Sustainable financing from the banking sector dipped to Tk35,196 crore at the end of the April-June quarter of 2023, compared to Tk35,387 crore at the end of the same period in 2023.
The NBFIs’ sustainable finance dipped to Tk1,301 crore compared with that of Tk1,306 crore, according to a Bangladesh Bank quarterly review report on sustainable finance of banks and non-bank financial institutions (NBFIs.)
Sustainable finance refers to business conducted in such areas and in such a manner that helps the overall reduction of external carbon emissions and internal carbon footprint.
Banks’ green financing, however, increased by 13.3% in the April-June period compared with that in the previous quarter ending in March 2023.
The amount of banks’ investments in green projects was Tk3,144 crore at the end of June against Tk2,775 crore at the end of March 2023.
Green financing by the NBFIs, however, dropped to Tk783 crore at the end of June from Tk839 crore at the end of March.
Green finance accounted for 6.16% and 17.88% of the total loan disbursements by the banks and the NBFIs respectively.
Forty-one out of the 61 banks and 10 out of the 34 NBFIs had had exposure to green financing in the reporting quarter.
Sustainable finance by banks was 13.59% and that by the NBFIs was 21.32% of their total loan disbursements in the reporting period.
The banks and NBFIs’ green finance soared to Tk12,226.46 crore in the year 2022 as the figure was Tk7,232.85 crore in 2021.
Banks financed the highest in working capital for green projects, which was Tk8,788 crore, followed by sustainable agriculture sector Tk8,005 crore, socially responsible financing Tk7,402 crore, and sustainable cottage, micro, small and medium enterprises Tk5,270 crore in the April-June period.
There was no investment in green bonds, green Sukuk or impact fund by the banks and NBFIs in the period.
Total utilization of the climate risk fund in the January-March quarter was only Tk19.03 crore.
The total outstanding balance of sustainable finance by banks was Tk158,000 crore and by the NBFIs Tk8,860 crore in June.
In the January-June period, banks recovered Tk24,188 crore and the NBFIs Tk409.41 crore from their disbursed sustainable loans.
In the period, banks rescheduled Tk189.7 crore and the NBFIs Tk18.27 crore in sustainable finance.
Fifty-four out of the 61 banks and 14 out of the 34 NBFIs had had exposure to sustainable finance in the reporting quarter.
In the April-June quarter, 15 banks and 8 NBFIs were able to achieve the sustainable financing target, which is 20% of their total loan disbursements.