Introduction

1.1 Origin of the Report:

Any institution that accepts deposits of money from public, for the purpose of lending or investment, repays on demand or transfers by checks, draft orders & other means is called a bank. One of the important roles of banking is to deal with transaction of money from surplus unit to deficit units. Banks in all countries work as the repository of money. Bank represents a highly significant and influential sector of business worldwide. Bangladesh Krishi Bank (BKB) has been established under the Bangladesh Krishi Bank order 1973 (President's Order No 27 of 1973). BKB is a Banking Company under the Banking Company Act-1991. It is the successor to the former Agricultural Development Bank of Pakistan which was established in 1961 through merging the Agricultural Development Finance Corporation (established 1952) and the Agricultural Bank of Pakistan (established 1957) into one institution. It is to be noted that Bangladesh Krishi Bank (BKB) is a 100% government owned specialized Bank in Bangladesh. Since its inception, BKB is financing in agricultural sector remarkably. BKB also performs commercial banking. People working abroad can easily send money home through our Taka Drawing Arrangement. Internship program is very much essential for any business school student for handling the real business situation. I am a student of Business Administration of BBA program and prefer to prepare a report on banking sector rather than other financial institution. This internship report is a part of my BBA program that is performed by me as a student of Dhaka University, Department of Management Studies. In a formal way, I select the banking sector and my supervisor offered me to prepare the report on title as Agribusiness Finance of Bangladesh Krishi Bank.

1.2 Objectives of the Study

Primary Objective:
The general objective of this study is to explore Agribusiness Finance of Bangladesh Krishi Bank.

The Specific Objectives are:

To analyze crop, fisheries and livestock loan. To ascertain agro equipment loan. To analyze agro-based industrial project loan. To recommend some policies for growth and development of the bank by contributing agribusiness.

1.3 Scope of the Report:

The report covers the organizational structure, background, functions, and the performance of Bangladesh Krishi Bank in area of agribusiness. Scope of the study can be described in two ways: Organizational Scope: I worked on some important departments of Bangladesh Krishi Bank, karwan Bazar Corporate Branch and Credit & Advance unit in Head Office. I have got my all efforts in key result areas. Periodical Scope: Practical orientation in the bank has started from 31st December, 2012 and continued up to 15th February, 2013. The total duration of the program was forty five days.

1.4 Limitation of the Study:

During the course of practical training one of the major limitations I faced was communication with the department and the officers because of their busyness. Another crucial limitation is time constraint. As I was posted in the Karwan Bazar Corporate Branch, so it is difficult for me to collect all the organizational structure and other necessary information to know the entire related document.

I have faced some problems, which might be termed as the limitation of the study. The problems which I faced are as follows: Time Limitation: The time for the study was short to make and indepth report.

Non availability of adequate data: It was very tough to collect data for making a comparative study on agribusiness financing because banks recording system was poor. So I
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was not able to gather the banks data for preparing a more in depth presentation. Business of the administration: Since the bank personnel of the Bangladesh Krishi Bank (BKB) are very busy, in some case I could not communicate with them properly where I required and they also could not help me. The administration was afraid to disclose the organizational information. It was also constraint for the study. Experience makes a man efficient. I am not experienced enough to complete the study because I am a person of new hand on such study. That is why inexperience creates obstacles to follow the systematic approach and logical research methodology. Sufficient books, Publications, Facts and Figures are not available. These constrict narrowed the scope of accurate analysis.

Fears to disclosure:

Lack of experience:

Lack of records:

Agribusiness 2.1 Origin of Agribusiness:

Harvard is where the term agribusiness was first elaborated, in 1957, by Profs. John Davis and Ray Goldberg, in the book A Concept of Agribusiness. The concept had an attempt to bring more integration, considering agriculture an activity strongly linked with suppliers of inputs, service providers, processing industry, distribution systems, financial institutions and consumers. Further on, in 1968, a new publication having Prof. Ray Goldberg as author, emerged. This second book brought the concept of agribusiness systems. The difference here is that an agribusiness system considers the flow of one product over an interactive system or food chain.

