Financial access for farmers; Formal vs. informal (Financial Express)

Financial Express (Bangladesh) published an article stating that scarcity of work coupled with high food prices this year means that farm households are being forced to miss meals which results in reduced diet diversity and diet quality– a shocking scenario for pregnant women and young children’s nutritional needs. Farmers borrowing money from the informal lenders think that process of borrowing from formal banks is complicated. The data from the panel survey also supports this piece of information. IFPRI has conducted the Bangladesh Integrated Household Survey (BIHS) which is a nationally representative three-round panel survey of rural Bangladesh. The survey collected data on rural farm households’ source of obtaining loans during the 12 months prior to survey rounds. The most popular source for obtaining loans for farmers has been informal sources such as relatives and friends and non-government organizations (NGOs). Banks and other financial institutions are lagging quite a bit in this aspect, according to data collected in both 2011/12 and 2018/19.