Tanzil hasan has been farming summer tomatoes in southern Bangladesh over the past three years. He dedicates his acre of land to cultivating this high-value crop, which commands prices four-to-five times higher than winter tomato varieties. However, the initial investment for this crop is also higher as the farmer needs to purchase heat-tolerant varieties of tomato seeds, install raised beds and rain shelters, and learn integrated crop management techniques, such as pruning, staking, sanitation, and curbing disease and pests.

Sourcing enough money for this up-front investment has been Oliar’s primary challenge in previous years. In his first year of planting summer tomatoes, Oliar received credit from traditional money lenders. But these loans came with high interest rates that cut into his profits. Oliar considered purchasing inputs on credit, but that can cost up to 30 percent more than paying cash and would have reduced profits.

USAID and BRAC Bank agreed to launch a new pilot agricultural loan program specifically for farmers working in the country’s southern river delta region. This product provides farmers with a single installment loan at an interest rate of 11 percent per year. Farmers have three to six months to repay the loan, versus the weekly loan repayment plans set up by traditional money lenders. As a test case, BRAC disbursed 50,000 taka loans (approximately $640) to seven tomato farmers including Oliar.