2.2 Agribusiness:
Bangladesh is primarily an agrarian economy. About 80 percent of the total population lives in rural areas, and 62 percent of them are directly, and others are indirectly engaged in a wide range of agricultural activities. The agricultural sector contributes around 29 percent of the country's Gross Domestic Product (GDP) and generates employment for 63 percent of the total labor force. Agribusiness is doing business with agricultural produce. Agribusiness is the off link in agro food value chains. Its provided inputs to the farm sectors and it links the sector to consumers through the handling, processing, transportation, marketing and distribution of food and other agricultural products. Agribusiness refers to the businesses collectively associated with the production, processing, and distribution of agricultural products. An industry engaged in the producing operations of a farm, the manufacture and distribution of farm equipment and supplies, and the processing, storage, and distribution of farm commodities is termed as agribusiness. It is clearly evident that agriculture has evolved in to agribusiness and has become a vast and complex system that reaches for beyond the farm to include all those who are involved in bringing food and fiber to consumers. Agribusiness include not only those that farm the land but also the people and firms that provide the inputs (for ex. Seed, chemicals, credit etc.), process the output (for ex. Milk, grain, meat etc.), manufacture the food products (for ex. icc cream, bread, breakfast cereals etc.), and transport and sell the food products to consumers. Agribusiness would involve all possible agricultural sectors like Business service
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Crops Livestock Poultry Fisheries Agro Forestry Agro processing Agro-inputs Agricultural Education

2.3 Agro-products and services:

Meat, milk and milk products: In recent year Livestock sectors give vast opportunity for producing meat, milk and milk products. There are many organizations in Bangladesh like Milk vita, Aftab Group, Arong Group are involved in this kinds of agribusinesses and earning a great profit which contributes in our GDP. Bengal Meat Company in Pabna is involved in meat processing programme and they are doing monopoly business in Bangladesh. Poultry products: Now a day in Bangladesh poultry business is widely done which is one kind of agribusiness. Poultry farms are widely established for this kind of profitable business especially in savar areas and throughout the country. Fish products: On the other hand fish processing industries are growing well. Processing fish are exportable like Shrimp, Hilsa, Tela pia, Rui, Mrigel etc. in other country by meeting our demands which contribute in our GDP growth. Fish products are also important agribusiness sectors. Vegetable products: Many companies are doing business with vegetables like- potato, onion, cabbage, cauliflower, reddish, green chili, carrot, pumpkin, basil, garlic, green banana, bean, arum, tomato, brinjal, bottle gourd etc. Poultry and other equipment business: In recent years poultry equipment demand is increasing because of the popularity of poultry business. Agro industrial Trust, Iqbal Brother, and Riaz Uddin co. are the poultry suppliers groups of Bangladesh. Some others companies are also doing business Like Fishing net, twine and equipments.

Tannery Business: Tannery industry is one of the most important agribusiness sectors. There are about 240 industries in Bangladesh. These tanneries are earning huge amount of foreign currencies by doing export.

Mushroom production and sales business: Mushroom production for domestic consumption and export can be enhanced with improvement in the state of art of their production and also a important agribusiness sector. Already many companies are producing and sale in the domestic market with high price. Fruit business: Fruit business (like mango, banana, pineapple, jack fruit, etc.) would be a most profitable agribusiness in Bangladesh. Many companies like Pran group, Square Group and ACI group are doing business by processing (juice, chips etc) those kinds of fruits and supply all year round and contribute in our GDP growth. Seed business: Seed business in Bangladesh is important agro based business. At present seeds are supplied by different organization (like BADC, BARI etc.) and some other private organizations. Feed, fodder, and bio-fertilizer business: As agricultural country there is increasing demand of agricultural inputs like feed, fodder, and bio-fertilizer. For meeting the demand almost some of public and private companies are doing this business. Flowers business: Flowers business is one kind of agribusiness sector of Bangladesh. There are lots of wholesale and retail markets (Kharmar Bari and Shahabag) of flowers. Many people are engaged in it and earning huge money. Bio-pesticides and bio-control business: As an agricultural based country there is a lot of demand of Bio-pesticides and bio-control agents to prevent the crop from pests. On the basis of this demand many companies have been doing Bio-pesticides and bio-control business. Apiculture business: Apiculture is another kind of agribusiness. Many companies are engaged in apiculture business and producing honey and distributing through the country.

