Agricultural lending in Bangladesh saw a significant increase of nearly 15 percent during the fiscal year 2025-26, surpassing the annual target set by the central bank. This growth was primarily fueled by robust lending activities from specialized and private commercial banks.
According to the latest agricultural and rural credit report from the central bank, banks disbursed a total of Tk 42,834.16 crore in agricultural and rural credit, marking a 14.76 percent increase from the previous year. This amount represented 109.83 percent of the Tk 39,000 crore lending target set for the country’s 58 participating banks.
Among the different types of banks, private commercial banks led the way with a 43.15 percent share of the total lending, followed by specialized banks and Islamic banks contributing 14.15 percent.
Specialized banks outperformed their targets by disbursing Tk 12,615.57 crore, which was 123.4 percent of their allocation. State-owned commercial banks achieved 109.89 percent of their target, while private commercial banks and foreign commercial banks reached 108.05 percent and 104.05 percent, respectively.
However, Islamic banks fell short of their target by disbursing Tk 6,059.32 crore, which was 94.37 percent of the planned amount.
The report also noted a discrepancy between policy objectives and the distribution of credit across sectors. While crop production received 47.32 percent of total lending, falling short of the 55 percent policy target, sectors like livestock and poultry exceeded their targets.
On the recovery front, agricultural loan repayments increased by 19.99 percent year-on-year, totaling Tk 45,626.93 crore. Asset quality also showed improvement, as overdue agricultural loans decreased by 8.43 percent to Tk 19,807.33 crore, and classified loans dropped by 5.92 percent to Tk 18,578.47 crore.
Foreign commercial banks reported a noteworthy performance, doubling their loan recoveries from the previous fiscal year and maintaining a clean record with no overdue or classified agricultural loans for the second consecutive year.
Despite the positive lending trends, Bangladesh Bank emphasized the ongoing challenge posed by the high volume of overdue and classified loans. The central bank underscored the importance of prioritizing loan recovery efforts and enhancing the management of defaulted loans to sustain the positive outlook for agricultural finance.
