A-Card a blessing for northern small farmers

Bank Asia provides agricultural loan at 10pc interest with flexible repayment tenure

Smallholding farmers in some southern districts now can buy agricultural inputs in time and use those in their croplands for better production, thanks to a new type of smart debit card, reports UNB. The card is now being used an alternative to hard cash for farmers in two upazilas of Faridpur and other southern districts to ensure timely supply of the agricultural inputs.
According to sources in the banking and NGO sectors, the smallholding farmers are getting credit facilities from Bank Asia at a 10 percent interest rate with a six-month flexible repayment time through its agent banking outfits. The new smart debit card is named A-Card.
This A-Card credit facility ensures the access of farmers to formal banking services while reducing their dependence on microcredit of NGOs who usually charge around 25 percent interest on a loan with strict weekly repayment obligation. But the A-Card users do not have such weekly payment obligation. Farmers can repay the loan any day before the expiry of the six-month tenure, said an official of USAID Agricultural Extension Support Activity (AESA) project, which has designed and introduced the smart card for farmers through Bank Asia.
Dhaka Ahsania Mission (DAM) in partnership with some other agencies, including CARE and mPower, is implementing the AESA project to provide training to farmers to get better farming techniques.
Under a multiparty contract, Bank Asia launched the A-Card primarily for the beneficiary members of AESA project on a pilot basis in association with local microfinance institutions (MFIs) and mStar-FHI360 project.
Some 500 farmers are using A-Cards under which they get a loan of Tk 10,000-Tk 20,000 for six months. This amount remains deposited with the cardholder’s account which he or she can use anytime to purchase seeds, fertiliser, pesticides and other necessary inputs from outlets of reputed companies.
Rubia Begun, a smallholding female farmer in Faridpur Sardar upazila who received an A-Card, said she is being benefited greatly by using the card as she could purchase seeds, fertiliser, pesticides and other inputs for her cropland in time.
“Unlike previous years, I bought enough quality inputs from a reputed shop which gave me much relief. I don’t need to be worried about timely management of the inputs because of the A-Card facility,” she told UNB.
Rezaul Karim, a farmer from Habili Dayarampur of the same upazila, echoed Rubia.
“With the A-Card, I don’t have to think about cash or credit to buy fertiliser, pesticide or seed. We’ve yielded better production this year as we could use agri-inputs in the right time,” he added.
He, however, demanded ensuring facilities for preservation and marketing of their produces. “With the crisis is now over following the introduction of A-Card, we can get good prices of our products if we can preserve those until the peak season and if there is good marketing facilities,” he said.
Deputy Managing Director of Bank Asia Md Zahirul Alam said their bank provides loan to farmers under the Bangladesh Bank’s ‘Agricultural Loan’ scheme while its agent banking outlet Society Development Committee (SDC), an NGO, distributes cards among the farmers at grassroots level where bank has limited operation.
Bidyuth K Mahalder, chief of party (COP) of AESA project, who invented the concept of such credit facilities, said they went for introducing the A-Card for farmers when they found that smallholding farmers do not have access to enough cash or bank credit when they badly need agricultural inputs to use in their fields during growing season.
“A-Card has created an opportunity for the small farmers to get easy access to bank credit at a lower interest rate with flexible repayment tenure,” he said.
He mentioned that the A-Card’s major benefit is that farmers have always access to finance and they do not need to hurry to pay back their loan through weekly installments which they have to usually do when receive loan from NGOs.
Explaining the arrangement, Mahalder said the A-Card actually has been a coordinated network between commercial bank, agent banking outlets, NGOs, farmers and input sellers where farmers get inputs in time but need not to handle cash to purchase those.
Under the system, a farmer shows the A-Card to a vendor who puts it on his smart mobile phone to debit the money from cardholder’s account. The cardholder immediately receives a notification about the payment in his mobile phone. After the sale, the vendor collects the cash from the agent banking outlet at his convenient time. Under the network, AESA project selects smallholding farmers while m-Power and CARE provide technical support to the A-Card programme as the card is fully based on near field communication (NFC) system, a digital platform, in banking transaction.

