Bangladesh’s banks increased agricultural and rural lending by 42.10 per cent in the first two months of the 2026-27 financial year, but disbursement remained behind the pace needed to meet a sharply higher annual target set by the central bank.
Banks disbursed Tk6,857.95 crore in July and August, compared with Tk4,826.03 crore a year earlier, achieving 11.43 per cent of Bangladesh Bank’s Tk60,000 crore lending target for the full financial year.
The central bank raised the annual target by 53.85 per cent for this fiscal year from Tk39,000 crore in FY2025-26, requiring banks to expand agricultural and rural credit substantially faster than before.
With two of the financial year’s 12 months completed, banks would have needed to disburse Tk10,000 crore, or 16.67 per cent of the annual target, to remain on an even monthly pace.
Actual lending fell short of that benchmark by Tk3,142.05 crore.
If lending continued at the July-August average throughout the year, total disbursement would reach approximately Tk41,148 crore, about Tk18,852 crore below the target.
However, that calculation does not account for seasonal changes in agricultural credit demand.
To achieve the full-year goal, banks must distribute another Tk53,142.05 crore over the remaining 10 months, averaging Tk5,314.21 crore a month, compared with Tk3,428.98 crore in the first two months.
The figures appeared in Bangladesh Bank’s August 2026 report on agricultural and non-agricultural rural credit, released on Sunday.
Loan recovery also strengthened, rising 22.16 per cent to Tk7,419.55 crore during July and August from Tk6,073.58 crore a year earlier.
Private commercial banks accounted for the largest share of agricultural and rural lending, contributing 36.72 per cent of total disbursement. Specialised banks followed with 25 per cent, Islamic banks with 18.71 per cent, foreign commercial banks with 9.93 per cent and state-owned commercial banks with 9.64 per cent.
Foreign commercial banks, however, led in meeting their individual annual lending targets, achieving 26.45 per cent in the first two months.
Islamic banks achieved 12.93 per cent of their targets, followed by specialised banks at 12.65 per cent and state-owned commercial banks at 9.52 per cent. Private commercial banks recorded the lowest achievement rate at 9.32 per cent despite accounting for the largest share of lending.
The Bangladesh Rural Development Board has a separate annual agricultural and rural credit target of Tk1,506.65 crore.
In August, the board disbursed Tk207.91 crore, up 6.27 per cent from a year earlier, while loan recovery rose 9.16 per cent to Tk223.81 crore.
Crop cultivation received the largest share of agricultural and rural credit during July and August, accounting for 45.77 per cent of total disbursement.
Livestock and poultry received 31.59 per cent, fisheries 13.23 per cent and non-agricultural rural activities 7.96 per cent.
Irrigation and agricultural equipment together accounted for just 0.86 per cent, including 0.49 per cent for irrigation and 0.37 per cent for agricultural machinery.
Bangladesh Bank’s agricultural and rural credit policy sets allocations of 55 per cent for crops, 20 per cent for livestock and poultry, 13 per cent for fisheries and 2 per cent for irrigation and agricultural equipment.
The remaining 10 per cent is earmarked for rural production and income-generating activities.
The first two months’ figures show that crop lending fell below its prescribed share, while livestock and poultry received substantially more.
Lending for irrigation and agricultural equipment also remained below the policy allocation.
The banking sector’s overall agricultural and rural loan recovery indicators improved from a year earlier as classified loans fell 2.46 per cent to Tk19,017.39 crore in August this year from Tk19,497.51 crore a year ago.
However, total outstanding agricultural and rural credit rose 6.85 per cent to Tk63,620.27 crore from Tk59,541.84 crore.
Bangladesh Bank’s decade-long figures show annual agricultural lending more than doubled between 2016-17 and 2025-26, rising 104 per cent from Tk20,999 crore to Tk42,834 crore. Loan recovery increased 142 per cent to Tk45,627 crore.
Over the same period, classified agricultural loans surged 254 per cent to Tk18,578 crore. Total outstanding agricultural credit increased 63 per cent.
