Background of Small and Marginal Sized Farmers Agricultural Productivity Improvement and Diversification Financing Project (SMAP)

The Government of the People’s Republic of Bangladesh (GOB) has placed agriculture sector as a pillar for achieving growth of income, poverty reduction and food security, and is working to extend finance for higher productivity and Diversification of agriculture. However, access to agriculture finance and technical support services for modernization of agriculture and improvement of productivity are still lacking among the small and marginal sized farmers. With the aim of providing credit support and technical support (agriculture/livestock) to SMFs, Japan International Cooperation Agency (JICA) has approved a loan fund (Official Development Aid Loan) of Japanese Yen 9930 million to Government of Bangladesh (GOB) under ‘Small and Marginal Sized Farmers Agricultural Productivity Improvement and Diversification Financing Project’ (Loan No. BD-P7. dated June 16, 2014). Gram Unnayan Karma (GUK) successfully fulfilled all the eligibility criteria through a selection procedure and already selected as a partner of Bangladesh Bank to avail the On-Lending Loan. By this time GUK received BDT. 36.68 crore as short term and mid term.

The objective of the Project is to increase agricultural Productivity and Diversification of the small and marginal sized farmers of Bangladesh by finan

cing agricultural loans and providing agricultural training services to farmers through Microfinance Institutions, thereby contributing to the sound development of agricultural finance and the agricultural sector of Bangladesh.

Type of Loan:
Short-term Loan: The repayment frequency of each drawdown (OLL) will be once within 1 year from the date of disbursement.

Mid-term Loan: The repayment frequency of installments of each drawdown (OLL) will be six-monthly basis and repayment of entire amount of drawdown will be within maximum 2 years from the date of disbursement.

Beneficiaries Selection Criteria :
The SMFs having 0.494 acres to 2.47 acres as well as landless farmers with less than 0.494 acres of land throughout the country having the National identity card are eligible for the application of loan.

Project activities:
Agriculture Loans to improve the crop productivity and diversification through investing in the fertilizer, pesticide, and seed (Such as high yield variety, hybrid and high value crop) rental fee of Irrigation pump, other machineries and land.

Argo-Machineries Loan to increase the agricultural productivity through scientific technologies to procure the equipment used in tilling irrigation, harvesting, weeding such as irrigation pump, tractor, power tiller etc.

Livestock Loans to increase the production of beef fattening, poultry, duck, goat, sheep rearing dairy etc.

Ceiling of Loan:
Sub-loan sizes to qualified SMFs will range from TK. 5000/- to TK. 200,000/-Gram Unnayan Karma (GUK) will determine this size of the Sub-loan maintaining this range.

Duration of Loan:
The tenure of sub-loan is 3 months to 2 years depending on the types of Sub-loan, Short term (12 months or less) shall have a grace period of 1 month and Mid-term loans exceeding 1 year up to 2 years shall have a grace period of 3-6 months subject to the lending policy of Gram Unnayan Karma (GUK). The repaying term would not be more frequent than monthly repayment.

Information of SMAP
As of May-2016

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