56% of sustainable finance borrowers come from rural areas

More than half of the customers who have received loans under sustainable finance in Bangladesh are from rural regions.

According to the Quarterly Review Report on Sustainable Finance of Banks and Finance Companies, March 2025 by Bangladesh Bank, 56% of the total borrowers fall under this category.

So far, around 2.58 million people have received loans under sustainable finance from banks and financial institutions. Out of them, 1.455 million are from rural areas. Non-bank financial institutions (NBFIs) have provided loans to 5,840 borrowers, while the rest were disbursed by state-owned and private banks.

A senior official at Bangladesh Bank explained that commercial banks are required to allocate a portion of their lending to sustainable finance. A significant share of this naturally flows to rural areas, since it is comparatively easier for factories and businesses there to meet the compliance criteria for sustainable operations.

Bangladesh Bank data shows that sustainable finance is distributed across several categories: Sustainable Agriculture, Sustainable CMSME (Cottage, Micro, Small and Medium Enterprises), Sustainable Linked Socially Responsible Financing, Other Sustainable Linked Finance, and Green Finance. Altogether, Tk1.47 lakh crore has been disbursed under these segments so far.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh (ABB) and managing director and CEO of City Bank, told The Business Standard that a large portion of loans disbursed through agent banking reach rural communities. He added that agriculture is also a major recipient of sustainable finance, while many SME borrowers under this scheme live in rural areas. "In the coming years, technology will play a crucial role in expanding access to sustainable finance in rural Bangladesh," he said.

It is worth noting that Bangladesh Bank recently recognised City Bank as the Top Sustainable Bank of 2024.