Katalyst and Winrock International signed MoUs with National Bank Limited and Agrani Bank Limited to promote a Dedicated Credit Line (DCL) for the maize contractors and farmers. The ceremony was held at Hotel Purbani International on Thursday, 2 December 2010.
Although maize is a high-value cash crop, unfortunately the marginalized and small farmers do not have access to quality inputs, technical know-how and high initial investment required for maize production. To resolve these issues, contract farming has been initially introduced in chars adjacent to Rangpur and Bogra regions.
However, in order to scale up the contract farming model, contractors need access to finance to provide the initial investment requirement for maize farmers.
The DCL has been created which would build a sustainable access to finance, whereby more contractors will be able to engage small and marginal farmers in maize production. This approach has potential to reach even female farmers with credit support form microfinance and other financial institutions.
The Honorable Governor of Bangladesh Bank Mr. Atiur Rahman was present in the event as the chief guest. The MoUs were signed by AKM Shafiqur Rahman, Deputy Managing Director, National Bank Limited, Mr. Omar Farooqe, General Manager, Agrani Bank Limited, Mr. Goetz Ebbecke, General Manager, Katalyst, S.N. Choudhury, Project Coordinator, REAP Project, Winrock International on behalf of their respective organizations.
The governor of the Central Bank Dr. Atiur Rahman said that “The scheme has the potential to reduce import of maize, ensure fair price for agro products, provide economic security to farmers of those areas and also provide the banks with a new profitable loan product. If successful, this initiative could revive the rural economy and alleviate poverty”.
Addressing the ceremony, General Manager of Katalyst Mr. Goetz Ebbecke mentioned that, “Finance has been a major issue in almost every agricultural activity. Rural development can be enhanced if farmers and SMEs can avail timely and convenient financial services for their businesses. On that regard, the Dedicated Credit Line for maize contractors and farmers is an innovative and timely step, and will help the maize farmers and contractors to expand their businesses.” Each of the speaker emphasized on spreading the service accross the country after implementation of a successful pilot.