Agricultural Education sector: Already some public and private universities have started to provide degree in Agribusiness. Recently a national foundation named "National Agribusiness foundation of Bangladesh (NAFB)" has emerged in Bangladesh with a highly motivated people. Besides mentioned above, there are some more agro-products and services these are as follows: Bamboo & Rattan Products Flavors & Aromatics Sea Food Tobacco & Tobacco Products Coir Products Irrigation Equipment Tea & Coffee Rice/ Wheat/ Pulses/ Other Food Jute & Jute Products Edible Oil & Oil Products

2.4 Benefits of agribusiness:

Bangladesh is an agricultural country. Demand-driven agribusiness activities are critically important to Bangladesh economy. Agribusiness accounts for about 10% of the countrys gross domestic product (GDP), according to estimates. Because the market demand is income-elastic the growth of agribusiness is much higher than the growth of agricultural production. Employment opportunities: Agribusiness creates innumerable employment opportunities for the people of our country. About 84% of the total population lives in rural areas and are directly or indirectly engaged in a wide range of agricultural activities. Source of income: most of the people of our country are engaged in agribusinesses in our country. They earn their livelihoods and support their families and also contribute to the national income of the country. Alleviation of poverty: In our country many people live under poverty line. By doing and engaging in agribusiness they can eradicate poverty and enhance their life style. Proper utilization of natural resources: Bangladesh deserves huge natural resources. People can assure the best utilization of natural resources with efficient management through agribusiness.

Human resource development: Education in agriculture plays an important role in preparing farmers, researchers, educators, extension staff and all other agricultural and agribusiness stakeholder to make productive contributions. Huge supply of raw materials: The abundance of natural resources available in Bangladesh supports a range of highly profitable investment opportunities in agribusiness. Smooth supply of raw materials promotes the agribusiness growth and development. Emergence of food processing industries: Food processing enterprises are rapidly emerging due to the availability of agricultural raw materials and cheap labor to meet the rapidly growing
local demand.

Infrastructure development: To promote, enhance and sustain growth in agribusiness infrastructure is being developed. Through the developed infrastructure people can earn huge revenues by doing agribusiness. In addition to the above amenities agribusiness offers the following: Government and NGOs conduct regular training programs to develop skilled manpower in the industry. Wide range of biodiversity exists for different crops. Agricultural commodities have a comparatively higher value added than non-agricultural commodities. Increased cultivation of vegetables, spices and tropical fruits now grown in Bangladesh may help to attain food security and self-sufficiency. Agribusiness is low capital business.

2.5 Problems of agribusiness:

Bangladesh has an agriculture-dependent economy with a growing population and one of the world's lowest land areas per capita. A large number of shortcomings as well as challenge are seen in agribusiness. Loss of arable land: About 100000 ha productive agricultural land is lost per year through nonagricultural use i.e. roads, housing, other development projects. Major factors responsible for land loss are urbanization, human settlement, building of infrastructure, and river erosion. The loss indeed is very alarming. These productive lands are often occupied by the influentials who normally belong to political parties and administration.

Population growth: Bangladesh is an over-populated country. Day by day population is being increased. They are using arable land for their housing thus they hinder the prospects of agribusiness. Global warming & climate change: Significant changes occur in the climatological pattern of the country. The frequency of natural calamities like flood, cyclone, drought etc have becomes erratic. All these have profound influence on crop production in the country. Lack of quality seeds: Adulterated seeds cannot grow fresh and mature agro- products. That is why people may not draw customers and thus may lose their business. Inadequate credit support to farmers: About 90% farmers of Bangladesh are small and marginal. They are very often constrained by finance and thus cannot afford high cost for management. They have very limited access to institutional credit because of collateral requirement. Unfair price of agricultural produces: Productive farmers of Bangladesh mainly belong to small and marginal categories. These farmers do not have either Farmers Association or Farmers Co-operative to bargain for fair prices of their produces. They are thus forced to sell their produces at low prices to intermediaries. Poor marketing system: The marketing system of agribusiness is not well-developed. Many aspects of marketing are ignored. Many times business faces distribution problems to meet local and international demands. Insufficient investment in research: investment in agribusiness research is not sufficient. Therefore more and more innovative ideas are not generated to operate agribusiness in a profitable way. Lack of quality machines: People doing agribusiness cannot adopt improved machines due to their financial shortage. Hence they cannot process food in a smooth manner and supply in time.

