BRAC Bank and the United States Agency for International Development (USAID) Feed the Future (FtF) Bangladesh Rice and Diversified Crops (RDC) Activity have entered into a partnership to support the farmers in mitigating the impact of COVID-19.
The partnership intends to extend fresh credit opportunities to the farmers and small and medium-sized agricultural businesses operating in USAID FtF zone. The credit services will be provided through ‘safe touch points (retail outlets)’ of BRAC Bank and through a partnership with MFI channels to “Marginal farmers”.
BRAC Bank will mobilize safe touchpoints (agent banking outlets and SME unit offices) in different Upazilas of the FtF zone.
Syed Abdul Momen, Head of SME at BRAC Bank said, "We are assessing ways to improve farmers' socio-economic life post the COVID-19 hit. We aim to provide financial services in the form of credit for crops which fall under profitable rice-based cropping pattern in the FtF zones. This partnership will also help us leverage the Government stimulus packages and contribute to the agri-sector landscape of the country".
RDC will support BRAC Bank to offer financial services (SME Loans) to local service providers and producers (channel banking farming community) to improve awareness, efficiency, growth, and evidence-based decision-making business models.
More than 1,000 farmers will be impacted during the pilot phase through access to BRAC Bank’s credit facilities. Around 72% of the farmers will be women.
BRAC Bank will also ensure that 20% of the loans go to SMEs that deal with input distribution while 30% will be disbursed to those involved in crop management (including mechanization) and 50% to the post-harvest management, trading, and market linkages through the agent banking outlets or SME unit offices of the bank.
Disbursement of loans will be done through the MFI network to overcome the financial challenges in the coming months and in other similar projects.
Cuan Opperman, Chief of Party of the RDC Activity said, "We are really pleased to be working with BRAC Bank to extend credit to farmers in these challenging times. We hope that this initiative is the first step to expanding access to finance to even more farmers."
The RDC Activity is implemented by ACDI VOCA. ACDI/VOCA is a global development design and delivery partner based in Washington, D.C.