Women in focus

Bangladesh's banking sector is witnessing a significant transformation as sustainable finance and green lending gain strong momentum. With climate challenges intensifying and inclusive growth becoming a national priority, banks and financial institutions are not only aligning themselves with regulatory mandates and global sustainability standards but are also placing stronger emphasis on women entrepreneurs. By directing green and sustainable finance towards women-led enterprises, the sector is opening doors for women to play a central role in building a greener, more resilient economy.

The central bank's policies requiring banks to allocate at least 5% of their previous year's net outstanding loans to green finance and 40% to broader sustainable finance have created a solid framework for progress. Robust Environmental and Social Risk Management (ESRM) practices further ensure that financing decisions promote both ecological balance and social equity.

Since 2021, this sector has grown steadily, channelling billions of taka into renewable energy, energy efficiency, green buildings, sustainable agriculture, and other climate-friendly ventures. In 2024 alone, banks and non-bank financial institutions (NBFIs) disbursed BDT 30,653 crore as green finance and BDT 459,483 crore as sustainable finance, compared to BDT 19,304 crore and BDT 197,369 crore, respectively, in 2023. This rapid growth reflects an evolving mindset where sustainability is no longer optional but central to banking strategies.

To ensure inclusivity, Bangladesh Bank issued a directive on March 17 instructing all banks and financial institutions to allocate 20% of their green financing to women entrepreneurs and 25% to cottage, micro, small, and medium enterprises (CMSMEs). Additionally, 15% of CMSME loans must be distributed among women entrepreneurs. This policy underscores the government's commitment to gender equality, inclusive development, and the Sustainable Development Goals (SDGs).

Private banks are taking active roles in implementing these measures. Highlighting their initiatives, Mashrur Arefin, Managing Director & CEO of City Bank, explained, "To support SMEs, women entrepreneurs, and environmentally responsible businesses, we help them access low-cost loans offered by Bangladesh Bank, as well as concessional financing for projects that are environment-friendly or that address climate resilience and disaster management."

Through its women-focused division, City Alo, City Bank goes beyond traditional banking by offering financial literacy programmes, capacity-building initiatives, and networking opportunities. It also facilitates access to three major refinance schemes from the central bank, ensuring women entrepreneurs receive both financial and institutional support.

BRAC Bank also remains a key player in SME refinancing, providing funds through schemes such as the TARA Refinance Scheme for Women Entrepreneurs, the Tk. 25,000 crore Pre-Finance Facility (SMTLR), Agro-Processing Refinance, and New Entrepreneur Refinance. As Tareq Refat Ullah Khan, Managing Director & CEO (Current Charge) of BRAC Bank, noted, "In addition, we access specialised programmes such as the ADB-supported and SME Foundation funds, which allow us to reach women entrepreneurs, new business starters, agro-based industries, and low-income professionals."

Despite this progress, challenges remain. The level of financing for women entrepreneurs and CMSMEs is still below expectations. The central bank has repeatedly stressed the importance of scaling up efforts to achieve meaningful inclusivity in sustainable finance.

Ahsan Zaman Chowdhury, Managing Director & CEO of Trust Bank, pointed out the gap: "Currently, achievement of sustainable and green banking is far behind the desired level of the country. Cumulative effort from all the stakeholders — i.e. borrowers, banks/financial institutions, regulatory authorities — as well as consumers' understanding regarding the importance and implementation is necessary."

Trust Bank is addressing this challenge through products like Trust Nondini, which provides women entrepreneurship loans for setting up or expanding businesses, and Trust Ekota, designed for groups of small entrepreneurs such as artisans, potters, and agro-based producers who are often deprived of traditional bank loan facilities.

Optimism for the future remains strong. A K M Shahnawaj, Managing Director (Current Charge) of Dhaka Bank, expressed confidence in Bangladesh's potential as he said, "With increasing awareness, advancing technical capacity, and evolving transition finance, we are confident that Bangladesh is well positioned to scale sustainable finance significantly to meet its climate and Sustainable Development Goals. The progress so far inspires optimism for a green and resilient future."

Dhaka Bank promotes inclusive growth by providing targeted financing for rural businesses, marginal traders, and women entrepreneurs, sometimes at concessional rates as low as 5%. Its Oditiya Loan specifically caters to women entrepreneurs, helping them establish stronger footholds in the economy.

Ali Reza Iftekhar, Managing Director of EBL, emphasised that sustainability is not just about financing but also about empowerment. He said, "Inclusiveness is central to our sustainable finance strategy. We actively utilise Bangladesh Bank's refinancing schemes and have already disbursed over BDT 200 crore to renewable energy, energy efficiency, and waste management ventures."

He added that EBL partners with NGOs to design tailored refinancing solutions for grassroots entrepreneurs. "Our vision is clear: make sustainable finance accessible not just to large corporates, but also to SMEs, women entrepreneurs, and innovators driving change from the ground up," he further added.

This sentiment is echoed by Mohammad Ali, Managing Director & CEO of Pubali Bank, who placed special emphasis on women's empowerment. He emphasised, "Our sustainable finance or green finance is open to everyone. However, in our economic context, we want to work with women — that's the most important aspect."

From renewable energy projects to grassroots entrepreneurship, from concessional refinancing to gender-focused credit schemes, green and sustainable finance is steadily broadening its scope. While challenges remain, especially in fully realising inclusivity for women entrepreneurs and CMSMEs, the combined efforts of regulators, banks, and development partners indicate a strong foundation for progress.

With the right mix of policy, innovation, and collaboration, Bangladesh is on track to create a financial ecosystem that not only fuels economic growth but also safeguards the environment and empowers marginalised groups, ensuring a more resilient and sustainable future.