Agricultural lending and loan recoveries increased in December, but overdue farm loans surged sharply, raising asset quality concerns in the rural credit sector, according to Bangladesh Bank data.
Scheduled banks disbursed Tk4,915 crore in agricultural loans in December 2025, up 18.02 per cent from Tk4,165 crore in November and 54.67 per cent higher than Tk3,178 crore in the same month a year earlier.
Loan recoveries from agricultural borrowers reached Tk3,956 crore during the month, marking a 3.38 per cent rise from November and a 29.81 per cent increase from Tk3,048 crore recovered in December 2024.
During July–December of fiscal year 2025–26, the composition of agricultural credit shifted modestly towards core production activities.
The share of credit allocated to crop production rose to 49 per cent from 47 per cent in the same period of the previous fiscal year.
Loans for livestock and poultry increased to 26 per cent from 24 per cent.
However, the share of fisheries loans declined to 13 per cent from 15 per cent, while credit for other sectors dropped to 8 per cent from 10 per cent.
Credit allocated for poverty alleviation programmes remained unchanged at around 4 per cent.
Outstanding agricultural credit, including interest, stood at Tk62,723 crore at the end of December 2025, up 11.97 per cent from Tk56,019 crore a year earlier.
Overdue agricultural loans rose to Tk22,693 crore from Tk11,600 crore in December 2024, reflecting a 95.63 per cent increase largely driven by higher defaults at state-owned specialised banks and private commercial banks.
However, overdue balances at state-owned commercial banks declined by 0.81 per cent compared with the previous year.
Deputy Managing Director of Bangladesh Krishi Bank Md. Abdur Rahim said, “Our current challenge is managing previous loans. Even recovering those is tough.”
“Nevertheless, among the past Tk 18 thousand crore loans, we have recovered Tk 3,250 crore by the end of February,” he told TIMES.
He expects Bangladesh Krishi Bank to return to profitability by June since is inaguration as the recovery of our regular loans is going well.
He said manpower is a major challenge. While an officer can ideally manage 1,000 accounts, some are handling 4,000–5,000. Fortunately, he added, the staff are exceptionally hardworking.
Additionally, the government, on 26 February, decided to waive agricultural loans up to Tk 10,000 along with accrued interest. He described it as a commendable move set to help 1.3 million farmers nationwide.
“The way to overcome these challenges is not just by planning but by taking responsibility and working diligently. Everything must be closely monitored,” said Rahim.
In the microcredit sector, Grameen Bank and ten large non-governmental organisations disbursed Tk20,635 crore in December 2025, up 11.12 per cent from the same period a year earlier.
Around 37 million members accessed microcredit services through 14,296 branches operated by the top 11 microfinance institutions.
Grameen Bank, BRAC and ASA together accounted for 72 per cent of the total microcredit disbursement in December.
They recovered Tk17,679 crore during the month, an increase of 7.83 per cent year on year.
Outstanding microcredit stood at Tk130,230 crore at the end of December 2025, with overdue loans of Tk8,128 crore representing 6.24 per cent of the total balance.
Bangladesh Bank has set the agricultural credit disbursement target for fiscal year 2025–26 at Tk39,000 crore, up 2.63 per cent from Tk38,000 crore in the previous fiscal year and 4.48 per cent higher than the actual disbursement of Tk37,327 crore last year.
