Tk-10 account holders to get farm loans

The central bank has initiated a process to disburse loans to farmers by enabling them to open accounts with only Tk 10 initial deposit under a refinancing scheme.

Bangladesh Bank Governor Atiur Rahman handed over a cheque for Tk 20 million to Trust Bank in Dhaka on Thursday under the scheme.

Of the amount, Trust Bank itself will disburse Tk 5 million and the rest through a microcredit organisation, Sojag.

According to the central bank, it is providing the fund to the bank at 5 percent interest but Sojag will charge the farmers 19 percent interest.

The cheque was handed over at a function organised by the Bangladesh Bank’s SME and Green Banking Division, Trust Bank and Sojag at the central bank.

Bangladesh Bank had instructed the commercial banks four years ago to open accounts of farmers with an initial deposit of only Tk 10 for each account. Around 10 million farmers have so far availed the privilege.

Later, the central bank directed the extension of the facility to other low-income people, including readymade garment workers.

Bangladesh Bank set up a Tk 2 billion revolving fund last year to disburse agriculture credits to farmers holding bank accounts.

Thirty-two banks have so far expressed their interest to disburse the credits and 31 of them already signed agreements with the central bank.

Speaking at the cheque handover function, governor Atiur urged Sojag to charge the farmers lower rate of interest.

“We’ve raised the fund for marginal, landless and poor farmers. I hope you (Sojag) will give them loans on soft conditions and at lower rate of interest,” he said.