“Loan products must be developed to cater to the specific needs of farmers”

Tarique Afzal, Managing Director & CEO, AB Bank

For better facilitation of the farmers in our country, the introduction of smart and simplified loan application procedures with less paperwork and processing time is a prerequisite. Loan products with flexible repayment terms, low-interest rates, and grace periods according to different agricultural product cycles must be developed to cater to the specific needs of farmers.

The current banking environment often fails to provide farmers with easy-term loans. Additionally, informal lenders charge high rates of interest. In response to this challenge, AB Bank has stepped into the disbursement of low-cost, collateral-free, and convenient "Open Credit Disbursement Programme" via smart cards, enabling easy access and repayment through Mobile Financial Services. To achieve self-sufficiency in the food sector through the agricultural revolution, we have taken the initiative to disburse Agri loans to marginal farmers through AB Smart Card, covering 43 Upazillas in 11 districts. Our initiative has benefited 27,000 marginal farmers, mostly landless and sharecroppers, supporting various agricultural activities from crop cultivation to livestock farming. Our programs have directly and successfully contributed to the agricultural production of 24,000 metric tons of grains across 12,500 acres of land.

Bangladesh Banks can allow banks to open more sub-branches in rural areas, provide coverage for the entire agri-loan through a credit guarantee scheme, offer more subsidies and incentives, and encourage the adoption of technology in the loan application and disbursement process, such as online platforms or mobile applications, facilitating coordination and collaboration among government agencies, financial institutions, agricultural organizations, and other stakeholders involved in agricultural lending.