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Industrial term loan disbursement posted significant year-on-year growth in the July-September quarter of fiscal year (FY) 2025-26, reflecting cautious investment appetite amid ongoing economic adjustments, according to Bangladesh Bank (BB) data.
Disbursement of industrial loans stood at Tk 247.71 billion during the period, marking an 11.86 per cent increase from Tk 221.46 billion in the same period of the previous fiscal year. The latest figure also shows a 1.96 per cent quarter-on-quarter rise compared to Tk 242.96 billion disbursed in the April-June quarter of FY25, indicating a gradual pickup in industrial credit flow.
However, loan distribution was notably higher in the October-December quarter of FY25, when banks disbursed Tk 310.82 billion, suggesting that credit momentum softened somewhat at the start of the current fiscal year.
On the recovery front, industrial loan repayments continued to improve, signalling stronger cash flow management by borrowers. Recovery of industrial loans reached Tk 289.22 billion in the July-September quarter of FY26, registering a sharp 41.06 per cent year-on-year increase from Tk 205.05 billion recovered in the corresponding quarter of FY25.
The recovery trend has remained on an upward trajectory over recent quarters.
Banks recovered Tk 271.81 billion in industrial loans during April-June FY25, up 2.82 per cent from Tk 264.36 billion recovered in the January-March quarter of FY25. Recovery peaked at Tk 331.75 billion in the October-December quarter of FY25, BB data showed.
Meanwhile, the outstanding stock of industrial loans stood at Tk 3.99 trillion at the end of the July-September quarter of FY26, underscoring the sector's continued importance in the overall credit portfolio of the banking system.
Bankers and analysts say the combination of moderate disbursement growth and rising recovery indicates a more risk-conscious lending approach by banks, amid concerns over asset quality, high interest rates and subdued private investment.
They also noted that sustained improvement in recovery performance could help ease pressure on banks' balance sheets and create room for fresh lending to productive industrial sectors in the coming quarters.
Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank, said that mismanagement in certain sectors-particularly the recent LPG cylinder crisis-has disrupted market operations, leading to a temporary halt in LPG cylinder sales.
He emphasised the importance of prioritising energy security and maintaining law and order post-election to restore confidence among businesses and consumers.
Despite the current challenges, Mr. Rahman noted that new investments are still being made, albeit slowly, which he views as a positive indicator for the economy, contributing to job creation.
Additionally, he pointed out that some readymade garment (RMG) entrepreneurs are performing well, showing resilience and adaptability in the face of both global and domestic pressures, which is helping sustain export earnings and employment.
He also mentioned that one potential source of term loans could be demand/forced loans that are later restructured. With improvements in law and order and energy security, he believes that industrial lending could gain momentum in the near future, he added.
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