Bangladesh experienced a significant drop in foreign loan disbursements during the first quarter of the 2026-27 fiscal year, receiving $662 million between July and September, according to provisional data from the Economic Relations Division (ERD). This amount marks a 42 percent decrease compared to the $1.14 billion disbursed in the same period of the previous year.

The data indicates that while most bilateral and multilateral lenders did not make new financing commitments during this quarter, the Islamic Development Bank (IsDB) was a notable exception. In September, Bangladesh secured a $1 billion financing agreement with the IsDB aimed at modernising and expanding Eastern Refinery Limited, the country’s sole oil refinery. Japan also pledged funds, committing $3.5 million, contributing to an increase in total financing pledges despite the overall decline in disbursements.

Among the institutions providing disbursements, the International Development Association (IDA), a branch of the World Bank Group, was the largest contributor in this period, releasing $196 million. The Asian Development Bank followed with $118 million, while India provided $105 million, according to ERD figures.

The reduction in loan inflows represents a continued downturn, with foreign financing inflows declining for the third consecutive month. Bangladesh, classified as a least developed country, relies partly on foreign loans to support its development and financing needs.

Meanwhile, loan repayments increased by 5.6 percent year on year, rising to $1.35 billion during the July-September period. For the full fiscal year 2025-26, Bangladesh received $8 billion in foreign financing, down from $8.57 billion the previous year. Loan repayments during this period also rose, reaching $4.49 billion—an increase of nearly 11 percent compared with the prior fiscal year.