Bangladesh Bank has established a special refinancing fund worth Tk 30 billion (3,000 crore) aimed at developing agro-based special economic hubs in the northern region of the country.
This dedicated credit scheme has been launched primarily to generate rural employment by increasing agricultural production, introducing modern preservation systems, and developing the agro-processing industry across the districts of Rajshahi and Rangpur divisions.
According to sources at Bangladesh Bank, borrowers accessing this fund will be charged an interest rate of 9 per cent, which is lower than current market lending rates. In turn, participating commercial banks can secure these funds from the central bank at a 4 per cent interest rate.
Bangladesh Bank stated that ensuring national food security and poverty alleviation in North Bengal is currently hindered by infrastructure deficits in modern post-harvest management and marketing, a lack of specialised cold storage facilities, and limited processing industries for locally grown agricultural produce. This financial assistance will be disbursed to overcome these issues, strengthen the entire agricultural value chain, and boost exports to international markets.
Loan allocations and eligibility
The central bank specified that individuals and enterprises across various districts within the Rajshahi and Rangpur divisions will be the primary beneficiaries of this facility. Farmers can secure loans from this fund either individually or in groups for crop production, fisheries, and livestock rearing.
It further said that agro-based cottage, micro, small, and medium enterprises (CMSMEs) will also benefit from the fund to set up processing industries. Individuals or entities engaged in exporting agricultural and agro-based products will also be eligible. To facilitate smoother financing for women and marginal farmers, provisions have been made to grant loans based on social or group collateral instead of traditional immovable property.
To streamline distribution, the Tk 30 billion fund has been segmented into four primary sectors. Those are – agricultural production: allocated 15 per cent of the total fund; preservation, transport, and infrastructure: allocated 35 per cent of the fund; agro-based product manufacturing and processing: allocated 35 per cent of the fund; agricultural export sector: allocated the remaining 15 per cent of the fund.
Bangladesh Bank has set the maximum loan ceiling for the agricultural production sector at Tk 3 million (30 lakh). For the preservation, transport, marketing, and infrastructure development sector, the upper loan limit is Tk 400 million (40 crore). The agro-based manufacturing and processing sector also carries a limit of Tk 400 million, while the maximum ceiling for agricultural and agro-based product exports stands at Tk 150 million. However, depending on actual requirements, banks may increase or decrease these loan limits by up to 20 per cent.
The maximum tenure for loans in the agricultural production sector is 18 months (including a 3-month grace period). For all other sectors (preservation, processing, and export), the maximum tenure is 36 months (including a 3 to 6-month grace period).
The central bank's directive strictly stipulates that funds from this facility must be disbursed solely as 'fresh loans'. Under no circumstances can this fund be utilised to adjust existing loans or regularise defaulted ones. No individual or entity classified as a defaulter will be eligible for this credit. Furthermore, banks are barred from levying any fees or charges on customers other than those officially prescribed by Bangladesh Bank.
Interested clients have been advised to contact their nearest scheduled bank branches, sub-branches, or agent banking outlets to avail themselves of this facility.
