The International Institute for Science, Technology and Education (IISTE)
Abstract
Economic theory undoubtedly proved the crucial importance of agricultural sector of a country in case of it’s economic transition. A timely flow of agricultural credit can meet farmers demand to ensure agricultural productivity. The purpose of this study is to explore the pattern of present trend of agricultural credit flow over the recent years, specially from the formal sector banking institutions. This study reveals that formal sector has flourished in recent years in disbursing agricultural credit where previously informal sector dominated the rural credit market for agriculture. NGOs have a stronger network throughout the country and many local private commercial banks and foreign banks use these channel to provide agricultural credit. Although PCBs (which includes domestic and foreign commercial banks) contributes a significant amount to total agricultural credit from formal sector, their percentage contribution to agricultural credit remain almost stagnant since the time they started to disburse agricultural loan. It will also entail discussion about the problem involved in case of agricultural loan disbursement as well as some policy recommendation that may minimize the leakage in agricultural credit distribution to the rural farmers. Keywords: Agricultural Credit, Formal Sector, PCBs, NGOs, SCBs, SBs, Bangladesh