Bank credit remains scarce in Bangladesh, particularly in areas most vulnerable to climate change. Lending is primarily concentrated in major commercial hubs like Dhaka and Chattogram, while coastal and flood-prone districts such as Satkhira, Patuakhali, and Sunamganj receive minimal support. Climate finance researcher Md Shamsuddoha emphasizes the need for low-cost loans to bolster climate-resilient sectors like agriculture and fisheries. However, the central bank attributes low lending levels to a shortage of local businesses and viable projects.

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Saiful Gazi, a 34-year-old fish business owner from Ramjannagar Union in Shyamnagar, has struggled to secure institutional financing. Despite the challenges posed by Cyclone Aila in 2009, which affected approximately 3.9 million people, Gazi started his business in 2022. His recent loan application was rejected due to insufficient collateral, forcing him to resort to high-interest loans from local NGOs.

The unequal distribution of bank credit raises concerns about adequate financing for communities needing to adapt to environmental changes. According to Bangladesh Bank, lending was predominantly aimed at Dhaka and Chattogram, which together accounted for approximately 75% of bank loans in the second quarter of 2026. In contrast, regions like Barishal, Khulna, Sylhet, and Mymensingh, which rely heavily on climate-sensitive sectors, received considerably less credit.

Despite a total loan volume of $146.55 billion (18.09 trillion Bangladeshi Taka) by the end of June—an increase of $2.01 billion (248.18 billion Bangladeshi Taka)—distribution remains uneven. Dhaka held 67.84% of total loans, while Chattogram accounted for a significant share, leaving other divisions with negligible portions.

In regions like Patuakhali, where total loans reached only $280.13 million (34.58 billion Bangladeshi Taka), deposits were significantly higher at $573.54 million (70.80 billion Bangladeshi Taka). Similarly, Satkhira and Sunamganj reported only 0.24% and 0.13% of total lending, respectively, despite their vulnerability to cyclones and floods.

Climate shocks threaten lives and livelihoods in Bangladesh, with disasters potentially destroying crops, homes, and businesses in mere days. The World Bank categorizes Bangladesh as highly susceptible to climate-related risks, urging for targeted financing in vulnerable sectors. The Bangladesh Delta Plan 2100 identified 58 out of 64 districts as highly vulnerable, yet formal lending continues to prioritize established commercial centers over areas in dire need of support.

For adaptation efforts to succeed, local businesses and populations require access to affordable financing that fosters resilience against climate change. Md Shamsuddoha argues that easy-to-access, low-interest loans are crucial for sustaining agriculture and local economies.

Arief Hossain Khan, a spokesperson for Bangladesh Bank, noted that the focus on major commercial hubs reflects the concentration of industries in those areas. A shift is necessary to explore opportunities in underserved regions to encourage local economic development.

Industry leaders like Syed Mahbubur Rahman from Mutual Trust Bank PLC acknowledge that the extreme concentration of bank lending influences regional economic activity, while adaptation projects often lack predictable returns, complicating investment.

Masrur Reaz from Policy Exchange Bangladesh stresses that targeted private financing is essential to support vulnerable communities in investing in climate-resilient livelihoods. He believes that a more geographically balanced financing system would enhance both the economic and climate resilience of Bangladesh.