B Mirror Report: Private-sector credit growth in Bangladesh fell to a historic low of 4.72 per cent in March 2026, signalling continued weakness in investment and business activity amid mounting economic challenges.

According to Bangladesh Bank (BB) data, this is the lowest private-sector credit growth recorded since 2003. The previous lowest figure was recorded just a month earlier in February 2026.

Economists and bankers attributed the sharp decline to high lending rates, the ongoing energy crisis, exchange-rate instability, rising non-performing loans (NPLs), and weak investor confidence. Private-sector credit growth has remained in single digits since August 2024, reflecting prolonged sluggishness in the economy.

A senior Bangladesh Bank official said the central bank has maintained a tight monetary policy with the policy rate at 10 per cent to control inflation.

“The higher lending rate, energy crisis and external shocks stemming from the Middle East crisis are major reasons behind the declining credit demand,” the official said.

The central bank had projected private-sector credit growth at 8.5 per cent by June 2026, though current growth remains well below the target.

Business leaders say the current environment is discouraging investment expansion. BKMEA President Mohammad Hatem said entrepreneurs are struggling due to high borrowing costs, prolonged energy shortages and what he described as “anti-business taxation policies.”

“Under such circumstances, who dares to think of business expansion?” he said.

Mutual Trust Bank Managing Director and CEO Syed Mahbubur Rahman said weak economic activity has significantly reduced the opening of letters of credit (LCs) for imports. He added that banks are increasingly investing in government securities instead of lending to businesses.

“In fact, both internal and external factors are not conducive to investment and business expansion,” he said, warning that the economy may be heading toward stagflation.

NRBC Bank Managing Director and CEO Dr Md Touhidul Alam Khan said tight monetary policy, liquidity shortages, rising bad loans and increased government borrowing from banks have further constrained lending capacity.

He warned that the prolonged slowdown in private-sector credit could hurt industrial investment, manufacturing output and overall economic recovery.

Meanwhile, economists expressed concern over the sharp fall in credit growth. Policy Exchange Bangladesh Chairman Dr M Masrur Reaz described the latest figure as “severely worrying,” saying the business environment has weakened significantly in recent times.