Bangladesh’s CMSME lending shifted toward trade by the end of March this year, with 44.93% of loans going to the sector, above the central bank’s 40% ceiling. Manufacturing received 34.96%, below the minimum 40% target, while services received 20%. The allocation highlights a move away from the financing goal of expanding production capacity among cottage, micro, small and medium enterprises.

A senior Bangladesh Bank official said banks are more comfortable lending to traders because repayment risk is relatively easier to assess. The central bank, however, aims to reduce trade lending and increase financing for production and manufacturing. Former BIBM director general Taufiq Ahmad Chowdhury said greater lending to manufacturing and services is needed to strengthen production, technological capacity and employment.

CMSME loan outstanding fell from Tk314,273 crore at the end of 2025 to Tk298,089 crore at the end of March. Banks disbursed Tk52,108 crore in the first three months, while recoveries totalled Tk65,291 crore. Non-performing CMSME loans reached 26.04% in March. Bangladesh Bank issued a circular on February 12 for a separate cluster-based industry fund, whose full amount is intended for manufacturing.