Where finance fails: Mapping the geography of financial exclusion in Bangladesh
This study analyses banking trends across Bangladesh from 2019 to 2024, revealing strong urban concentration in financial access and persistent regional disparities. Using detailed sub-district data, it highlights the need for targeted policies, better data use, and innovative tools like agent banking to promote equitable credit distribution.
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Rahman-Majid-Anabil-Policy-Brief-August-2025.pdf
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- This study maps the evolution and distribution of core banking indicators across districts and sub-districts in Bangladesh, using data from 2019 to 2024.
- Bangladesh’s formal financial infrastructure has expanded significantly since 1971, yet financial access remains highly uneven across regions. The study creates the most granular sub-district-level dataset to date, covering deposits, loans, account sizes, and net capital flows.
- Findings reveal a financial system heavily concentrated in a few urban centres, with persistent structural and spatial exclusion. For instance, 1.2% of loan accounts absorb more than 75% of total lending. Moreover, Dhaka and Chittagong dominate the system, holding 65% of deposits and 78% of loans disbursed in 2024.
- This spatial and temporal analysis between 2019 and 2024 also underscores a concerning uneven story: over 120 Upazilas recorded declines 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 dominantly mobilising savings and not acting as facilitators of financial intermediation.
- This brief recommends creating and using more granular-level financial sector data to inform targeted policies to support spatial equity in credit allocation and guide further research. It also recommends using state banks more effectively and exploring other instruments such as agent banking and MFS-driven nano loans to reach underserved areas.