Sustainable Housing Finance: Role of Islamic Banks in Bangladesh

Abstract

The demand for sustainable housing in Bangladesh is increasing as the country experiences rapid urbanization. This study investigates the role of Islamic banks in facilitating green housing finance, a critical yet underexplored aspect of the region’s economic development. The novelty of this work lies in its focus on Islamic banking’s contribution to sustainable development goals through housing finance, an area with significant potential for strategic impacts on both environmental sustainability and economic growth. Utilizing a mixed-methods approach, we collected primary data through surveys of 400 borrowers and secondary data from bank reports and industry publications within the Chittagong Division. Current analysis reveals that Islamic banks are pivotal in meeting the growing demands for eco-friendly housing by providing innovative financial solutions that align with Shariah principles. The findings indicate that Islamic banks not only enhance borrower satisfaction but also stimulate market growth for sustainable housing. This study contributes to the broader discourse on green finance and proposes strategic recommendations for policymakers and financial institutions aiming to expand green housing initiatives.