Shah H Khan; Dbarta24 — Struggling under the weight of prolonged economic shocks, Bangladesh’s private sector business leaders are urging the government to introduce a 20-year refinancing scheme worth at least Tk 2 lakh crore at a 7 percent interest rate to salvage distressed industries.
The private sector—the nation’s largest employment generator—has been caught in a relentless cycle of instability stemming from the post-COVID aftermath, global geopolitical tensions, acute energy shortages, domestic political transitions, and cripplingly high bank interest rates.
According to data from the Bangladesh Bureau of Statistics (BBS), Gross Domestic Product (GDP) growth plummeted to a sluggish 2.22 percent in the third quarter (January–March 2026) of FY2025–26, highlighting the severe slowdown across the domestic economy.
High Interest Rates and Stagnant Credit Growth
Despite the total bank credit rising to Tk 18.25 lakh crore, private sector credit growth crawled at just 4.98 percent in May 2026.
Business leaders attribute this sluggishness directly to skyrocketing borrowing costs, with some commercial banks charging interest rates as high as 15 to 16 percent.
In response to market demands, Bangladesh Bank (BB) recently announced a Tk 60,000 crore stimulus package to revive closed factories and boost private investment.
Additionally, the central bank mandated a maximum 4 percent spread between deposit and lending rates to curb soaring interest rates.
“We are well aware that high interest rates prevent many entrepreneurs from securing loans. That is why we issued a circular fixing the spread at 4 percentage points. If a bank collects deposits at 6 percent, its lending rate must be capped within 10 percent,” stated Arif Hossain Khan, Executive Director and Spokesperson of Bangladesh Bank.
“If more funds are needed in the future based on government directives, we are fully prepared to extend further policy and financial support to the business community.”
Fair Distribution Key to Preventing Industry Collapse
While the central bank’s Tk 60,000 crore package offers temporary relief, trade bodies emphasize that the scale of the crisis requires a far larger fund to make a structural impact across all sectors.
“Entrepreneurs have been under severe strain for a long time,” noted Helal Uddin, former Vice President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). “While Bangladesh Bank’s refinancing scheme is a welcome initiative, its success hinges on implementation. Historically, such large-scale packages favor large corporations while small, cottage, medium, and micro-entrepreneurs (CMSMEs) are left behind. Equitable distribution of funds is vital.”
Senior bankers also stressed that failing to support ailing businesses right now could trigger wider economic contagion and massive job losses.
“Many entrepreneurs suffered due to the pandemic and recent political instability, yet many retain the capacity to recover if given short-term working capital support,” said the Chairman of Agrani Bank. “Extending a helping hand to sick industries and SMEs is not just beneficial for banks—it is an absolute necessity for the national economy.”
Export Sector Performance Presents Mixed Picture
As the government sets an ambitious export target of $63.40 billion for FY2026–27—up from the $48 billion realized in FY2025–26—performance across sectors at the start of the fiscal year remains mixed:
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Jute & Jute Goods: Surged significantly by 54 percent to reach $85 million in July 2026, compared to $55 million in July 2025.
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Home Textiles: Grew 15.37 percent year-on-year to hit $78 million.
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Leather & Leather Goods: Rose 2.81 percent to $131 million, driven by a 5.71 percent growth in footwear exports ($78 million).
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Frozen & Live Fish: Declined sharply by 13.28 percent, falling to $36 million.
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Agricultural Products: Contracted by 9 percent, dropping to $82 million.
Economists emphasize that achieving high export targets will require reducing production costs, overcoming infrastructure bottlenecks, and offering flexible policy support tailored to volatile global trade environments.