The Role of Banking and Financial Institutions in the Tourism and Hospitality Industry in Bangladesh

The tourism industry has been contributing significantly to the national economy of any country, including Bangladesh. In recent years, beach tourism, historical tourism, natural tourism, medical tourism, apparel tourism, agricultural tourism, education tourism, entertainment tourism, and sports tourism, etc. have emerged as potential sources of income due to the many scenic and natural beauties of Bangladesh. Nevertheless, these emerging tourism niches require special attention and investment from both the public and private stakeholders. To promote the tourism industry globally, it is important to improve pertinent logistics and infrastructure, including banking and financial services. Hence, this chapter reviews and explores the role of banking and financial intermediaries to facilitate and invest in the tourism and hospitality industry so that this industry can flourish rapidly and contribute significantly to the socio-economic development process of Bangladesh. In so doing, secondary sources of data were collected and analyzed in this study. Our findings revealed that banks and financial institutions need to design travelers’ friendly products and services. To date, the banking system in Bangladesh has very limited tourism-related products such as credit card facilities. Most of the lending facilities are a consumer and small and medium-sized enterprises (SME) loans. Therefore, proper banking rules and regulations should be put in place to integrate tourism-friendly products and services. Ultimately, the partnership between the bank and the tourism industry will contribute to the promotion of the tourism industry of Bangladesh.