Bangladesh Bank has set a BDT600bn ($4.91bn) target for agricultural and rural loan disbursements in fiscal year 2026-27, an increase of nearly 54% from the previous target, The Financial Express reports.

Under the new Agricultural and Rural Credit Policy, state-owned and specialised commercial banks have been assigned a combined disbursement target of BDT204.95bn, while private and foreign banks will account for the remaining BDT395.05bn.

The central bank unveiled the target on August 17 at the Jahangir Alam Auditorium in Dhaka. Deputy Governor Habibur Rahman said the higher target would put some pressure on banks but remained achievable.

The revised policy introduces several measures to expand access to agricultural finance. Banks will not be allowed to impose service charges, apart from documentation fees, on loans of up to BDT500,000 for fisheries and livestock activities, as well as loans for salt cultivation on up to 1.01 hectares of land.

Banks will also be prohibited from requiring collateral for loans of up to BDT500,000. Women and marginalised farmers can use social or group guarantees as alternatives to land or other immovable assets.

The scope of eligible agricultural activities has also been expanded. Cultivation of Simul Mool, Ashwagandha, Mishri Dana, Roselle, Shatamooli, Yam (Gach Alu) and blueberries will now qualify for agricultural credit, along with organic fertiliser production using eggshells.

Fish and poultry hatcheries and camel rearing have also been added to the agricultural lending programme.

To ensure that credit reaches genuine farmers, banks will be able to verify borrowers through certificates issued by local agriculture, fisheries and livestock officials or through the government-issued Farmer Card.

Habibur said agricultural lending currently represents about 2.5% of total bank credit. The new target is expected to increase the sector's share to around 4% of overall bank lending during FY27.

Banks disbursed BDT428bn in agricultural loans in FY2025-26, exceeding the target by 9.83% and reaching 3.78mn beneficiaries, according to Bangladesh Bank data. The FY26 target stood at BDT395bn, 14% higher than the previous year’s target.

Under the new policy, banks must channel at least 50% of their agricultural lending target through their own branch and distribution networks. The remainder may be disbursed through third-party linkage networks.