Besides the mentioned above there are additional drawbacks of agribusiness. Poor government support Lack of friendly policies Poor public-private partnership Lack of skillful entrepreneurs Tariff difference on machines and spare parts Imbalanced use of fertilizers
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Methodology of the study

Methodology is the vital part of a research design. It is also heart of any report. It includes data collection method, study area method of data analysis etc. This chapter presents the qualitative methodology that has been followed to conduct this report. The following methodology has been followed for the study-

3.1 Sources of Data:

In order to prepare this report all information have been gathered both from primary and secondary sources. These are: Primary sources: Personal interview with the Managers and staff of the branch. Observation from different departments of the branch. Questionnaire. Secondary sources: Annual report. Files and documents provided by the concerned Managers. Website of the Bank. Website of Ministry of Agriculture.

3.2 Population:
Bangladesh Krishi Bank arranged several workshops for creating awareness among workers about agricultural sector in Bangladesh. About 50 officers from different branches attended this workshop. My study population was all officers who participated on the workshop and all officers of agribusiness finance unit.

3.3 Sample size:

Sample design is a definite plan for obtaining a sample from a given population. I have completed my internship program within a limited time and scope. That is why the size of sample I have determined and used is not so large but it is reliable to find out the real fact of my study. I have selected 20 officers as my sample area for collection of information about agribusiness finance.
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3.4 Sample Technique:

This is not possible to collect interview from all of officers for time limitation and their busyness. So I have purposively selected the sample size for obtaining sufficient and reliable information about agribusiness finance.

3.5 Data Analysis Tool:

The collected data have been analyzed by personal computer following a planned analysis strategy. This plan has largely followed the objectives of the survey. The tools I have applied to prepare this report are as follows Percentage Regression line

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Organizational profile
4.1 History of the Bank:
Bangladesh Krishi Bank (BKB) has been established under the Bangladesh Krishi Bank order 1973 (President's Order No 27 of 1973). BKB is Banking Company under the Banking Company Act-1991. It is the successor to the former Agricultural Development Bank of Pakistan which was established in 1961 through merging the Agricultural Development Finance Corporation (established 1952) and the Agricultural Bank of Pakistan (established 1957) into one institution. Initially the authorized capital of the bank was tk. 500 million and its paid up capital was tk. 370 million, subscribed fully by the Govt. BKB was issued authorized dealership license in 1981 by the Bangladesh for dealing in foreign exchange. In the same year, BKB set up an International Department at its head office. Since then BKB has been participating actively in the foreign exchange business and offering overseas remittance services through its 11 authorized branches for dealing in foreign exchange. It is to be noted that the Bank started commercial functioning since 1977 to generate more loanable fund from the idle rural and urban savings and invest them for the betterment of our economy. It is clear that Bangladesh Krishi Bank (BKB) is a 100% government owned specialized Bank in Bangladesh. Since its inception, BKB is financing in agricultural sector remarkably. BKB also performs commercial banking. People working abroad can easily send money home through our Taka Drawing Arrangement.

4.2 Objectives of the Bank:

The objectives of the BKB (Bangladesh Krishi Bank) are unique in blending agricultural financing and commercial banking. The objectives are: To provide credit facilities to the farmers for the development of agriculture. To assist credit facilities to the entrepreneurs engaged in development of ago-based and cottage industries. To generate more loanable fund from the idle rural and urban savings and invest them for the betterment of our economy. To undertake various programs to alleviate poverty. To search for newer avenues for investment and develop new product to suit such needs. To aid people affected by natural calamities. To make optimum utilization of rural resources.
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To engage inactive human resources of the rural areas in productive/economic activities. To engage rural people in development process of the country. To eliminate exploitation done by the money lenders. To empower the rural women to establish their own rights. To improve the living standard of the rural people.

4.3 Mission of the Bank:

The mission of BKB is Development of agriculture and farmers.

4.4 Vision of the Bank:

BKB has a 5-year action plan which is emphasized on profit making. It has made a comprehensive action plan with a view to maximizing and minimizing costs as stated in the plan framed with the followings: Next 5 years disbursement plan designed for crop production, fishery, livestock and agricultural equipment. Special emphasis given on financing to the alternative import goods. Agro-based project financing to be given preferences. SME, agro-based linkage program, financing for seed preservation& micro credit linkage program with NGO be encouraged. Classified loan to be reduced up to 20% against total loan. Low cost deposits to be encouraged. Top 20 defaulters to be under legal proceeding. Exchange income to be earned through ancillary business. In every year 5 branches to be opened for accelerating import export business. About 220 branches would be under computerization network.

