Bangladesh ranks second highest in loan default in SA
News Desk :
While the rate of loan default in various countries of South Asia (SA) is on the decline, in Bangladesh this is on the rise.
Sri Lanka, facing an economic crunch, has a higher rate of loan default than Bangladesh.
But this rate is lower in the other countries of the region. Even Pakistan has a lower rate of default loans than Bangladesh.
Bangladesh ranks second highest in default loans in South Asia.
Bangladesh on Sunday published the updated figures on defaulted loans.
This stated that the volume of defaulted loans in the country had crossed Tk 1,500 billion (Tk 1,50,000 crore) taka.
At the end of June, default loans stood at Tk 1560.39 billion (Tk 1 lakh 56 thousand 39 crore), which is a Tk 244.19 billion (Tk 24,419 crore) increase from April-June, reports Prothom Alo.
The loan default rate in Bangladesh is now 10.11 per cent of the total loans.
This rate in Sri Lanka, facing an economic crisis, is 13.33 per cent. In Pakistan this is 7.4 per cent.
The rate of defaulted loans in India is low.
In the first quarter of this year (January-March) India’s loan default rate came down to 3.9 per cent.
The country’s central bank, Reserve Bank of India (RBI), predicts this will fall to 3.6 per cent next year.
Centre for Policy Dialogue (CPD)’s distinguished fellow Mustafizur Rahman, speaking to Prothom Alo, said many countries including India have managed to rein in default loans.
They have managed to do this by strictly enforcing the bankruptcy law and also through monitoring by the central bank and other institutions. In Bangladesh too, the institutions must be strengthened in order to rein in defaulted loans.
The World Bank publishes an account of the default loans of various countries on its website.
This reveals that Bangladesh’s default loans are on a steady rise.
In 2013 Bangladesh default loan rate was 4.8 per cent.
The next year, that is, 2014, it jumped up to 9.4 per cent.
According to the World Bank figures, in 2018 Bangladesh’s default loan rate went near 10 per cent.
It decreased somewhat after that. According to Bangladesh bank records, default loans have gone up again.
In the second quarter of the year (April-June), Pakistan’s loan default was 7.4 per cent.
Interestingly, even amid its crisis, default loans have decreased in Pakistan.
In the corresponding period of the previous year, the default loans there had been 7.8 per cent.
The World Bank’s data on developing countries shows that in 2022 Brazil’s default loan rate was 2.6 per cent.
Among the BRICS member countries, in the same span of time, Russia’s default loans stood at 6.1 per cent.
South Africa’s loan default rate was 4.5 per cent.
In Vietnam this was 1.6 per cent.
