Bangladesh Bank (BB) has formed a refinancing scheme of Tk 1.0 billion for wheat and maize cultivators in a bid to increase the yield of the food grains and reduce the country's dependency on imports.
To this end, the central bank on Thursday published a guideline on implementing the scheme that also looks to cut the reliance on imports.
Under the scheme, a customer can get a loan with 4.0 per cent interest rate, reports BSS.
Banks will give loans directly to farmers and will pay the central bank 0.50 per cent interest against their disbursed amount.
As per the guideline, despite higher demand, the local production of wheat and maize is not adequate. As a result, the country has to import a significant volume of cereals to ensure a smooth supply of the products and the items produced from them.
This means Bangladesh has to spend a huge amount on foreign currencies.
Under the circumstances, a decision to unveil a Tk 1.0 billion refinance scheme has been taken, said the BB. The scheme will run until June 2025.
Banks would have to disburse the loans directly among the borrowers through their networks and give priority to the areas suitable for wheat and maize cultivation.
Landless farmers, who own less than 0.494 acres of land, small and marginal farmers, who own 0.494 to 2.47 acres of land, and share-croppers could be given loans up to Tk 0.20 million without any collateral.
The loan given under the scheme can't be used to adjust old loans, said the BB.