Green financing by banks and non-bank financial institutions increased in the October-December quarter compared with that in the previous quarter.
According to a Bangladesh Bank quarterly report on sustainable finance published recently, banks’ investments in green projects increased to Tk 7,620 crore at the end of December 2024, up from Tk 6,584 crore in September and Tk 6,978 crore in June.
NBFIs also experienced a significant growth, with green financing rising to Tk 1,025 crore in the October-December quarter from Tk 212 crore in July-September quarter and Tk 992 crore in April-June quarter.
Green financing surges at the end of 2024 as banks sought to secure favourable sustainable finance ratings announced annually by the Bangladesh Bank, bankers said.
Besides, sustainable financing, including green financing, increased due to improved economic and political conditions after countrywide disruptions and instability in the wake of political shift on August 5, 2024, they said.
They noted that the situation improved, with businesses gradually resuming investments.
Banks were focusing on sustainable financing to avoid risky lending and minimise high non-performing loan burden, they added.
Green financing represented 9.32 per cent of the total term loan disbursements by banks and 24.5 per cent for NBFIs during the October-December quarter.
Forty-three banks out of 61 and 8 finance companies out of 34 have had exposure in green finance in the reporting quarter.
Overall, banks’ sustainable financing soared to Tk 1,44,992 crore in December from Tk 1,04,424 crore at the end of September.
 It was at Tk 1,13,807 crore in June, Tk 85,337 crore in March and Tk 87,826 crore in December 2023.
NBFIs’ sustainable financing also an increase, with it rising to Tk 3,123 crore in December from Tk 1,631 crore in September and Tk 2,992 crore in June.
Sustainable finance by banks was 41.54 per cent and that by the NBFIs was 20.47 per cent of their total loan disbursements in the December quarter.
There was no investment in green bond, green Sukuk or impact fund by the banks and NBFIs in the period.
The total utilisation of climate risk fund in the January-March quarter was only Tk 8.21 crore.
The total outstanding balance of sustainable finance by banks was Tk 6.04 lakh crore at the end of December.
In the October-December period, banks recovered Tk 81,305 crore and the NBFIs Tk 2,106 crore from their disbursed sustainable loans.
In the period, banks rescheduled Tk 8,683 crore and the NBFIs Tk 63.21 crore in sustainable finance.
Fifty-six banks out of 61 and 14 finance companies out of 34 have had exposure in sustainable finance in the reporting quarter.
During the reporting quarter, 30 banks and 13 NBFIs have been able to fulfil their target, which was 20 per cent, of sustainable finance compared to the total loan disbursement.
During the quarter under review, 34 banks and 8 NBFIs surpassed the target of green finance, which was 5 per cent, compared with the total term loan disbursement.
The Bangladesh Bank introduced the Sustainable Finance Policy in December 2020.