4.5 Capital Position: Authorized capital Paid up capital

Tk. 15,000 Million (Taka Fifteen thousand Million) Tk. 9,000 Million (Taka Nine thousand Million)

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4.6 Functions of Bank

The Bank Offers: Various credit programs like crop loan, fisheries loan, livestock loan, irrigation equipment loan etc. Foreign exchange services. Various deposit schemes. Purchase & sale of various Govt. securities and prize bonds. Remittance of fund throughout the country and abroad. Payment or receipt of utility bills on behalf of customers. Services on behalf of government. Technical support to agro-based and cottage industries. Micro credit to the poor people of the country.

In order to perform the above tasks, BKB works closely with its clients, the regulatory authorities, the shareholders (GOB), banks and other financial institutions.

4.7 Management hierarchy:

Bangladesh Krishi Bank (BKB) is a state-owned banking institution. The Bank has a Board of Directors comprising of 11 members. The Board is headed by the Chairman. The Board Chairman is generally an experienced professional/ex-professional who has wide acceptability and rapport. The Board of Directors is appointed by the Government. The Board of Directors frames and formulates policies that will be executed by the Managing Director. The Directors represent both public and private sectors and are appointed by the Government. The Managing Director is the Chief Executive of the Bank. He is appointed by the Government. The Bank has two posts of Deputy Managing Directors and they are appointed by the Government. The Bank has 14 posts of General Managers. They are also appointed by the Government.

There is a three-member Executive Committee composed of the Chairman, the Managing Director and a Director. This Committee deals with any matter within the competence of the Board of Directors.

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4.8 Organogram of the Bank:

Source: BK B Websi te

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4.9 Product and Services:

The products and services of BKB that are currently available are given below.

Depository products:
Name of Account Period Rate of Interest

Current Deposit Account

---

0.00% --

Special Notice Account

Deposit

(SND)

---

(a) For less than 100.00 Crore (b) For 100.00 Crore and above Savings Bank Account

---------

4.00% 5.00% Urban 5.00% Rural 7.00% 11.00% 11.50% 12.00% 12.50% 10 yrs 20 yrs 15.00% 15.00% 10.00% 12.00% 6.50% 9.00% 0.00% 6.00% 1.00% Higher than Savings Rate 5.00% 5.50% 6.00% 6.50% 7.00% 7.25%

Fixed Deposit Account

Receipt

(FDR) From 3(three) months and above but less than 6(six) months From 6(six) months and above but less than 1(one) year 1(one) year and above but less than 2(two) years 2(two) years and above Maximum 3(three) years

Time Deposits (BKB own products)

* Deposit Pension Scheme

* Savings Pension Scheme

5 yrs 10 yrs

Teachers Savings Scheme BKB Savings Scheme ** Hajj Deposit Scheme Small Savings Scheme Krishan-Krishani Deposit Scheme Education Savings Scheme Monthly Contributory Deposit

5 yrs 7yrs 1-12 yrs 5 yrs --5 yrs 7 yrs 10 yrs

Monthly Benefit Deposit

7 yrs 10 yrs 15 yrs

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* Information is furnished for existing customers who opened their DPS account before 1994 and SPS Account before 2001-02 respectively. Opening opportunity of both the accounts had already been discontinued. ** Bangladesh Krishi Bank shall bear source tax/excise duties against Hajj Deposit Scheme Account on behalf of the individual depositor.

Loan products:
The BKB is offering the following loan and advance product to the client for financing different purpose that fulfill the requirements of the bank and have good return to the investment as well as satisfy the client. The loan and advance products are as the following:

Loan Products 1. Crop loan 2. Fisheri es loan 3. Live stock loan 4. Farm and irri gation equipm ent loan 5. Im port Financing 6. Export Financing 7. SME Financing 8. Micro credit (small l oan) 9. Continuous loan(Working capital & cash credit ) 10.Corporat e financi ng

New Product and Services :

The bank has its concentration for new product and developed service for satisfying its customer and increasing its customer base. They prefer now faster service with least cost. For delivering

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faster service the bank is introducing online banking service which is under process. There are other new products and services that Bangladesh Krishi Bank has lately introduced. They are: L/C Delivery Services SWIFT services

