BB unleashes Tk 60,000cr farm credit push as lending target jumps 54pc

Bangladesh Bank has set an unprecedented Tk60,000 crore agricultural and rural credit target for FY2026-27, putting banks under intense pressure to channel substantially more funds into farming and the rural economy.

The new target is Tk21,000 crore, or 54 per cent, higher than the Tk39,000 crore target set for the previous fiscal year and Tk17,166 crore above actual disbursement of Tk42,834 crore in FY2025-26.

Banks had exceeded the previous target by Tk3,834 crore, achieving 109.83 per cent of the FY26 goal. Yet the latest decision means they must increase actual agricultural lending by around 40 per cent in a single year to reach the new target.

The ambitious target was announced on Monday at Bangladesh Bank headquarters while unveiling the Agricultural and Rural Credit Policy and Programme for FY2026-27.

Deputy Governor Habibur Rahman acknowledged that the sharp increase would put additional pressure on banks, but expressed confidence that the target was achievable.

The scale of the hike marks a dramatic departure from the previous trend. The FY26 target was only 2.63 per cent higher than the Tk38,000 crore target fixed for FY25.

Of the new Tk60,000 crore target, Tk20,495 crore has been assigned to state-owned and specialised commercial banks, while private and foreign banks will shoulder the lion's share �" Tk39,505 crore.

Bangladesh Bank is also seeking to push agricultural credit from the margins of bank financing towards a more meaningful share of total lending. Agricultural loans currently account for only around 2.5 per cent of overall bank credit, but the central bank expects the proportion to rise to around 4 per cent under the new programme.

Small farmers get collateral relief
The new policy also seeks to ease access to finance for small and marginal borrowers.

Banks will not be allowed to demand collateral for agricultural loans of up to Tk5 lakh. Women and marginal farmers will also be permitted to use social or group guarantees instead of land or other fixed assets as security.

For fisheries and livestock borrowers, banks cannot impose service charges beyond documentation costs on loans of up to Tk5 lakh. The same facility will apply to salt cultivation covering up to 2.5 acres.
The central bank has also significantly widened the range of activities eligible for agricultural credit.

Fish and poultry hatcheries have been brought under the programme, while camel rearing has also been recognised as an eligible agricultural activity.

Production of organic fertiliser using materials including shimul root, ashwagandha, mishri dana, rosella, shatamuli, tree potato, blueberry and eggshells will also qualify for agricultural financing.

BB tightens focus on genuine farmers
With the much larger lending target comes a stronger emphasis on ensuring that the money actually reaches farmers and rural entrepreneurs rather than being diverted elsewhere.

Banks may verify borrowers through certificates issued by local agriculture, fisheries or livestock officials. A government-issued Farmer Card can also be used to establish the borrower's eligibility.

Bangladesh Bank has further instructed banks to distribute at least 50 per cent of their individual agricultural lending targets through their own branch networks. Third-party linkage networks may be used for the remaining portion.

The tougher lending push follows a strong performance in FY26, when around 3.78 million people received agricultural loans.

The central bank's decision to raise the target sharply reflects that performance, but it also sends a broader signal: agriculture and rural economic activity are being pushed towards the centre of Bangladesh's banking strategy.

The challenge, however, will be whether banks can deliver an additional Tk17,166 crore without compromising credit quality, borrower selection and recovery discipline.

Bangladesh Bank spokesperson and Executive Director of its Agricultural Credit Department Arief Hossain Khan was also present at the press conference.