Dhaka, Bangladesh (BBN)- Sharecroppers will receive collateral-free loans for the first time as the central bank has taken up a BDT 5.0 billion special refinancing scheme with a leading non-governmental organization (NGO).
The Bangladesh Bank (BB) on Wednesday signed an agreement with BRAC in this connection to provide around 300,000 sharecroppers with such loan across the country.
Under the deal, the BRAC will borrow fund from the central bank under the refinancing scheme at 5.0 percent interest and distribute collateral-free loans to sharecroppers at 10 percent.
The general manager of the Agricultural Credit and Special Programs Department of the Bangladesh Bank, B SM Moniruzzaman and the Director Finance of the BRAC, S N Kairy, signed the agreement on behalf of their respective organization.
“We’ll monitor the overall operation of the scheme to ensure distribution of such loans to the real sharecroppers,” BB Governor Atiur Rahman said after signing the deal at the central bank conference room.
The BB governor also said the central bank will asses the overall performance of the scheme in the middle of next year.
“We’ll take decision on further expansion of the scheme on the basis of assessment report,” Mr. Rahman said, adding that the BRAC had already given 100 per cent bank grantee on the refinancing scheme.
The BRAC will disburse such loans to sharecroppers in groups at 150 upazilas under 35 districts across the country.
“We expect the cultivation to expand with the use of modern technology among the sharecroppers under the scheme,” BRAC Chairperson Fazle Hasan Abed said, adding that the central bank would expand such scheme with other NGOs if the scheme becomes a success.
He also said the refinancing scheme will help create an organization of sharecroppers.
Senior Deputy Governor of the BB Nazrul Huda said the central bank has signed the deal with BRAC that has showed interest and it also has a wide network across the country. “We’ll sign such deal with other NGOs if the scheme continues,” Mr. Huda added.
“We’ll start disbursement of the loans to the sharecroppers from November this year,” Executive Director of the BRAC Mahabub Hossain said, adding that the amount of loan would be fixed considering the type of crops and area of farming land.
The BRAC will provide each farmer a maximum of Tk 20,000 under the scheme, Mr. Hossain said, adding that the farmers who have not passed the secondary school certificate (SSC) examination will come under the scheme.
BBN/SS/SI/AD-02Septmeber09-11:38 pm (BST)