During the last 14-year from 2009 to 2023, Bangladesh witnessed a sevenfold increase in bad loans. Starting at BDT 22,481.41 crore in 2009, these loans surged to a staggering BDT 1,56,39,00,00,000 crore by June 2023, according to Bangladesh Bank data. The substantial rise in bad loans has raised concerns and prompted questions about its causes, despite various incentives introduced to address the issue, as noted by the former chief economist of the World Bank’s Dhaka office.
The issue of bad loans and reduce the growth of loans to defaulters. It points out that borrowers who receive opportunities for loans must be more responsible, and the practice of offering loans with minimal requirements has been taken advantage of too often. The article likens the problem of bad loans to a cancer in the economy, suggesting that it cannot be solved with simple remedies.
This stricter approach should have been implemented earlier, as the delay has allowed defaulters to continue benefiting. To expedite the resolution of cases against loan defaulters, the institutional capacity needs to be strengthened, as legal constraints, the application of laws, and institutional weaknesses have hindered the process.
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