BB extends Tk1,000cr refinancing scheme for wheat, maize

Business Report :

Bangladesh Bank (BB) has extended the tenure of its Tk 1,000 crore refinancing scheme, designed to boost domestic wheat and maize production, until June 2027. The initiative, first introduced in May 2022, was originally scheduled to end in 2025.

In a circular issued on 28 August, the central bank instructed all scheduled banks to continue disbursing loans under the scheme for another two years, ensuring broader access to low-cost financing for farmers and entrepreneurs engaged in wheat and maize cultivation.

The refinancing fund was created against the backdrop of rising global food prices, supply disruptions, and Bangladesh’s growing dependence on imports for essential grains.

Wheat, in particular, is the country’s second-most consumed cereal after rice, yet domestic production meets only a fraction of annual demand, leaving the market vulnerable to international volatility.

Similarly, maize demand has surged in recent years, driven by its use in poultry and livestock feed, as well as in food processing industries.

Under the scheme, landless, small and marginal farmers, along with sharecroppers, are eligible for collateral-free loans of up to Tk 2 lakh.

Larger borrowers, including agricultural entrepreneurs, can also access financing at concessional interest rates. The central bank expects that by easing access to affordable credit, farmers will be able to expand cultivation, adopt modern farming practices, and improve productivity.

Sector analysts note that the scheme is timely, as Bangladesh seeks to reduce its import dependence and strengthen food security. In fiscal year 2023-24, the country imported over 50 lakh tonnes of wheat, mainly from Russia, Ukraine, and Canada, while local production hovered around 10-12 lakh tonnes.

Maize production has grown steadily but still falls short of domestic demand, which exceeds 60 lakh tonnes annually.

BB officials said the scheme also supports the government’s broader policy of agricultural diversification and resilience. By encouraging cultivation of high-yield crops such as wheat and maize, the initiative aims to reduce excessive reliance on rice and ensure better income opportunities for rural households.

Banks have been instructed to prioritize disbursement to genuine farmers and strengthen monitoring to prevent misuse of funds. Agriculture extension services are also expected to play a role in linking credit with improved farming practices, from seed use to irrigation efficiency.

With the scheme’s extension to 2027, policymakers hope to create a stronger foundation for sustainable grain production, enhance rural livelihoods, and reduce pressure on foreign exchange reserves tied to grain imports.