Loan and advance disbursements by non-bank financial companies (NBFCs) continued to decline in the July-September period of 2025, extending a downward trend that began after peaking in the first quarter of the year, despite remaining well above last year's levels.
Total disbursements of economic-purpose loans and advances stood at Tk 58.03 billion in January-March 2025 before falling to Tk 50.93 billion in April-June, according to the Bangladesh Bank (BB) data.
The declining trajectory persisted in July-September, when disbursements declined further to Tk 48.58 billion.
Total disbursements fell by 4.62 per cent in July-September 2025 compared to the previous quarter.
However, lending activities were still 30.10 per cent higher than the July-September quarter of 2024, indicating stronger overall credit flow despite the recent slowdown.
The economic-purpose loans and advances reached a total outstanding balance of Tk 777.35 billion during the July-September quarter of this year, marking a 0.76 per cent rise compared to the last quarter.
Loan recovery performance also weakened during the quarter.
Total recoveries declined by 18.15 per cent compared to April-June 2025, although they recorded a 9.34 per cent increase compared to the corresponding quarter of 2024.
Loan recoveries reached Tk 59.69 billion in July-September 2025, down from Tk 72.93 billion during the previous quarter, the central bank data shows.
Such recoveries amounted to Tk 66.79 billion during January-March of this year.
The sector-wise data shows industry remained the largest recipient of NBFC financing, accounting for 39.36 per cent of the total disbursements during July-September 2025.
This was followed by trade and commerce at 23.37 per cent and consumer finance at 17.43 per cent.
During the quarter, disbursements for consumer finance increased by Tk 1.61 billion, or 23.55 per cent, to Tk 8.47 billion, while lending to the construction sector rose sharply by Tk 1.62 billion, or 36.89 per cent, to Tk 6.01 billion compared with April-June 2025.
In contrast, disbursements for industrial purposes declined by Tk 0.80 billion, or 4.0 per cent, to Tk 19.12 billion.
Lending to trade and commerce fell by Tk 2.90 billion, or 20.37 per cent, to Tk 11.35 billion, while loans to the transport sector decreased by Tk 0.24 billion, or 26.83 per cent, to Tk 0.65 billion during the same period.
Disbursements under the "others" category also dropped significantly, falling by Tk 1.14 billion, or 29.80 per cent, to Tk 2.68 billion in July-September 2025 compared with the previous quarter.
Experts say the January-September trend suggests NBFCs are gradually tightening or rebalancing their lending portfolios, shifting toward consumer and construction financing while reducing exposure to trade, transport, and other segments amid persistent economic and liquidity pressures.
Dr Masrur Reaz, chairman of Policy Exchange Bangladesh, says the continued decline in NBFC economic-purpose loan disbursements reflects liquidity constraints emanating from stranded assets in the form of high non-performing loans (NPLs), higher funding costs, and a more cautious risk appetite among lenders.
He notes that although year-on-year growth remains strong, the quarter-on-quarter slowdown suggests NBFCs are perhaps prioritising balance-sheet stability over aggressive lending.
Weaker loan recovery in the July-September quarter could further limit credit expansion, while the shift toward consumer finance and construction indicates targeted lending rather than broad-based growth, he says.
Without policy support to ease refinancing and improve liquidity, he warns, the downward trend in disbursements may persist in the near term.
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