Profitability of Banana Cultivation Under Agricultural Credit in a Selected Area of Bangladesh

Banana cultivation is one of the capital-intensive farming activities in Bangladesh. Agricultural credit can play important role by providing the needed liquidity to farmers who do not have sufficient investable funds to exploit the opportunity. The present study analyses the adequacy, utilization and repayment of credit, the profitability and the relationship between profitability and loan size of banana cultivation in sadar upazila of Narsingdi district of Bangladesh. Primary data were collected from randomly selected 60 borrowers of the different NGOs in the study area. Data were collected through direct interviewing using pre-tested semi-structure questionnaire. Both tabular and econometric techniques were used to analyze the data. Average amount of loan were received Tk. 13750, 23100, 35100 for the small, medium, and large categories, respectively. The overall average amount of loan received was 85.4% of applied amount. Most of the credit amount was utilized for farming purposes. Status shows that repayment was highly satisfactory. Multiple regression models indicate that amount of loan received and education were significant factors affecting loan repayment. It was estimated that overall average annual total cost of production of banana per hectare was Tk. 557710.46 while gross return and net returns were Tk. 931023.7 and Tk. 373313, respectively. The overall benefit-cost ratio of banana cultivation was 1.67. The relationship between loan size and profitability of banana cultivation indicated that medium size loan receiver farmers were more profitable compare to the small and large amount of loan receiver farmers. The findings of the study indicated that reasonable amount of credit ensures farmers to profitable farming activities. The findings of this study will helpful for financial institutions officials and policy makers to formulate the loan disbursement policies related to agricultural credit in Bangladesh.