Staff Reporter :
The total defaulted loans in the country’s non-bank financial institutions (NBFIs) have surged to over Tk 24,711 crore by the end of June 2024, representing 33% of the sector’s total loan portfolio.
According to Bangladesh Bank data, the total outstanding loans in NBFIs reached Tk 74,533 crore at the end of June this year. In comparison, outstanding loans stood at Tk 74,389 crore at the end of March 2024, with non-performing loans (NPLs) amounting to Tk 23,889 crore or 32% of total loans. This indicates a 14.57% increase in defaulted loans over the past six months.
Additionally, by the end of June, irrecoverable or bad loans reached Tk 21,033 crore, accounting for 28.22% of total disbursed loans in the sector.
Experts attribute the rise in NPLs to a combination of factors affecting both weaker and stronger NBFIs. They cite liquidity crises, fierce competition with banks, and reputational damage caused by various irregularities as key contributors to the sector’s challenges.
These factors are also making it difficult for NBFIs to attract deposits, while borrowers are struggling to repay loans due to poor business performance.
Currently, 35 non-bank financial institutions are operating in the country, but only a few are performing well. Institutions such as People’s Leasing and Financial Services, Bangladesh Industrial Finance Company, Fareast Finance, International Leasing and Finance, and First Finance have default rates exceeding 90% of their respective loan disbursements.
As of June, deposits in the country’s NBFIs stood at Tk 45,116 crore.