Staff Reporter :
The non-bank financial institutions (NBFIs) sector in Bangladesh has plunged into a severe crisis, with defaulted loans rising by nearly Tk 2,500 crore in just the first six months of 2025 (January–June).
According to the latest Bangladesh Bank data, overall defaulted loans in the sector now exceed Tk 27,500 crore—around 36percent of total outstanding loans.
Alarmingly, 20 institutions are operating with default rates ranging between 50percent and 99percent, leaving them on the verge of collapse. Depositors of these troubled institutions are struggling to recover their money, while new loan disbursement has almost completely stopped. Effectively bankrupt, many of the NBFIs have failed to regain credibility despite repeated turnaround plans.
Last month, the central bank issued notices to 20 such institutions, questioning why they should not be shut down for failing both depositors and regulators.
Bangladesh Bank has already moved to close nine critically distressed institutions: FAS Finance, Bangladesh Industrial Finance Company (BIFC), People’s Leasing, International Leasing, Aviva Finance, Premier Leasing, Fareast Finance, GSP Finance, and Prime Finance. These companies have default ratios as high as 80–99percent.
Md. Shahriar Siddiqui, Director and Assistant Spokesperson of Bangladesh Bank, said the closure decision is aimed at protecting depositors’ interests.
“It is still under review, but whatever steps are taken will be to safeguard depositors. The process will begin once necessary funds are secured from the government,” he explained.
The remaining 13 at-risk NBFIs—including CVC Finance, Bay Leasing, Islamic Finance, Meridian Finance, Hajj Finance, IIDFC, Uttara Finance, Phoenix Finance, First Finance, and Union Capital—are also under close watch, each holding default rates above 50percent.
Sector analysts note that the crisis stems from years of weak governance, political influence in loan sanctioning, poor risk management, and a lack of regulatory enforcement.
Unlike banks, NBFIs rely heavily on public deposits and short-term borrowings, making them particularly vulnerable to liquidity shocks.
Experts warn that unless the sector is overhauled with stricter supervision, stronger boards, and recapitalization measures, confidence in NBFIs will continue to erode—potentially destabilizing the broader financial system.
