Business concepts with backgrounds of Bangladesh currency (credit Wara1982 via Getty Images)
Where finance fails: Mapping financial exclusion in Bangladesh
While Bangladesh’s banking system has grown rapidly, access to finance remains deeply unequal, with savings and credit access concentrated in large cities. A new project maps these spatial and temporal imbalances in financial inclusion, using detailed data on deposits and lending. The findings offer vital insights for policymakers seeking to build a more inclusive financial system.
Over the past five decades, Bangladesh’s banking network has expanded dramatically – from just over a thousand bank branches in 1971, to more than 11,000 today. This growth reflects an ambitious national effort to deepen financial access and accelerate development. Yet, the expansion hides a persistent reality – access to finance remains highly uneven.
Who is left behind? Creating a map of financial exclusion in Bangladesh
A recent study by the Policy Research Institute of Bangladesh (PRI), with support from the Bangladesh Bank and the International Growth Centre (IGC), maps this imbalance.
This project emerged from a shared recognition that, to craft a financially inclusive policy framework, we need to identify and understand the dynamics of the unbanked and underbanked areas. In essence, understanding who is included and who is left behind is crucial for addressing spatial and temporal patterns of financial exclusion.
To this end, Bangladesh Bank, in consultation with PRI, has established a dedicated unit to compile standardised data for critical banking services, both spatially and historically. This includes not only sub-district (upazila) level panel data on selected banking indicators, but also selected data from over 11,300 branches, including: deposit volumes, loan amounts, account numbers, GPS coordinates, and the year the branch was established.
Upazila and branch-level data from 2019 to 2024 reveal both structural and spatial financial exclusion – projecting a financial system concentrated around a few urban centres, marked by regional disparities and asymmetric capital flows.
Financial access has deepened – without equitable access to credit
At the national level, the data underscores an uncomfortable reality – while the number of bank accounts has grown, access to credit remains highly concentrated. Just 0.1% of deposit accounts hold over 40% of total deposits, and 1.2% of loan accounts absorb more than 75% of total lending.
Dhaka and Chittagong dominate the system, holding 65% of deposits and 78% of loans disbursed in 2024, despite accounting for less than one-third of deposit accounts.
The disparity deepens when we examine the spatial variation in per capita terms. Per capita deposits in Dhaka exceed BDT 600,000 – six times the national average – while they remain below BDT 100,000 in over 60 districts, and below BDT 50,000 in 44 districts. Lending shows a similar pattern – more than 59 districts have per capita loan values under BDT 50,000, compared to BDT 650,000 in Dhaka and BDT 250,000 in Chittagong.
Our analysis also reveals that many districts are net savers, depositing more than they borrow. Dhaka absorbs much of this net capital transfer to meet its growing credit demand, suggesting that peripheral regions end up financing the economic activities of the core.
Some lagging north-western districts experience positive capital transfers – likely due to targeted agricultural lending by state-owned banks, which have a more even geographic spread than private bank branches, which are clustered in the wealthier eastern districts. In addition, over 90% of industrial lending is concentrated in Dhaka and Chittagong, whereas agricultural credit is more evenly distributed.
Figure 1: Spatial location of State-owned and private bank branches in 2024
Notes: These maps illustrate the regional disparities in the distribution of bank branches in Bangladesh. State-owned banks have a more even national presence, while private banks are clustered around Dhaka, Chittagong, and other wealthier eastern districts. Figure generated by the authors.
Is financial expansion reaching underserved districts?
Between 2019 and 2024, most districts witnessed increases in deposit and loan volumes and account numbers. However, this growth hides a more uneven development story: over 120 upazilas recorded a decline in the number of loan accounts, and 46 upazilas saw declines in deposit accounts.
This divergence in deposit mobilisation and credit access suggests that bank branches in remote areas are predominantly mobilising savings rather than acting as facilitators of financial intermediation.
Private commercial banks have also expanded disproportionately in the relatively affluent Dhaka, Chittagong, and Sylhet, while large regions in the southwest, north-west, and hill tracts remain underserved.
What policy interventions can close the gap in financial inclusion?
At a national dissemination workshop organised by PRI and IGC, the Governor of Bangladesh Bank, Dr. Ahsan Mansur, acknowledged the core finding of the report: while Bangladesh has successfully expanded its financial infrastructure, it has failed to ensure financial equity.
In order to mitigate the perils of financial exclusion as observed in the analysis, there is a need to optimise service delivery through digital finance, agent banking, and gender-responsive innovations.
Participants called for greater transparency, stronger regulatory oversight of regional credit disparities, and broader access to granular data, including loan default rates, sector-wise credit flows, and gender-disaggregated data. Suggestions also included strategically deploying state-owned banks to regions with low loan-to-deposit ratios, introducing nano-loans, and scaling up mobile financial services (MFS) to reach previously unbanked areas.
Furthermore, the workshop emphasised the need to construct more granular datasets – both spatially and historically – to enable a more accurate understanding of what determines financial exclusion. Such data, participants noted, could play a vital role in democratising access to finance and informing targeted policy interventions.
Leveraging data to move towards an inclusive financial future
Despite five decades of expansion, large parts of Bangladesh remain financially excluded from credit. To address this, policymakers must move beyond infrastructure and embrace equity as a core principle of the country’s financial architecture. That means regulating for redistributive lending, deploying public banks strategically, and leveraging digital innovation for both efficiency and reach.
The creation of a publicly accessible, spatially disaggregated financial database would be a landmark for policy-research collaboration in Bangladesh – bringing transparency, accountability, and evidence into the heart of financial sector governance.
PRI and Bangladesh Bank aim to create a spatially and historically rich dataset – extending back to 1971 – on the expansion of formal banking services. Through this collaboration, they also aim to create datasets that capture the spatial outreach of MFS providers, agent banks, microfinance institutions, and non-bank financial entities.
This holistic mapping of Bangladesh’s financial ecosystem will enable deeper research on how financial access shapes poverty reduction, regional development, the emergence of financial hubs, and even climate resilience.
It will also help understand the factors that underscore spatial financial exclusion and explore the critical relationship between climate shocks and financial development.
An inclusive financial system is not just a development goal; it is a social imperative. This project, through its rigorous mapping of financial flows, acts as a vital first step in charting the way forward, and offers critical insights into the nature and intensity of financial exclusion in Bangladesh.
Learn about our work in Bangladesh