Importance of Agricultural Credit for Rural Development of Bangladesh: A descriptive Approach
International Journal of Economics, Finance and Management Sciences
Volume 2, Issue 1, February 2014, Pages: 68-83
Received: Dec. 22, 2013; Published: Jan. 30, 2014
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Md. Ariful Islam, BASIC Bank Limited, Khulna, Bangladesh
Md. Rayhan Islam, Business Administration Discipline, Khulna University, Khulna-9208, Bangladesh
Mahmudul Hasan Siddiqui, Unilever Bangladesh Limited, Gulshan-1, Dhaka-1212, Bangladesh
Luthful Karim, BASIC Bank Limited, Khulna, Bangladesh
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Adequate availability of credit on time is an important requirement for the rural people, particularly under conditions of scarcity of resources and uncertainty. Convenient and safes-saving facilities are perhaps even more important to smooth out the peaks and troughs in incomes and expenditures in the rural arena. Lack of savings facilities also force families to rely on inefficient, inconvenient and costly alternatives. Agricultural credit can be a solution for this perspective. In Bangladesh most of the agricultural credits are the small-scale loans for the poor entrepreneurs. It allows them to access in the lending institutions to borrow fund and start their own business for rural development. Several financial institutions developed several strategies, including provision of small loans to the rural poor without collateral. These loans are repayable in predetermined installments. Borrowers are organized into groups, which reduces the risk of being default. These credits also help disseminating valuable information about the borrowers and their living standards. In Bangladesh mainly nationalized Banks and specialized Banks are currently burdened with classified loans. But the collateral free financing offers a new opportunity to invest their funds with little risk. Previous experiences of financial institution show that small credits have proven feasible of lending to the poor for rural development. Therefore, we can say that if they can engage themselves efficiently, agricultural credit will accelerate the developmental activities in rural areas of Bangladesh.
Agriculture, Credit, Development, Rural, Invest, Banks
To cite this article
Md. Ariful Islam, Md. Rayhan Islam, Mahmudul Hasan Siddiqui, Luthful Karim, Importance of Agricultural Credit for Rural Development of Bangladesh: A descriptive Approach, International Journal of Economics, Finance and Management Sciences. Vol. 2, No. 1, 2014, pp. 68-83. doi: 10.11648/j.ijefm.20140201.18
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