Written by The Banking Post
Agricultural lending in Bangladesh posted strong growth in the first half of FY26, with both loan disbursement and recovery rising sharply, pushing outstanding farm credit above Tk 627 billion, central bank data shows.
According to Bangladesh Bank figures, agricultural loan disbursement reached Tk 210.08 billion during July–December of FY26, up 29.2 percent from Tk 162.59 billion in the same period a year earlier. Loan recoveries also improved, climbing 13.9 percent year-on-year to Tk 217.74 billion.
As a result, outstanding agricultural loans stood at Tk 627.23 billion at the end of December, marking a 12.0 percent increase from Tk 560.19 billion in the corresponding period of the previous fiscal year.
For the full FY26, the central bank has set an agricultural and rural credit disbursement target of Tk 390 billion, 2.63 percent higher than last year’s Tk 380 billion.
Bankers and sector stakeholders say the rise in disbursement reflects farmers’ growing demand for institutional credit amid higher input costs and expanding cultivation. They also point to a more proactive stance by banks following the central bank’s renewed push to boost agricultural financing.
However, they caution that higher lending must be matched with stronger monitoring and technical support to ensure productive use of funds. Expanding access for small and marginal farmers remains critical, as many still depend on informal sources of credit.
“The rise in both disbursement and recovery of agricultural loans is a positive signal for Bangladesh’s rural economy,” said an economist, noting that timely and well-managed credit is key to lifting productivity and supporting farm incomes.
Easier access to finance allows farmers to invest in better seeds, irrigation and machinery, which can raise yields and strengthen food security, he said. Improved recovery rates also suggest responsible borrowing, helping create a sustainable credit cycle that benefits both lenders and rural communities.
He added that policymakers and banks should continue expanding outreach to small and marginal farmers to ensure agricultural finance remains inclusive and supports long-term rural development.
