Bangladesh Bank’s latest report shows a steep decline in consumer loans during the July–September 2025 quarter, with total outstanding loans falling by over Tk 22,000 crore compared to the previous quarter. At the end of September, consumer loans stood at Tk 1,50,340 crore, representing 8.63% of total bank credit, down from Tk 1,72,621 crore or 9.95% in June. This marks a sharp reversal from the April–June quarter, when consumer lending had increased by nearly Tk 25,000 crore.

Economists and banking officials attribute the contraction to persistently high inflation, rising borrowing costs, and continued economic uncertainty following political transitions. Interest rates on personal loans now range between 11% and 14%, while credit card rates have reached up to 25%. The largest declines were seen in loans for electronics, vehicles, and housing.

Analysts warn that reduced consumer borrowing could further dampen domestic demand, slowing retail and service sectors. The central bank is expected to monitor credit trends closely as inflationary pressures and liquidity constraints continue to challenge household spending.