 

A-Card a blessing for northern small farmers

Bank Asia provides agricultural loan at 10pc interest with flexible repayment tenure

Smallholding farmers in some southern districts now can buy agricultural inputs in time and use those in their croplands for better production, thanks to a new type of smart debit card, reports UNB. The card is now being used an alternative to hard cash for farmers in two upazilas of Faridpur and other southern districts to ensure timely supply of the agricultural inputs. According to sources in the banking and NGO sectors, the smallholding farmers are getting credit facilities from Bank Asia at a 10 percent interest rate with a six-month flexible repayment time through its agent banking outfits. The new smart debit card is named A-Card. This A-Card credit facility ensures the access of farmers to formal banking services while reducing their dependence on microcredit of NGOs who usually charge around 25 percent interest on a loan with strict weekly repayment obligation. But the A-Card users do not have such weekly payment obligation. Farmers can repay the loan any day before the expiry of the six-month tenure, said an official of USAID Agricultural Extension Support Activity (AESA) project, which has designed and introduced the smart card for farmers through Bank Asia. Dhaka Ahsania Mission (DAM) in partnership with some other agencies, including CARE and mPower, is implementing the AESA project to provide training to farmers to get better farming techniques. Under a multiparty contract, Bank Asia launched the A-Card primarily for the beneficiary members of AESA project on a pilot basis in association with local microfinance institutions (MFIs) and mStar-FHI360 project. Some 500 farmers are using A-Cards under which they get a loan of Tk 10,000-Tk 20,000 for six months. This amount remains deposited with the cardholders account which he or she can use anytime to purchase seeds, fertiliser, pesticides and other necessary inputs from outlets of reputed companies. Rubia Begun, a smallholding female farmer in Faridpur Sardar upazila who received an A-Card, said she is being benefited greatly by using the card as she could purchase seeds, fertiliser, pesticides and other inputs for her cropland in time. Unlike previous years, I bought enough quality inputs from a reputed shop which gave me much relief. I dont need to be worried about timely management of the inputs because of the A-Card facility, she told UNB. Rezaul Karim, a farmer from Habili Dayarampur of the same upazila, echoed Rubia. With the A-Card, I dont have to think about cash or credit to buy fertiliser, pesticide or seed. Weve yielded better production this year as we could use agri-inputs in the right time, he added. He, however, demanded ensuring facilities for preservation and marketing of their produces. With the crisis is now over following the introduction of A-Card, we can get good prices of our products if we can preserve those until the peak season and if there is good marketing facilities, he said. Deputy Managing Director of Bank Asia Md Zahirul Alam said their bank provides loan to farmers under the Bangladesh Banks Agricultural Loan scheme while its agent banking outlet Society Development Committee (SDC), an NGO, distributes cards among the farmers at grassroots level where bank has limited operation. Bidyuth K Mahalder, chief of party (COP) of AESA project, who invented the concept of such credit facilities, said they went for introducing the A-Card for farmers when they found that smallholding farmers do not have access to enough cash or bank credit when they badly need agricultural inputs to use in their fields during growing season. A-Card has created an opportunity for the small farmers to get easy access to bank credit at a lower interest rate with flexible repayment tenure, he said. He mentioned that the A-Cards major benefit is that farmers have always access to finance and they do not need to hurry to pay back their loan through weekly installments which they have to usually do when receive loan from NGOs. Explaining the arrangement, Mahalder said the A-Card actually has been a coordinated network between commercial bank, agent banking outlets, NGOs, farmers and input sellers where farmers get inputs in time but need not to handle cash to purchase those. Under the system, a farmer shows the A-Card to a vendor who puts it on his smart mobile phone to debit the money from cardholders account. The cardholder immediately receives a notification about the payment in his mobile phone. After the sale, the vendor collects the cash from the agent banking outlet at his convenient time. Under the network, AESA project selects smallholding farmers while m-Power and CARE provide technical support to the A-Card programme as the card is fully based on near field communication (NFC) system, a digital platform, in banking transaction.