Credit appetite of the local private firms continues to fizzle out as the ongoing battle against inflation makes bank borrowing more expensive amid a volatile political climate after the August political changeover.  

Private sector credit growth slowed in January this year as the lending rate went up due to the central bank’s contractionary monetary policy, according to experts and analysts.

Higher government borrowing and spike in the benchmark rate might cause credit flow to private sector slow

Bangladesh Bank also raised the benchmark policy rate by 25 basis points to 8 percent

Private sector credit growth has slowed in recent months with banks and borrowers adopting a go-slow strategy amidst economic stress and growing apprehensions of a political crisis centring the upcoming parliamentary elections in January.

The private sector credit growth in Bangladesh nosedived to single digit in July as both banks and borrowers face multiple challenges amid lingering economic uncertainty at home and abroad and the growing political crisis centring next year’s national elections.

Investments made by full-fledged Islamic banks in Bangladesh surged nearly nine times their deposits in a span of a year, raising questions as private sector credit growth has slowed in the entire banking sector, official figures showed.  

Private sector credit growth in Bangladesh dropped to a 14-month low of 11.23 per cent in April owing to weak credit demand amid the current business slowdown, official figures showed.  

Private sector credit growth in Bangladesh slipped to a 12-month low of 12.03 per cent in March, a development that may hurt GDP growth and job creation. 

While the government is distracted by elections, the financial economy will suffer