Bangladeshi companies get about 75 per cent of their financing from banks, leaving corporate growth heavily dependent on lenders while equity and bonds remain underused as sources of long-term capital.
The imbalance was at the centre of the IDLC Capital Market Conclave 2026 in Dhaka on Saturday, where market leaders called for larger, financially sound companies to list, deeper bond and equity markets and stronger investor confidence to reduce pressure on the banking system.
IDLC Investments Managing Director Mesbah Uddin Ahmed said companies in Bangladesh rely on banks for roughly three-quarters of their financing, compared with about 53 per cent in India and 15-20 per cent in more developed markets.
Bank lending has played a major role in Bangladesh’s economic growth, he said, but the financial system now needs a broader mix of bank loans, bonds and equity to become more resilient.
The capital market, however, remains small relative to the economy.
Dhaka Stock Exchange Chairman Mominul Islam said market capitalisation stood at about 7.4 per cent of GDP or less, with a target to raise it to 20 per cent by 2030.
He said that could expand the market capitalisation, including bonds and government securities, from around $30 billion to more than $200 billion.
Reaching that scale will require more companies to come to market.
Bangladesh Securities and Exchange Commission Chairman Masud Khan said the regulator had already held talks with several domestic, foreign and multinational companies and wanted businesses to see listing as an attractive financing option rather than an obligation.
“We want companies to enter the capital market voluntarily, without being compelled to do so, and benefit from it,” Khan said.
Participants said more reputable companies with strong financial foundations, sound corporate governance and a consistent business track record should enter through initial public offerings and direct listings.
That would broaden investment choices, improve liquidity and help strengthen investor confidence.
IDLC Investments Chairman M Jamal Uddin said the case for alternative financing was becoming stronger as the economy expanded and demand for credit increased.
A deeper capital market could provide companies with long-term funds while reducing some of the financing pressure now borne by banks, he said.
But increasing the number of listed companies addresses only the supply side.
IDLC Finance Chairman Kazi Mahmood Sattar said Bangladesh also lacked strong mutual-fund practices that could channel household savings into the market.
In other countries, savers with limited knowledge of or confidence in stocks often invest through mutual funds. In Bangladesh, many still favour fixed deposits, even as deposit rates have fallen to single digits, he said.
“Not every investor in the stock market is willing to gamble,” Sattar said, adding that many savers want relatively secure returns somewhat above bank deposit rates.
A panel on diversifying corporate financing also examined how companies could reduce funding constraints by using a broader mix of bank loans, bonds and equity.
Speakers said stronger corporate governance, effective regulation and better financing structures would be essential to attract long-term capital and increase business value.
The broader message from the conclave was that Bangladesh cannot reduce its dependence on bank financing by expanding only one side of the market.
It will need more credible companies raising funds through stocks and bonds, more investable products for savers and greater confidence that the capital market can serve as a dependable source of long-term finance.
