Private sector credit growth fell to a historic low of 4.17% in September 2026 amid a prolonged slowdown in economic activity.
Growth has remained below 5% for seven consecutive months, as demand for loans has weakened mainly due to inadequate energy supplies and geopolitical tensions, according to bankers.
They also said most banks had become cautious about approving fresh loans to avoid repayment risks amid a rise in non-performing loans across the banking sector.
The private sector credit growth came down to 4.17% in September 2026 on a year-on-year basis from 4.75% a month ago, according to Bangladesh Bank's provisional data.
It was 2.63-percentage points lower than the Bangladesh Bank target of 6.80% for the first half of current FY27.
The private sector credit growth stood at 4.72% in March, 4.75% in April, 4.98% in May, 4.47% in June, 4.62% in July, and 4.75% in August, the central bank data showed.
The central bank had announced the stimulus package aimed at reviving economic activities and supporting businesses affected by the prolonged slowdown.
Besides, the banking regulator has already taken several measures to encourage banks to resume lending, including facilities for loan rescheduling and restructuring.
Classified loans in the country's banking sector ballooned to Tk606,000 crore as of June 2026, accounting for 32.78% of the entire loans worth Tk1,850,000 crore disbursed by all scheduled banks.
Why it matters
The sharp decline in private sector credit growth reflects severe liquidity and lending constraints facing businesses across Bangladesh amid mounting classified loans.