4.10 Present Programs of the Bank:

Bangladesh Krishi Bank was developed with the objective of strengthening rural economy by extending credit support to agricultural and agro-based sectors. In consideration of the importance of Micro-Credit and with the objective of generating employment as well as encouraging social development BKB has undertaken several Micro-Credit programs of its own and also in collaboration with local and foreign agencies. The programs have been designed to cover all segments of poor population whether skilled or unskilled such as small and marginal farmers, landless laborers, destitute women, disabled, unemployed youth and rural artisans etc. Credit program for the landless and Marginal Farmers Beef fattening Joint Program Swanirvar Credit Program Small Farmers & landless Labourers Development Project (SFDP) South Asia Poverty Alleviation Program BKB-NGO Micro Credit Program Credit Under National Poverty Alleviation Program through Goat Rearing Milching Cow Credit Program for the Women Special Micro Credit Program for the Disabled Monipuri Small Traders Credit Program Special Credit Program for the Rakhains under the district of Cox`s Bazar Tree Plantation Programs Establishment of Breeding Farm of Black Bengal Goat Program Community Based Resource Management Project Poverty Alleviation through Production and Improvement of Sheep

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4.11 BKB Office Statistics:

Office Type Divisional Office Divisional Audit Office Chief Regional Office Regional Office Branch Office Total Number 09 09 29 24 997

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Analysis & Findings

5.1 The crop, fisheries and livestock loan: Crop loan:
Out of total annual allocation of Loan portfolio, 60% is earmarked for Crop financing. The Credit program covers all the seasonal crops produced in the country. The loan is disbursed as per norms set by the Bangladesh Bank. The rate of interest for this sector is 10%. The rate of interest may however, vary from time to time. Both the landowner and sharecroppers are normally the target group for this loan. Marginal farmers are also eligible for the loan.

Crop loan is sanctioned on annual basis. Credit passbook is issued to each borrower. Loan Disbursement in Crop Sector (Tk. In crore)
Year 2010-11 2011-12 Target 2300 2600 Disbursement 2072.58 2327.95 Percentage 90% 90%

Source: Dept. of Branch Control and Business Development, Head Office, BKB

3000 2500 2000 Target 1500 1000 500 0 2010-11 2011-12 Disbursement

Figure: Loan disbursed against the target in the year of 2010-11 and 2011-12
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In the figure, horizontal axis denotes Year while Tk. In Crore is shown in the vertical axis.

Fisheries loan:
To accelerate fish production BKB provides loan for excavation and re-excavation of ponds, development of marshy lands, establishment of fish hatcheries and new fisheries projects. The Loans are given in the following sub sectors: White Fish

Fish culture in existing pond/tank Fish culture by re-excavation of old/derelict tank/tank Fish culture by excavation of new tank/tank

Shrimp culture (Marine, Brackish water and sweet water Culture)

Shrimp culture in traditional system (Bagda or Tiger Shrimp) Shrimp culture in scientific system Shrimp culture in semi-intensive method Prawn culture in sweet water (Galda)

This loan is given mainly in coastal areas for developed technology based shrimp culture. Fish & Shrimp hatchery (fingerlings production)

Fingerlings production in sweet water Shrimp fingerlings production (fingerlings of commercially profitable technology) Loan Disbursement in Fisheries Sector (Tk. In crore)
Year 2010-11 2011-12 Target 420 500 Disbursement 370.85 422.53 percentage 88% 85%

Source: Dept. of Branch Control and Business Development, Head Office, BKB

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600 500 400 300 200 100 0 2010-11 2011-12 Target Disbursement

Figure: Loan disbursed against the target in the year of 2010-11 and 2011-12 In the figure, while Tk. In Crore is shown in the vertical axis; horizontal axis denotes Year.

Livestock loan:
Live stock sector plays an important role in the development of agriculture. BKB provides loan for Bullock, Milch Cow, Goatery, Beef fattening and other draft animals. It is basically Medium Term Loan. Beef Fattening Program:

Create self-employment opportunity for poor and un-employed people. Meet national deficit of animal protein. Bring positive change in the attitude of the people through training. Ensure participation of bank officials in the program and increase their sense of duty and

consciousness.
Main Aspects:

Purely supervised credit. The bank officials giving guarantee are responsible for recovery of loan. Each borrower will get maximum Tk. 25,000/-for 5 calves ( each Tk. 5,000/-) Loan is collateral free. Repayable within one year.
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Loan Disbursement in Livestock Sector (Tk. In crore)

Year 2010-11 2011-12 Target 420 470 Disbursement 307.72 327.23 percentage 73% 70%

Source: Dept. of Branch Control and Business Development, Head Office, BKB

500 450 400 350 300 250 200 150 100 50 0 2010-11 2011-12

Target Disbursement

Figure: Loan disbursed against target in the year of 2010-11 and 2011-12 In the figure, horizontal axis and vertical axis denote Year & Tk. In Crore respectively.

