Business Report :
Industrial term loan disbursements in the country’s banking sector increased to Tk 97,138 crore in the previous financial year which was up from Tk 88,738 crore during FY24, according to the latest data from Bangladesh Bank.
Correspondingly, industrial loan recovery also increased to Tk 1,07,297 crore, up from Tk 94,148 crore in the FY24, reflecting businesses’ attempts to deleverage in an uncertain environment.
Total outstanding industrial term loans increased to Tk 3,84,854 crore from Tk 3,43,338 crore a year earlier, indicating weak loan demand and limited new industrial activity.
Industrial credit, for both term and working capital, advanced to Tk 5,62,344 crore in the 2022-23 financial year from that of Tk 4,81,517 crore in FY22.
Sector insiders said the growth to improvement in business environment to some extent after the change in government on August 5, 2024.
LC opening for imports-a leading indicator of industrial investment- surged to $69 billion in FY25 compared with that of $68.9 billion in FY24.
Moreover, the dollar rate remained stable at around Tk 123 each for more than six months which relieved businesses from high costs for currency volatility.
On top of that, the Bangladesh Bank bought near $2 billion from banks since July to halt the dollar rate from plunge.
However, loan disbursements remained subdued due to ongoing political instability and massive non-performing loans of banks
The economic policy direction under the interim government remains unclear, further undermining investor confidence, they said.
The banking sector itself is under stress, grappling with a severe liquidity crisis, a growing volume of non-performing loans (NPLs), and a weakening asset quality profile, leading to depositor anxiety.
Moreover, businesses struggled with the rising cost of borrowing.
Lending rates climbed to nearly 14 per cent, further discouraging new investment.
Private sector credit growth dropped to 6.5 per cent in June, remains well below pre-crisis levels, highlighting the broader economic slowdown.
The ongoing economic uncertainty is squeezing business revenues and cash flow, making it increasingly difficult for companies to meet their debt obligations, experts added.
