The government plans Tk2,700 crore in loans for around 14,000 entrepreneurs in export-oriented businesses, agro-processing, CMSME and emerging sectors at 5–7 per cent interest under the restoration phase of its Five-Year Strategic Framework for Reform and Development.
Under the framework, the government plans to overhaul the country’s credit allocation system over the next five years, shifting bank financing away from low-productivity uses towards MSMEs, export-oriented businesses, agro-processing and other high-growth sectors.
The plan combines wider access to finance with tighter monitoring of lending, stronger enforcement of lending standards and measures to contain the further accumulation of non-performing loans.
It also plans to disburse Tk160 crore in loans to at least 120,000 women entrepreneurs and 800,000 MSME entrepreneurs, while ultimately expanding access to finance to more than 2.5 million MSME and small entrepreneurs, including cottage and agro-based enterprises.
Credit expansion amid bad-loan crisis
The planned expansion of lending comes as the banking sector is already grappling with a severe bad-loan crisis.
Gross non-performing loans stood at Tk5.57 lakh crore at the end of December 2025, accounting for 30.60 per cent of total loans, according to Bangladesh Bank’s Financial Stability Report 2025.
Gross NPLs rose by Tk2.11 lakh crore in a year, highlighting the challenge of expanding credit without repeating lending practices that contributed to the deterioration in asset quality. Bangladesh Bank attributed the worsening situation partly to imprudent lending and weak oversight.
Against this backdrop, the government’s strategy marks a shift from simply increasing the volume of credit towards improving the allocation and quality of bank lending.
The government wants to reduce excessive concentration of credit in low-productivity uses and establish a more rules-based system where lending is directed towards productive, export-oriented and high-growth activities.
Reforming lending practices
In the first year, authorities plan to review interest-rate setting and lending practices so that credit conditions are better aligned with inflation, investment demand and employment objectives. Monitoring of lending rates and credit flows will also be strengthened.
The framework also calls for stronger oversight of high-risk lending and closer monitoring of loan performance, alongside coordinated action to prevent further accumulation of non-performing loans.
Another focus is reducing administrative inefficiencies and improving transparency in lending practices, which the government says can raise the cost of borrowing for businesses.
During the one-to-three-year restoration phase, the government plans to operationalise a policy framework for interest rates and lending practices and create more predictable, transparent and market-aligned credit conditions.
It also plans to improve competition and efficiency in the banking sector and enforce lending standards more consistently.
Beyond conventional bank lending, the strategy proposes developing long-term financing instruments, corporate bond market guidelines, credit guarantee schemes and development-finance mechanisms.
Over the three-to-five-year reconstruction and acceleration phase, concessional and refinancing schemes are planned to exceed Tk5,000–7,000 crore.
A significant portion of financing would be directed towards CMSMEs, women entrepreneurs and emerging sectors, with additional credit support for agriculture, agro-processing and rural enterprises.
The government also plans to align financing programmes with export diversification, industrial upgrading and value-chain development, suggesting that access to finance will increasingly be linked to broader industrial and export policy objectives.
