant to receive farm loans as they are not getting fair prices of their products due to political unrest, the BB official said. The farm loan disbursement by all scheduled banks decreased to Tk 9,914.10 crore in July-February of the FY15 from that of Tk 10,107.85 crore in the same period of the FY14. The BB official said that the defaulted loans in the agriculture sector would increase further in the coming months along with a declining trend in loan disbursement if the political unrest persists. Prices of the most of the farm products declined significantly at the upazila level in the last few months as the farmers failed to supply the products to the district headquarters and the metropolitan cities due to a setback in the transportation system amid the ongoing political crisis, he added.

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