Study shows Dhaka and Chattogram account for 78% of all loans in Bangladesh

According to a report by the Policy Research Institute (PRI), nearly 78% of all loans in Bangladesh are concentrated in just two metropolitan areas—Dhaka and Chattogram—leaving the rest of the country underserved. This heavy financial centralization hampers inclusive growth and restricts employment opportunities outside these cities.

Ahmad Ahsan, PRI’s director, highlighted that Bangladesh is one of the most centralized countries globally relative to its size. This centralization affects public service delivery, urban governance, and especially financial flows. Small and medium enterprises (SMEs) in districts beyond Dhaka and Chattogram face significant challenges in accessing credit, limiting their ability to create jobs and grow.

The PRI study also revealed that Bangladesh’s 12 city corporations and 325 municipalities operate under over 40 ministries, leaving mayors with little power to coordinate essential services such as infrastructure, education, and healthcare. To address these issues, PRI recommends increasing local government funding to at least 1% of GDP, boosting property tax collection in Dhaka and Chattogram (currently at 0.13% and 0.06% of GDP, respectively), and introducing annual performance scorecards for local governments.

Dr. Badiul Alam Majumdar, National Consensus Commission member, emphasized that decentralization is crucial for increasing accountability and improving the quality of life. While major development projects like Metrorail and Padma Bridge have been completed, true progress must include better health, education, and governance. Without empowering local governments and decentralizing power, sustainable development remains unattainable.