Findings:
Here it is found that BKB disbursed Tk. 2072.58 crores against the target of Tk. 2300 crores in the year of 2010-2011 which was 90% in the crop sector. In the following year disbursement target was Tk. 2600 crores and actual disbursement was Tk. 2327.95 crores that was 90% of the target. So the performance of the bank was the same in the crop sector between these two years. From the table and figure it is also apparent that BKBs targets in the fisheries sector were Tk. 420.00 crores and Tk. 500 crores in the year of 2010-11 and 2011-12 respectively. Actual disbursements in these respective two years were Tk. 370.85 crores and Tk. 422.53 crores. In
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other words the actual disbursement in the year of 2010-11 was 88% against the target. But 85% out of the target was found as actual disbursement in the next year. So it can be concluded that BKBs performance was almost the same in this sector. Here it is also seen that in the livestock sector the targets of BKB were Tk. 420.00 crores and Tk. 470 crores in the year of 2010-11 and 2011-12 respectively. Actual disbursements were Tk. 307.72 crores and Tk. 327.23 crores in these respective two years. In other words the actual disbursement in the year of 2010-11 was 73% against the target. But 70% against the target was found as actual disbursement in the next year. So at this point it can be said that BKBs contribution decreased to a little extent in this sector.

5.2 Ascertainment of agro equipment and farm machinery loan:

With the Changing scenario the traditional agricultural system is being replaced by mechanized one. In order to meet up the changing demand of this sector, BKB offers credit facilities both for production and marketing of different agricultural equipment and farm machinery including irrigation equipment. All sorts of irrigation equipments are eligible under the sector.

Loan Disbursement in Agro equipment Sector (Tk. In crore)

Year 2010-11 2011-12 Target 55 60 Disbursement 37.73 32.45 percentage 69% 54%

Source: Dept. of Branch Control and Business Development, Head Office, BKB

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70 60 50 40 Target 30 20 10 0 2010-11 2011-12 Disburesment

Figure: Loan disbursed against the target in the year of 2010-11 and 2011-12 In the figure, while Tk. In Crore is shown in the vertical axis; horizontal axis denotes Year.

Findings:
From the table and figure mentioned above it can be found that in the agro equipment and farm machinery sector the actual disbursement of BKB was Tk. 37.73 crores against the disbursement target that is Tk. 55 crores in the year of 2010-11. But out of disbursement target (Tk. 60 crores) the actual disbursement was Tk. 32.45 crores in the year of 2011-12. In other words the actual disbursements were 69% and 54% out respectively in the year of 2010-11 and 2011-12. In this regard the performance of BKB lowered proportionately in the year of 2011-12 compared with the year of 2010-11.

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5.3 The agro-based industrial project loan:

As an agricultural country different types of crops and fruits are produced here. Moreover recently sectors like poultry, dairy, fisheries have flourished enormously. There is enough scope for export of these items through processing mechanism and value addition. The agro based industries are Poultry farm, Dairy farm, Food processing plant, Fish freezing/Processing Industries etc. Reputed local businessmen and prospective foreign investors are highly acceptable and encourage to the bank for establishment of any sorts of agro-processing industries in Bangladesh. Project under joint venture as well as direct foreign investors are specially taken care of.

Poultry farm

Poultry broiler farm Poultry layer farm Poultry (broiler/layer) hatchery Poultry farm related/dependent project

Dairy farm

Milk production Milk collection, milk processing (ghee, butter, pasteurized milk etc production) and marketing

Food processing project

Fruit based food preparation, processing, preservation & marketing Flour, bread & biscuit vermicelli, noodles, chips, chanachur, corn flakes, potato flakes, French fry, popcorn, baby food, starch etc.

