Non-bank financial institutions (NBFIs) in Bangladesh are facing a significant challenge with default loans reaching Tk 19,951 crore, constituting 27.65% of total loans in June. This sharp increase of Tk 2,096 crore since March highlights the sector’s corruption and irregularities. The NBFIs had Tk 17,855 crore in non-performing loans (NPLs) in March, making up 25% of their loans.
These NPLs surged by 25.20% year-on-year, despite regulatory forbearance. Several NBFIs, including People’s Leasing and Financial Services Ltd and International Leasing and Financial Services Ltd, report NPLs exceeding 80% of their outstanding loans. The sector’s poor health is attributed to influential individuals taking loans and not repaying them, resulting in embezzlement.
The central bank’s lack of monitoring and action against irregularities has contributed to the problem. Policy Research Institute Executive Director Ahsan H Mansur calls for immediate license cancellation and ensuring the return of funds. Notably, NBFIs have higher NPLs than the banking sector, which stood at Tk 1.56 lakh crore, or 10.11% of outstanding loans in June.
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