The impact of coronavirus pandemic in country’s economy is becoming ostensible in several ways. The agricultural sector has also been hit hard. To revive from this Bangladesh Bank (BB) has relaxed agricultural loan rescheduling procedure allowing farmers to reschedule their loans for up to two years without down payment.
Considering a protracted impact of the prevailing pandemic on country’s farming sector, the Central Bank has started working to extend the repayment tenures of different incentives or stimulus packages. It is apprehended that rescheduling of short-term agricultural loans will increase agricultural production by reducing defaulted loans and ensuring uninterrupted credit supply.
Strong administration and monitoring
is needed to avoid the risk of loan default
Due to COVID, farming activities have somewhat hindered and if farmers start loan repayment process early, then they will not be able to focus on increasing food productivity and thus food shortage might take place. Therefore, it was a much needed initiative from the Central bank to extend loan repayment period without down payment.
However, government should work on providing loan incentive to more small and marginalised farmers. If the stimulus package’ implementation is sluggish, agricultural sector will not produce the expected result when it comes to food productivity.
Hence, the low incentives should be utilized and handled properly. The clarity and accountability of these stimulus packages and low incentives are of supreme importance. As most of these loan incentives are in the shape of bank loan, strong administration and monitoring is needed to avoid the risk of loan default.
