Published: 11:42 PM, 28 July 2026
‘75-80% of bank loans go to corporates, SMEs left behind’
More than three-quarters of bank lending in Bangladesh continues to flow to large corporate borrowers, leaving small and medium-sized enterprises (SMEs), rural entrepreneurs and other underserved businesses with limited access to formal finance, experts said at a roundtable discussion in Dhaka on Monday.
Speaking at the event titled "Access to Finance in Bangladesh: Building a More Conducive Financial System for the Private Sector," organised by Policy Exchange Bangladesh (PEB) and the Metropolitan Chamber of Commerce and Industry (MCCI) at the chamber's Gulshan office, Bangladesh Krishi Bank Chairman Mohammed Nurul Amin said the country's financial system remains heavily skewed towards large corporate borrowers.
"About 75-80 percent of bank lending continues to flow to the corporate sector, creating a structural imbalance that has persisted for years," he said.
While large businesses enjoy relatively easy access to credit, many SMEs, traders and informal enterprises continue to struggle to enter the formal banking system, he added. To improve financial inclusion, Amin called for wider adoption of invoice financing (factoring), enabling suppliers to obtain financing against confirmed purchase orders or invoices without relying on traditional collateral.
He also proposed establishing a national collateral registry to help banks verify pledged assets, reduce fraud and improve lending efficiency. In addition, he advocated greater acceptance of movable assets as collateral and extending the validity of trade licences to ease administrative burdens on small businesses. Syed Abdul Momen, Head of SME Banking at BRAC Bank, said the banking sector's long-standing preference for corporate lending lies at the heart of many of its current challenges.
"Since independence, around 75 percent of bank financing has gone to corporates, leaving SMEs with limited access to credit," he said.
Questioning the banking sector's heavy dependence on collateral, Momen said BRAC Bank's experience shows that collateral alone does not necessarily reduce lending risks.
Of the bank's nearly Tk 1 lakh crore asset portfolio, around half consists of SME loans. About Tk 40,000 crore of these loans have little or no collateral but maintain a non-performing loan (NPL) ratio of only 2 percent, compared with a 7 percent NPL ratio for the Tk 10,000 crore collateral-backed SME portfolio.
"Collateral gives banks a sense of comfort, but it does not necessarily reduce risk," he said, urging banks to assess borrowers based on cash flow rather than pledged assets.
Momen also stressed the need for a stronger digital financial ecosystem, wider data sharing and the establishment of a private credit bureau to expand SME financing.
Highlighting BRAC Bank's digital lending initiative, he said bKash merchants can now obtain loans of up to Tk 50,000 through a fully digital process, with approvals taking about a minute.
Shams Mahmud, Managing Director of Shasha Denims Ltd, said exporters are facing mounting pressure as production costs continue to rise while export prices remain largely stagnant amid intense global competition.
He said the doubling of gas prices on January 30, along with higher electricity tariffs, wages and taxes, has significantly increased production costs.
"Our energy bill has almost doubled, and we have to bear an additional Tk 36 crore. Where will that money come from?" Mahmud said.
He also criticised policy inconsistencies and persistent difficulties in securing bank guarantees and offshore financing, warning that regulatory uncertainty and banking delays can disrupt business operations and push otherwise viable companies towards default.
Syed Mohammad Kamal, President of the American Chamber of Commerce in Bangladesh (AmCham), said SMEs lack the institutional support available to larger businesses and called for coordinated efforts by the central bank, the judiciary and other stakeholders to build a more inclusive financial system.
