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

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, the 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.

AKM Saiduzzaman, Director of Bangladesh Bank’s Agricultural Credit Department-2, attended the agreement signing ceremony. UCB was represented by Deputy Managing Director Md. Ridwanul Hoque and Head of the SME & Agri Banking Division Mohammad Salim Chowdhury. Senior officials from both institutions were also present.

UCB believes the refinance facility will help increase the flow of finance into the agriculture and rural economy. Easier access to funding can help farmers invest in production, encourage rural entrepreneurship, create jobs and strengthen livelihoods.

The bank also expects the initiative to benefit marginal farmers and rural entrepreneurs by giving them access to financing on comparatively easier terms and at an affordable interest rate.

As a responsible partner in the development of Bangladesh’s agriculture and rural economy, UCB remains committed to supporting initiatives that expand financial access, strengthen rural livelihoods and contribute to sustainable economic growth.