Dhaka, Bangladesh (BBN)– Bangladesh Bank (BB) Deputy Governor SK Sur Chowdhury suggested adopting insurance for agriculture to face enormous challenges in the sector in Bangladesh.
“It’s now the high time to adopt agricultural insurance to cope with the challenges,” Chowdhury said, pointing out that the agriculture in Bangladesh is facing enormous challenges due to impact of various natural calamities.
He said access to rural finance is crucial for farm and non-farm growth in rural areas of developing countries where demand for financial services outstrips supply.
“Countries like Bangladesh are highly dependent on the production and exports of agricultural goods where natural calamities causes considerable losses of growth and export opportunities,” the deputy governor said while speaking at a regional workshop held at Hotel Purbani in the capital Dhaka on Tuesday.
Mr. Sur Chowdhury, also Chairman of the APRACA, hoped that outcome from the workshop will emerge as a best policy to adopt agricultural insurance as a remedial measure of agricultural production loses in Bangladesh.
The central bank of Bangladesh and FinServAccess Project of APRACA jointly organized the workshop –Bangladesh capability building on enhancing agricultural insurance access for small hold farmers and entrepreneurs towards sustainable rural and agricultural development—to share experiences on major issues, challenges, strategies, best practices in agricultural insurance.
“To enhance the access of the rural poor particularly smallholder farm households and agri-related rural entrepreneurs, including women and rural youth- to sustainable financial services through policy dialogues, replication of best practices, capacity building of different stakeholders and knowledge sharing in rural finance FinServAccess Project is working for the past two years in this region,” APRACA chairman Mr. Sur Chowdhury explained.
He also said the main project countries are Bangladesh and Nepal in South Asia as well as Cambodia and Myanmar in Southeast Asia.
India, Indonesia, the Philippines and Thailand will be the main sources of expertise and knowledge for testing and learning financial innovations, according to the APRACA chairman. “All APRACA-represented countries will benefit from participation in project activities and dissemination.”
The APRACA has been involved in the promotion of rural and agricultural development and facilitation of exchange of information and expertise in rural and agricultural finance in the region since it was established in October 1977.
It’s representing 70 member institutions from 21 countries in Asia and the Pacific since its inception and the growth and development of APRACA certainly is the result of active cooperation and unsparing support of the member institutions throughout these years.
Mr. Sur Chowdhury said access to rural finance is crucial for farm and non-farm growth in rural areas of developing countries where demand for financial services outstrips supply.
“In the past several decades, many rural finance policies and innovative approaches have been developed, replicated and shared in many countries of Asia and the Pacific region to improve access to and sustainability of rural financial services in order to have greater impact on the rural poor,” the APRACA chairman noted.
However, despite some success in increasing outreach and impact of rural finance delivery as well as achieving viability of rural financial institutions, many challenges still persist: high fixed and transaction costs, issues in combining financial and non-financial products, stringent lending requirements, seasonality and high exposure to risks inherent in agriculture, he added.
Among others Mr. Amalendu Mukherjee, executive vice chairman of the Microcredit Regulatory Authority (MRA) and Mr. Marlowe Aquino, project manager of the APRACA FinServAccess Project also spoke on the occasion.
Besides, more than 30 participants from the central bank, various Micro-Finance Institutions (MFIs) and government agencies took part in the workshop.