Government cancels Tk 10,000 loans for 12 lakh farmers on PM’s instruction

At the Prime Minister’s directive, the government has decided to write off agricultural loans of up to Tk 10,000 — along with all accrued interest — for 12 lakh farmers nationwide.

The decision was approved at a cabinet meeting held today at the Bangladesh Secretariat and chaired by Prime Minister Tarique Rahman.

Cabinet Secretary Nasimul Ghani told reporters after the meeting that the waiver will cover loans taken in the grain, crop, fisheries and livestock sectors, in keeping with the government’s election manifesto commitments.

He said the primary aim of the measure is to strengthen social protection for poor and marginal farmers while reinforcing the foundation of the country’s agricultural sector.

Around 12 lakh farmers are expected to benefit directly from the initiative. Both the principal amount — up to Tk 10,000 — and the entire accumulated interest on those loans will be forgiven.

The Cabinet Secretary said the decision will ease the debt burden on small and marginal farmers, enabling them to reinvest more actively in agricultural activities.

“Funds that would otherwise have gone toward loan repayments can now be used to buy quality seeds or adopt modern irrigation methods,” he said, adding that freedom from debt pressure would help farmers start the next cultivation season with renewed confidence.

The waiver is also likely to improve farmers’ credit records and overall creditworthiness, making it easier for them to secure fresh agricultural loans from banks at lower interest rates and reducing their dependence on high-interest borrowing from local moneylenders.

Officials expect that lighter debt burdens will encourage greater participation in crop cultivation, fisheries and livestock production, boosting overall agricultural output and lowering reliance on imports.

The Cabinet Secretary added that the immediate effects of the measure could include reduced rural-to-urban migration and some relief from inflationary pressures in rural areas.

According to Bangladesh Bank, as of February 25, farmers owed about Tk 1,550 crore, including interest, to public commercial banks, specialised banks and private commercial banks.