Non-Banking Financial Companies (NBFCs) in the country are witnessing a significant surge in loan disbursements, far outstripping deposit growth, raising concerns about potential financial imbalances.
According to Bangladesh Bank data, loans extended by NBFCs rose by Tk2,317 crore in 2024, while deposits grew by just Tk534 crore over the same period.
Deposits in NBFCs increased to Tk48,025 crore in 2024, up from Tk47,491 crore in 2023, while total loan disbursements reached Tk76,076 crore from Tk73,759 crore.
This represents a more than fourfold rise in loan growth compared to deposits, highlighting an aggressive lending trend in the sector.
Experts warn that this widening gap between loans and deposits could lead to an asset-liability mismatch, posing financial stability risks.
The loan-to-deposit ratio suggests that NBFCs are prioritising loan disbursements without securing sufficient deposits to support them.
Since 2015, several financial institutions have been embroiled in large-scale loan frauds, leading to the embezzlement of approximately Tk8,000 crore. Of this, Tk5,550 crore was misappropriated by directors themselves, triggering financial crises that left many institutions unable to return depositors’ money.
In response, depositors staged protests and rallies, leading to a decline in deposit levels. However, recent trends indicate a recovery in deposits, albeit with a continued decline in the number of customers.
Deposits rise, but customer accounts decline
Despite a slight increase in deposits, the number of deposit accounts has sharply declined, reflecting ongoing trust issues among customers. The number of deposit accounts fell from 436,834 in 2023 to 413,875 in 2024, a drop of 22,959 accounts, according to central bank data.
Regional data show that the Dhaka division dominates deposit holdings, accounting for 92.53% of total deposits at the end of December, followed by Chattogram at 4.62%. The lowest share of deposits was recorded in Barishal at just 0.16%.
Gender-wise, male-owned enterprise deposit accounts (7.33%) were 10.09 times higher than those held by females (0.73%). Similarly, male-owned individual deposit accounts (60.20%) outnumbered female-owned accounts (31.74%) by a ratio of 1.90 to 1 at the end of 2024.
Loan disbursement trends
Total loan and advance disbursements increased by 8.10% in 2024 compared to 2023. The majority of loans (46.14%) were directed towards the industrial sector, followed by trade and commerce (23.36%) and consumer finance (15.14%).
Bangladesh currently has 35 NBFCs, including three state-run institutions, with a total of 298 branches operating across the country.
Courtesy: Daily Sun.
Bd-pratidin English/Tanvir Raihan
