Financing Healthcare Sustainability Through Responsible Banking: A Policy Framework for Bangladesh

Abstract

Bangladesh's health system faces a dual sustainability crisis. On the financing side, public health expenditure has remained below one per cent of GDP for two decades, while out-of-pocket payments account for roughly two-thirds of total health spending — among the highest ratios in South Asia — pushing households into poverty and stalling progress toward Universal Health Coverage. On the environmental side, healthcare is a globally carbon-intensive sector whose facilities, energy use and supply chains contribute materially to emissions even as the sector's mission is to protect health. This paper argues that responsible banking — the alignment of lending and investment with sustainability objectives under frameworks such as the UN Principles for Responsible Banking, and, domestically, Bangladesh Bank's Sustainable Finance Policy — offers an underused channel for addressing both dimensions simultaneously. Using a review of national budget documents, central-bank circulars, capital-market records and international benchmarks from 2016 to 2025, the paper maps the instruments through which responsible finance can mobilise capital for resilient, low-carbon and financially inclusive healthcare: green and social bonds, sustainability-linked loans, concessional green refinancing, blended finance and health micro-insurance. It finds that Bangladesh has built credible sustainable-finance rails — including four concessional refinancing funds and a pioneering green-bond framework — but has yet to direct them deliberately at the health sector. The paper concludes with a set of policy recommendations to bridge the health-financing gap through responsible banking while safeguarding against greenwashing and inequitable access. Medicine Today 2026, Vol.38 (2): 319-323