Unsecured loan to farmers possible: minister

Agriculture Minister Muhammad Abdur Razzaque said it was possible to provide genuine farmers with unsecured loans on simple terms.

“The government offers agricultural loans to farmers at an interest rate of only 4 percent. But farmers often cannot meet the complicated conditions to get the loan,” he said at a seminar on Sunday. financial inclusion of the country’s livestock sector in Dhaka.

Abdur Razzaque called for facilitating the lending process for farmers and rolling out collateral-free agricultural loans.

Ainul Haque, Project Coordinator of the United Nations Industrial Development Organization (UNIDO) in Bangladesh and also former Director General of the Bangladesh Livestock Research Institute, gave the keynote speech for the programme.

The keynote address pointed out that smallholder farmers in the livestock sector avoid agricultural loans due to complicated loan processes, bank reluctance and lack of collateral.

In rural Bangladesh, 75% of borrowing families take loans from NGOs at an interest rate of 20% to 30%, as agribusinesses receive agricultural loans, according to the document.

He said the livestock sector secured only 14% of agricultural loans disbursed in the 2021-22 financial year.

In the livestock sector, Ainul Haque identified infectious diseases, management issues and lack of institutional facilities for insurance as major barriers to financial inclusion.

Emphasizing insurance for all domestic animals, the Minister of Agriculture also said that the livestock sector must fall under insurance services.

Abdur Razzaque said the livestock sector has a lot of potential to meet the nutritional needs of the nation.

“But surprisingly, our farmers are selling milk at a pittance, while we have to spend Tk 2,000 crore every year to import milk,” he said.

Prof. Hasina Sheikh from Department of Banking and Insurance, University of Dhaka and other seminar participants called for establishment of database and policy for smallholder farmers for inclusion financial.