Bangladesh’s formal financial sector can be broadly segmented into two buckets: formal and others. The formal sector can again be subdivided into four categories. Microfinance, Insurance, Banks and NBFIs. As of today, the sector consists of 59 scheduled commercial banks with 3 new banks recently approved by the Bangladesh Bank, taking the tally up to 62. Other than that, a host of Non-Bank Financial Institutions (NBFIs) and specialized financial institutions operate in the market.
For both short and long term investments, investors typically access the formal markets to draw loans for working capital, syndication and trade financing. Some local and foreign institutions also have access to on- and off-shore funding facilities within Bangladesh.
Apart from raising debt-based funding, investors may also consider securing equity-based financing from the country’s capital market. Bangladesh currently has two stock exchanges that are growing in tandem with the country’s growth. As of May 2019, 583 companies are listed on DSE alone with a market capitalization of USD 45.9 billion (~BDT 3.8 trillion). The government has preferential policies for encouraging companies to list in the country’s bourses and take advantage of benefits such as tax breaks for sector-specific companies.