Rising Regional Inequality: Financial Flows Concentrated in Dhaka–Chattogram, Other Regions Lag Behind

Over the past few decades, Bangladesh has achieved significant economic progress. Industrialisation, export growth, infrastructure development and remittance inflows have collectively strengthened the country’s overall economy. However, beneath this progress, an important reality is becoming increasingly evident: development has not yet spread evenly. Instead, financial activity and investment flows remain concentrated around a limited number of urban centres.

An analysis of the latest quarterly report of Bangladesh Bank (October–December 2025) shows that by December 2025, total deposits in the country stood at approximately 20,053,38 crore taka, while total outstanding loans reached around 17,773,16 crore taka. This substantial flow of money reflects the economy’s growing capacity, but its geographical distribution reveals deep-seated inequality.

Urban vs Rural: The Core Divide

Nearly 84 per cent of total deposits are held in urban areas, while rural areas account for only 16 per cent. The disparity in credit distribution is even more pronounced—around 92 per cent of all loans are concentrated in urban regions, leaving rural areas with just 7–8 per cent.

This clearly indicates that banking services, investment opportunities and credit facilities are predominantly urban-centric. As a result, rural economies are being deprived of essential financial support, hindering the growth of local entrepreneurs and small businesses.

Divisional Inequality: A Dhaka-Centric Economy

Divisional statistics further highlight the scale of regional imbalance:

The data shows that Dhaka Division alone controls more than 60 per cent of total deposits and nearly 67 per cent of total credit. In effect, the country’s financial system remains heavily centralised in Dhaka.

Chattogram holds the second position, yet the gap with Dhaka remains substantial. Due to its seaport, international trade and industrial base, economic activity in Chattogram is relatively stronger.

Khulna and Rajshahi occupy mid-level positions, while Sylhet, Barishal, Rangpur and Mymensingh lag significantly behind. Mymensingh’s particularly low share highlights a clear example of regional imbalance.

Structural Causes of Inequality

Several deep-rooted structural factors lie behind this disparity:

• Industrial and corporate concentration: Most industries, corporate headquarters and financial institutions are based in Dhaka.
• Port-driven economy: Chattogram serves as the main hub for international trade due to its seaport.
• Infrastructure advantages: Better roads, electricity, communication networks and skilled labour are more readily available in major cities.
• Investment behaviour: Investors prefer established economic centres to minimise risk.
• Geographical clustering of industries: The ready-made garment sector is largely concentrated in Gazipur, Narayanganj and Savar.

Why This Is Concerning

If left unaddressed, this imbalance may lead to several long-term economic and social challenges:

1. Widening regional disparity: Concentration of development in limited areas leaves others further behind, disrupting overall balance.
2. Weak rural economy: Lack of credit and investment restricts the growth of local industries and entrepreneurship.
3. Excessive urbanisation: Increased migration from rural areas to cities intensifies housing shortages, traffic congestion and pollution.
4. Pressure on infrastructure: Urban centres like Dhaka face mounting strain on electricity, water supply, transport and healthcare systems.
5. Limited national potential: Agricultural resources, natural wealth and human capital in other regions remain underutilised.

International Experience

Countries such as South Korea, Malaysia and Vietnam initially experienced city-centred development but later achieved regional balance through industrial decentralisation and investment redistribution. These experiences offer valuable lessons for Bangladesh.

The Way Forward: Toward Balanced Development

To address the issue, several policy measures are necessary:

• Decentralisation of industry: Establish new industrial zones and economic hubs at divisional and district levels.
• Financial inclusion: Expand easy-access credit, SME financing and digital banking in rural areas.
• Infrastructure development: Improve roads, railways, electricity and communication networks nationwide.
• Local entrepreneurship support: Provide incentives for agriculture-based and small-scale industries.
• Administrative decentralisation: Extend government services and institutions beyond the capital.

Conclusion

Although Bangladesh’s economy stands on a strong foundation, clear geographical imbalances persist in its distribution. If development continues to remain concentrated in a few centres such as Dhaka and Chattogram, it may become a major obstacle to sustainable long-term growth.

Therefore, for inclusive and sustainable development, it is essential to create equal economic opportunities across all regions of the country. Development will only become meaningful when it reaches people at every level—beyond geographical boundaries and on the basis of equity.

Author: Senior Banker