Bangladesh bank credit is flowing overwhelmingly to the capital rather than to climate vulnerable districts. Dhaka division accounted for 67.84% of all loans and advances at the end of June, according to Bangladesh Bank data reported by Mongabay.
In coastal Satkhira and Patuakhali, and in Sunamganj in the northeast, residents hold far more money in bank deposits than banks lend in those districts. In each case deposits are at least twice the size of loans.
The figures come weeks before the COP31 climate talks in Antalya. At preparatory meetings in Nadi, Fiji, Pacific representatives argued that countries that have contributed little to global warming should not have to take on more debt to cope with its consequences, according to an opinion piece in The Daily Star by a researcher from Khulna.
How much of Bangladesh's bank lending goes to Dhaka?
At the end of June, banks' total loans and advances stood at $146.55 billion (18.09 trillion Bangladeshi Taka), Mongabay reported. That was an increase of $2.01 billion (248.18 billion Bangladeshi Taka), or 1.39%, during the April-June quarter.
Dhaka's 67.84% share was split between 65.48% for urban areas and 2.36% for rural areas. Together with Chattogram, the country's other main commercial and industrial center, Dhaka accounted for about three-quarters of total bank loans and advances in the quarter. The reporting does not give exact shares for Chattogram, Rajshahi or Rangpur divisions.
The four divisions with large populations that depend on agriculture, fisheries, livestock and small businesses, all highly exposed to climate shocks, received much smaller amounts:
- Khulna: $5.45 billion (672.27 billion Bangladeshi Taka), up 2.23% in the quarter
- Mymensingh: $1.80 billion (222.49 billion Bangladeshi Taka), up 1.15%
- Barishal: $1.58 billion (194.86 billion Bangladeshi Taka), up 1.27%
- Sylhet: $1.50 billion (185.73 billion Bangladeshi Taka), up 2.31%
Satkhira bank loans and deposits show money leaving the coast
District figures show the starkest gaps. Each of the three districts Mongabay highlighted is exposed to cyclones, floods, salinity or river erosion:
- Satkhira (Khulna division): loans of $355.71 million (43.91 billion Bangladeshi Taka), about 0.24% of national lending; deposits of $745.03 million (91.97 billion Bangladeshi Taka)
- Patuakhali (Barishal division): loans of $280.13 million (34.58 billion Bangladeshi Taka), about 0.19%; deposits of $573.54 million (70.80 billion Bangladeshi Taka)
- Sunamganj (northeast): loans of $191.67 million (23.65 billion Bangladeshi Taka), about 0.13%; deposits of $642.74 million (79.31 billion Bangladeshi Taka)
In Sunamganj, deposits are more than three times the district's loans. For households, that means local savings are gathered by banks in these districts but largely lent out elsewhere.
Patuakhali faces cyclones, tidal flooding, salinity intrusion and river erosion, Mongabay reported. Across the south, cyclones and tidal surges hit districts while salinity cuts farm productivity and freshwater access. In the haor wetlands of the northeast, flash floods damage crops and livestock.
Why a Shyamnagar fish trader turned to an NGO lender
Saiful Gazi, 34, lives in Ramjannagar Union in Shyamnagar, Satkhira, and supports a family of four. He started a fish business in 2022, Mongabay reported.
When he applied to a private bank for a loan to expand, the bank rejected him for lack of collateral and the necessary documentation. He took a high-interest loan from a local NGO instead to keep the business running.
The reporting does not give interest rates for NGO loans. It includes no comment from Bangladesh Bank, commercial banks or the NGO lenders on why credit is scarce in these districts.
Gazi lived through Cyclone Aila, which struck on May 25, 2009. It killed 190 people and affected approximately 3.9 million people in Bangladesh, according to Mongabay.
Aila's damage outlasted the storm. Broken embankments and saltwater intrusion disrupted farming and drinking-water supplies for a long time, the Daily Star author wrote. His research on Aila-hit households found that disaster exposure within a household's social network mattered for its later income and investment decisions.
COP31 Bangladesh climate finance debate turns on debt
The World Bank has identified Bangladesh as highly vulnerable to climate change because of its low-lying geography, dense population and high exposure to climate-related hazards, Mongabay reported.
The country has cut cyclone deaths sharply. The Daily Star author cites the World Bank's 2022 climate and development report as documenting a hundredfold reduction in cyclone-related deaths since 1970. He credits cyclone shelters, early warning systems and community volunteers, but writes that families can survive a disaster and still lose their livelihoods.
He also cites the Intergovernmental Panel on Climate Change's projection of heavier rainfall from tropical cyclones and a higher proportion of the most intense storms globally, though regional differences remain.
The researcher writes that he will travel to Antalya next month for COP31 with Monash University's delegation. What Bangladesh will seek and secure on climate finance there is not yet known.
Nor does the reporting say whether Bangladesh Bank or the government has any policy to steer credit toward climate-vulnerable districts. Mongabay's account breaks off where it begins discussing the government's Bangladesh Delta Plan 2100.