Tenant Farmers Development Project
Bangladesh Bank offered BRAC a refinancing facility of Taka 500 crore, around USD 75 million, at 5% interest, so that we could offer soft loans to tenant farmers (sharecroppers) with a specially tailored recovery plan. We took the challenge and initiated an innovative project entitled “Borga Chashi Development Project” in October 2009.
Under the project, BRAC is organising up to 40 tenant farmers (men and women) into village organisations and providing them with both credit and information on modern agriculture. Tenant farmers with up to two acres of farm (mostly rented) who have not taken loans from financial institutions are eligible to become members of the village organisation. Each farmer is provided with loans of up to Taka 20,000 (USD 3,000) as working capital for crop farming, depending on the size of the farm and the crop enterprise. The loan bears a flat interest rate of 10 percent per year. One-third of the loan is repaid in 10 equal monthly instalments, while the rest is paid back in two parts during the two major yearly harvests. The farmers meet every month to discuss farming problems with agricultural development specialists hired for the project. If the specialist cannot address the problem, he/she connects the farmer with local level government agricultural extension officials.
The project has a target to reach 300,000 tenant farmers in 150 upazilas over the next three years. By April 2012, the project had organised 2,59,914 tenant farmers into 12,350 village organisations and disbursed about BDT 4700 million to some 1,81,578 borrowers. BRAC plans to continue to scale up this programme through 2012. Around 26 upazila of 7 disaster prone coastal districts (Barguna, Patuakhali, Jhalokathi, Pirojpur, Bagerhat, Khulna & Satkhira ) are included in this project.