Loan Disbursement in Agro-based Industrial Project (Tk. In crore)

Year 2010-11 2011-12 Target 200 400 Disbursement 331.85 613.48 percentage 166% 153%

Source: Dept. of Branch Control and Business Development, Head Office, BKB

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700 600 500

400 300
200 100 0 2010-11 2011-12

Target Disbursement

Figure: Loan disbursed against the target in the year of 2010-11 and 2011-12 In the figure, horizontal axis and vertical axis denote Year & Tk. In Crore respectively.

Findings:
It is apparent from the table and figure that the performance of BKB was excellent in the Agro-based Industrial Project. In order to meet customer requirements various agro Industries are emerging. Most of the cases BKB provide financial supports to these projects profoundly. BKB disbursed Tk. 331.85 crores from the target of Tk. 200 crores in the year of 2010-2011 which was 166% in the Agro-based Industrial Project. In the following year disbursement target was Tk. 400 crores and actual disbursement was Tk. 613.48 crores that was 153% against the target.

In addition to the above the bank is providing continuous loan for different types of activities as cash credit/working capital loan on short term basis. Continuous loan is given for processing, preservation and marketing of agricultural products.

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Conclusion & Recommendations

6.1 Conclusion:
It is well- known that "Development of Agriculture is the development of Bangladesh". Without industrialization economic development of the country cannot be accelerated. In the process of industrialization, agribusiness is a necessity and demand of time. Agribusiness is doing business with agricultural produce. Bangladesh Krishi Bank was established with the objective of strengthening rural economy by extending credit support to agricultural and agro-based sectors. BKB has undertaken several Micro-credit programs of its own and also in collaboration with local and foreign agencies. The programs have been designed to cover all segments of poor population whether skilled or unskilled such as small and marginal farmers, landless laborers, destitute women, disabled, unemployed youth and rural artisans etc. As the premier financial institution BKB finances Crop, Fisheries & Livestock sector. They also support Agro-equipment & farm machineries and also provide continuous loan with the changing scenario for making Bangladesh into industrially developed. BKB has been also financing Agro-based project/industry. In this sector the performance of the bank is flourishing to the greater extent. So in conclusion it can be said that Bangladesh Krishi Bank sufficiently assists and supports the agribusiness for the growth and development of the countrys economy.

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6.2 Recommendations for Agribusiness Finance:

Here are some policies for growth and development of the bank by contributing agribusiness. BKB should give emphasis on improving the credit management system with a view to get better yields from the investment. They should provide financial assistance to more viable agro projects. Project appraisal staffs should be well trained and motivated. The bank should monitor closely and evaluate the existing agri primary products that to be used as raw materials of agro-based industries on category basis. They should emphasize those entrepreneurs who have past business experiences, good family background, educational qualifications, training, managerial and technical competences etc. They should provide special care to fresh entrepreneurs with financial support, training and other development programs. They should take stern actions against loan defaulters. They should ensure the optimum use of the finance provided to entrepreneurs and farmers. Agricultural loans should be adequately diversified for the growth and development of the bank. The bank should design a long term entrepreneurship development plan with a view to ensure development of entrepreneur class. They should choose their branches in place, where they can ensure to meet financial needs of the farmers. They should come forward to expand the Govt. support to the development of the agricultural sector.

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6.3 References
Annual Report, 2011-12, Bangladesh Krishi Bank. Annual Report, 2010-11, Bangladesh Krishi Bank. Annual Report, 2011-12, Bangladesh Bank. http://www.krishibank.org.bd/ www.bangladeshbank.org.bd www.bpatc.org.bd/handouts/Agriculture_Bangladesh.ppt http://www.bangladesh.gov.bd/index.php?option=com_content&task=catego ry&secti http://bdmofiz.blogspot.com/2010/12/agribusiness-in-bangladesh.html http://enwikipedia.org/wiki/Ag_inBd

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6.4 Annex-1
Questionnaires Name Designation....
1) Are you concerned about agribusiness? 2) In which area are you financially helping entrepreneurs for agribusiness? 3) What was your performance in the crop, fisheries and livestock sector in the year of 2011-12? 4) What was your role in the agro equipment arena in the previous year? 5) What was your performance in the Agro based Industrial Project in the year of 2011-12? 6) In which priority sector is your bank flourishing? 7) Have you taken any initiative for improving credit management system recently? 8) Will you increase loan disbursement targets for the priority sectors?

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