The ministry of finance plans to roll out a low-cost refinancing scheme of Tk 200 crore from July to boost milk cow rearing in the country after finance minister AMA Muhith approved the proposal last week.
The scheme involves a five per cent interest rate for borrowers to be lent through state-owned banks, while the finance ministry will subsidize the banks concerned, a 
senior finance official said, reports the New Age.
Bangladesh Bank will provide the fund to banks which will manage it to improve rural economy and ensure supply of cow milk for vast majority of the population and reduce the import of milk powder substantially.
Initially, five public sector banks have been selected by BB to kick start the scheme. The banks are—Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Sonali Bank Ltd, Janata Bank Ltd and Agrani Bank Ltd.
‘The scheme has been approved by the minister (finance minister). We are now working on percentage of subsidies to be given to participating banks,’ a top official in the finance division told New Age on Sunday.
The scheme will be introduced from the next fiscal year, he said.
Officials concerned at BB said they had come forward to extend low-cost bank fund for rural youths who can invest on milk cow rearing and benefit from the scheme as well as to contribute to the economy and mass nutrition.
The original plan for such financing came from fisheries and livestock ministry that sought Tk 1,000 crore from the finance ministry on the same head to roll out the programme from 2015-2016 fiscal year, a source at the finance ministry said.
The ministry of finance forwarded the proposal of livestock ministry to BB for their comments and to let the ministry to know about the availability of resource to back the sub-sector of the rural economy.
‘We have planned to allocate Tk 200 crore as refinancing scheme for milk cow rearing, which was approved at the board of directors meeting of BB,’ a general manager of the central bank said.
‘We will make the fund available to selected banks, but the government needs to give subsidies to lenders ,’ the GM added.
The percentage of subsidy should be fixed at five per cent so that banks take due interest to disburse loans to their potential clients, he said.
The list of banks could be broadened later to private ones if they take interest. The scheme has been initially planned to continue for five years, a finance ministry official said.
