BB, UCB ink deal to boost agri and rural financing

Bangladesh Bank (BB) and United Commercial Bank PLC (UCB) have signed an agreement to expand access to finance for farmers, rural entrepreneurs and businesses under a new refinance scheme for the agriculture and rural sectors.
Under the agreement, UCB will provide financing through Bangladesh Bank’s Tk 10,000 crore refinance scheme. The loans will support a wide range of activities, including crop and agricultural production, the purchase of agricultural machinery, fisheries and livestock, as well as other income-generating activities in rural areas, says a press release.
AKM Saiduzzaman, Director of Bangladesh Bank’s Agricultural Credit Department-2, attended the agreement signing ceremony. UCB Deputy Managing Director Md Ridwanul Hoque and Head of the SME and Agri Banking Division Mohammad Salim Chowdhury and Senior officials from both institutions were also present.
The loan tenure will be up to 18 months, with a grace period available where applicable. At the customer level, the interest rate will be capped at 8 percent. The refinance facility, however, cannot be used to repay or adjust existing loans or investments.
To make the financing more accessible, UCB will distribute the loans through its branches, sub-branches, agent banking outlets and group-based lending channels. This will help bring formal financing closer to farmers and rural entrepreneurs, including those who may have limited access to traditional banking services.