Dhaka, Nov. 1 -- Banks' lending to small and medium-sized enterprises (SMEs) has dropped to a four-year low, halting the upward trend in loan disbursements as political uncertainty and an economic slowdown dampen entrepreneurs' borrowing appetite.

During fiscal year 2024-25, banks disbursed Tk 2.05 lakh crore in SME loans, down 9 percent from the previous year, according to Bangladesh Bank (BB) data.

"Businesses do not want to invest in times of uncertainty. Right now, firms are focused on survival, not expansion," said Syed Abdul Momen, additional managing director and head of SME Banking at BRAC Bank PLC, one of the country's leading SME financiers.

SMEs, which include around 78 lakh cottage, micro, small, and medium enterprises, are...