Rising living costs, stagnant wages, and shrinking household savings are pushing a large section of Bangladesh’s low- and middle-income population into a deepening cycle of debt, according to affected families, field observations, and expert analyses.
From medical emergencies to education expenses, wedding costs, and daily grocery needs, households are increasingly relying on loans from informal moneylenders, NGOs, banks, or selling assets such as land and livestock. Economists warn that the trend is turning into a structural vulnerability with long-term social and economic consequences.
“We are living from loan to loan”: Across districts including Sirajganj, Gazipur, Dhaka, and rural areas in northern Bangladesh, families describe a similar pattern: income is not increasing in line with expenses, and any unexpected shock immediately pushes them into borrowing. Sirajganj farmer Abdul Karim said he first entered debt after a medical emergency in his family. “Two years ago my wife fell seriously ill. I had to take loans for treatment. Later I sold my land to repay those loans. Now I have taken new loans again for my son’s education,” he told The Daily Industry.
Similarly, garment worker Rubina Akter from Gazipur said rising costs have erased any benefit from wage adjustments.
“Even though my salary increased slightly, expenses have gone up much more. Whenever there is an emergency, I borrow from relatives or NGOs. I repay one loan by taking another,” she said.
In Dhaka’s Dholai Para area, private employee Altaf Hossain described a monthly struggle that leaves no room for savings. “After the 20th of every month, it becomes impossible to manage expenses. Rent, children’s school fees, and grocery bills take everything. I end up borrowing from acquaintances every month,” he said.
Sharp rise in cost of living deepens pressure: Food inflation, housing costs, healthcare expenses, and education fees have all increased significantly in recent years, while wage growth has remained modest.
A report cited by The Daily Industry notes that prices of rice, lentils, edible oil, vegetables, fish, and meat have risen multiple times over the past few years. At the same time, rent in urban areas has increased sharply, putting additional pressure on salaried workers.
“Life has become a continuous cycle of rising expenses without matching income growth,” wrote The Daily Industry in its editorial observation. “Families that once managed to save even a small amount are now struggling to survive the month.”
Experts warn of “silent debt crisis”: Economists say the country’s lower-middle and middle-income groups are increasingly trapped in informal and formal debt cycles, often without financial resilience or emergency savings.
Dr. Mustafa K. Mujeri, former Director General of the Bangladesh Institute of Development Studies (BIDS) and former Chief Economist of Bangladesh Bank, described the situation as a “silent but expanding debt crisis.”
“Rising cost of living is quietly pushing many families into debt. The biggest pressure is in three areas-healthcare, education, and daily necessities,” Dr. Mujeri told The Daily Industry. He added that without structural reforms, the problem will worsen.
“We need effective policy interventions to control healthcare, education, and essential commodity costs. At the same time, social protection must be expanded. On a household level, financial planning and a culture of savings must be encouraged,” he said.
Healthcare costs driving families into poverty: One of the most critical drivers of household debt is medical expenditure. Families often face catastrophic health spending when a member falls ill, forcing them to sell land or borrow at high interest rates. In many cases, patients are unable to access beds or affordable treatment in public hospitals, pushing them toward expensive private clinics.
A recent study referenced by The Daily Industry suggests that a significant portion of the population falls below the poverty line each year due to out-of-pocket medical expenses.
Garment worker Rafiqul Islam shared his personal experience of medical debt: “My wife needed surgery for a uterine condition costing 100,000 taka. I had no savings, so I borrowed from a village moneylender at very high interest. Now the monthly interest alone is half of my salary,” he said.
Economists say such cases are becoming increasingly common, particularly among informal workers who lack health insurance or emergency funds.
Weddings and social pressure fuel hidden borrowing: Beyond essential needs, social expectations-especially around weddings and family ceremonies-are also contributing to debt accumulation.
In many rural communities, families feel pressured to spend beyond their means to maintain social dignity. This often leads to the sale of agricultural land or homestead property.
The Daily Industry observed that: “Marriage ceremonies have become a financial burden rather than a celebration, pushing families into long-term debt.”
Experts warn that such culturally driven spending patterns are worsening financial vulnerability and reducing productive assets in rural households.
“We are losing our only assets”: Financial distress is often followed by asset liquidation. Many families reported selling land or other productive resources to repay loans or meet urgent needs.
Once assets are sold, income-generating capacity declines further, trapping households in a downward spiral. A rural sociologist noted that this trend is creating a new class of “asset-less poor” who previously belonged to stable lower-middle-income groups.
Social consequences: stress, despair, and rising risks: The psychological burden of debt is also increasing. Families report stress, anxiety, and social humiliation due to unpaid loans and mounting interest. In extreme cases, experts warn that financial pressure contributes to mental health crises.
A development analyst quoted by The Daily Industry said: “Debt stress is no longer just an economic issue-it is becoming a major social and mental health concern.” While direct causal links vary, anecdotal reports suggest increasing distress among households unable to repay loans.
Policy gaps and structural challenges: Economists argue that Bangladesh’s current economic structure is not sufficiently protecting vulnerable income groups from inflation and shocks. Key challenges include: High out-of-pocket healthcare costs, Rising education expenses in private institutions, Limited access to affordable credit, Weak social safety nets for urban informal workers, Inflationary pressure on essential commodities.
Without reforms, experts warn that household debt dependence will continue to grow. The need for financial resilience: Experts emphasize the importance of building financial resilience at both policy and household levels. This includes strengthening social protection programs, expanding health coverage, and improving access to low-cost formal credit.
Dr. Mujeri stressed that preventive measures are essential: “If we fail to address structural cost pressures now, debt dependency will become a long-term feature of our economy,” he said.
A fragile balance between income and survival: For millions of families, daily life has become a struggle to balance income against rapidly rising expenses. With savings depleted and borrowing increasing, many households are now living on the edge of financial instability.
As The Daily Industry concludes: “When survival depends on debt, economic growth loses its meaning for ordinary people.” Unless systemic reforms address cost pressures and income stagnation, economists warn that Bangladesh risks deepening inequality and expanding a vulnerable debt-dependent population across both rural and urban areas.
