Marginal and small maize farmers do not usually have the initial investment necessary for maize cultivation. In the absence of any formal source through which the farmers in remote areas can take loans, many farmers are unable to cultivate maize despite having access to quality inputs through contractors. Similarly, even with high profit margins, the contractors cannot expand their contract farming operations and cater to more farmers due to their limited financial resources.
To address these issues, Katalyst is promoting a Dedicated Credit Line (DCL) for the Maize farmers.
Katalyst has already signed separate MoUs with Agrani Bank Ltd. (ABL) and National Bank Ltd. (NBL) in December, 2010, and the development of the financial product has been underway.
To this effect, an Operating Manual (OPM) was singed in a ceremony held among Agrani Bank Ltd. (ABL), Katalyst and Winrock International at ABL office on 11 April, 2011. Mr. Syed Abdul Hamid, Managing Director of ABL and also the chief guest of the event, on behalf of the banking community lauded the efforts of Katalyst. He also mentioned that ABL will extend its utmost assistance to ensure the success of the DCL.
The DCL will create a sustainable access to finance whereby more contractors will be able to engage small and marginal farmers in maize cultivation. Once the pilot phase of the DCL is successfully completed, ABL will adopt the financial model and replicate it in other ABL branches throughout Bangladesh.