The share of credit disbursement to the livestock and poultry subsectors of the agriculture industry slipped slightly in the first eight months of the current fiscal year (FY), according to a report by Bangladesh Bank.

 It said that about 24 percent of the total credit disbursements for agriculture went to livestock and poultry businesses during the July-February period, while the share was 25 percent during the corresponding months of FY24.

Meanwhile, the crops subsector continued to dominate, claiming 48 percent of the disbursements in the first eight months of FY25 compared to 45 percent during the same period of FY24.

However, the fisheries subsector got the smallest share of 15 percent in July-February of FY25 compared to 14 percent for the same period of FY24.

 The report also said that scheduled banks in the country disbursed a total of Tk 22,125 crore for agriculture in the July-February period of FY25, reflecting a decrease of 6.60 percent year-on-year.

This significant downturn is due to reduced disbursements by private commercial banks (16.71 percent) and state-owned commercial banks (0.64 percent).

On the other hand, disbursements by state-owned specialised banks and foreign commercial banks increased 12.85 percent and 4.93 percent respectively compared to their values in the July-February months of FY24.

Mohammad Ali, managing director of Pubali Bank, told The Daily Star that entrepreneurs in the poultry and livestock subsectors secured favourable prices for their products in 2022, 2023, and 2024.

He explained that farmers' profit margins improved at the same time, thereby reducing their reliance on loans and causing a subsequent decline in overall borrowing.

 Ali further said that as inflation has eased from double to single digits, the resulting decrease in production costs curbed the demand for agricultural loans.

 An official of Bangladesh Krishi Bank said their credit disbursements to livestock and poultry businesses increased by Tk 102 crore year-on-year in the July-February period.

At the same time, overall agriculture credit disbursements increased by Tk 689 crore, he added.

THE SITUATION A FARMER FACED WHILE TAKING A LOAN

Mohammad Azizul Islam, a farmer from Dinajpur, said he took a loan of Tk 50,000 from a private bank last year at an interest rate of 4 percent without collateral.

Although the loan documents mentioned Tk 50,000, he claims to have received only Tk 48,000.

 Islam alleged that the bank initially promised to provide Tk 1 lakh but later reduced the amount because he is not involved in Awami League politics.

 "The most pathetic part is that while the bank initially mentioned a 4 percent interest rate, when it came time to repay, I was charged 11 percent," he said.

 Later, upon inquiry, the bank informed him that they increased the interest rate due to his failure to meet all loan conditions.

 "I couldn't read through all the terms and conditions. Had I known the interest rate would rise to 11 percent, I would never have taken the loan," the farmer added.

 Jahangir Alam Khan, an agricultural economist, said loan processing and disbursements are typically handled by local branch managers of banks.

 However, a key issue is the extent to which they maintain communication with entrepreneurs in the poultry and livestock subsectors.

 The current situation of these subsectors is challenging, and although there is high demand for loans, they are not being given priority by the banks.

 As such, overall loan disbursements have decreased, he said, while adding that the banks need to take a more proactive approach to support these industries.