Bangladesh’s capital market remains underutilized for business financing, overshadowed by easy access to bank loans, which has led to a stunted equity market and a banking sector burdened by rising non-performing loans. Between 2016 and 2023, equity market contributions to business financing ranged from Tk 2 billion to Tk 14 billion annually, with an aggregate of Tk 54 billion, representing just 0.5% of total business financing. Comparatively, the banking sector contributed Tk 10.08 trillion (99.5%) in the same period. Despite being 13% of India’s GDP, Bangladesh achieved only 1% of India’s IPO numbers during this period.
Market insiders attribute weak corporate governance and reluctance of successful companies to list as key challenges. Proposals for mandatory long-term financing via the equity market are under discussion, with the Bangladesh Securities and Exchange Commission advocating for reforms. IPO activity remains stagnant, with just Tk 1.1 billion raised in 2024 up to September, highlighting the need for market-driven policies to attract quality companies.
Source for more details:
