United Commercial Bank signs deal with BB to boost agri financing

United Commercial Bank PLC (UCB) has signed an agreement with Bangladesh Bank to expand access to finance for farmers, rural entrepreneurs and businesses under a new refinance scheme for the agriculture and rural sectors.

AKM Saiduzzaman, director of the Agricultural Credit Department-2 at the central bank, and Md Ridwanul Hoque, deputy managing director of UCB, signed the agreement at Bangladesh Bank headquarters in Motijheel, Dhaka recently, according to a press release.

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The initiative is designed to support agricultural production, strengthen food security, create more employment opportunities in rural areas and contribute to poverty reduction.

Under the agreement, UCB will provide financing through Bangladesh Bank’s Tk 10,000 crore refinance scheme.

The loans will support a wide range of activities, including crop and agricultural production, purchase of agricultural machinery, fisheries and livestock, as well as other income-generating activities in rural areas.

To make the financing more accessible, UCB will distribute the loans through its branches, sub-branches, agent banking outlets and group-based lending channels. This will help bring formal financing closer to farmers and rural entrepreneurs, including those who may have limited access to traditional banking services.

The loan tenure will be up to 18 months, with a grace period available where applicable. At the customer level, the interest rate will be capped at 8 percent. The refinance facility, however, cannot be used to repay or adjust existing loans or investments.

Mohammad Salim Chowdhury, head of the small and medium enterprise and agri-banking division of UCB, was also present at the signing ceremony, along with senior officials from both institutions.