Quarterly green, sustainable financing grows marginally

FE REPORT | Published: November 04, 2023 23:01:56

Financing through 'green' and 'sustainable' mechanisms by banks and allied institutions in terms of loans grew marginally during April-June period over the previous quarter, according to the central bank.
Such green and sustainable funding was recorded at Tk 404.25 billion during the period in question or up by 0.29 per cent against Tk 403.1 billion during the January-March period.
The Bangladesh Bank's latest report styled 'Quarterly review report on sustainable finance of banks and financial institutions (FIs)' disclosed the financing data last week.
The total contribution to green financing by banks and FIs surged by 8.66 per cent to Tk 39.28 billion during the April-June quarter over its previous quarter.
The contribution by the banking sector was recorded at Tk 31.45 billion or up by 13.3 per cent during the quarter under review.
On the other hand, the FIs contributed Tk 7.84 billion, which was down by 6.6 per cent during the quarter.
Meanwhile, the total contribution of sustainable financing dropped by less than 1.0 per cent to Tk 364.97 billion during the quarter under review.
The contribution to sustainable finance by banks was recorded at Tk 351.96 billion or down by 0.54 per cent.
On the other hand, the FIs contributed Tk 13.01 billion, which was down by 0.45 per cent, during the period under review.
As per the BB orders, banks and FIs have to maintain 5.0 per cent green financing and 20 per cent sustainable finance in their term loan disbursements.
However, some 54 out of 61 banks and 14 out of 34 FIs have had exposure to sustainable finance in the reporting quarter.
They invest in sustainable agriculture, CMSMEs, socially responsible financing, working capital and demand loan of green products/projects/initiatives, and priority green/eco-friendly products for the trading sector under the sustainable finance category.
On the other hand, some 41 out of 61 banks and 10 out of 34 FIs have had exposure to green finance in the reporting quarter.
They invest in renewable energy, efficient alternative energy, liquid waste management and solid waste under the green finance category.
The BB report said during the review quarter 17 banks and nine FIs had surpassed the target of green finance (5.0 per cent)