Bangladesh’s Default Loan Crisis: Who Is Really Responsible?
Reports are now emerging that Bangladesh has the highest rate of non-performing loans in the world. But who is responsible for this? The BNP government’s old refrain—“Blame everyone else, especially Sheikh Hasina”—seems to be playing once again.
Instead of political rhetoric, let’s look at the actual figures reported by Bangladesh Bank.
When the BNP-Jamaat government was ousted in 2007, non-performing loans accounted for 13.2% of total outstanding loans. At the time, the total volume of loans was approximately Tk 1.52 trillion.
Over the Awami League government’s 16 years in office, the size of the economy expanded significantly. Total outstanding loans increased to approximately Tk 18.21 trillion—nearly a 12-fold increase.
Yet despite the massive expansion in the volume of lending, the non-performing loan ratio actually declined. By March 2024, it had fallen to 11.11%, lower than the 13.2% recorded in 2007.
Then what happened?
During the Yunus government, within just a few months, the non-performing loan ratio surged, reaching 20.20% by December 2024. And most recently, under Tarique Rahman, it has climbed even further to 32.26%.
So, if the volume of loans increased nearly 12-fold during the Awami League’s 16 years while the NPL ratio still fell from 13.2% to 11.11%, how did it suddenly surge to 32.26% in just two years under the “Yunus–Tarique magic”?
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