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BSS
  29 Nov 2021, 18:00

ADB approves $150m for small enterprises to create jobs

   DHAKA, Nov 29, 2021 (BSS) - The Asian Development Bank (ADB) and the 
government of Bangladesh today signed agreements for $150 million in loan to 
provide financing for cottage, micro, and small-sized enterprises (CMSEs) to 
create jobs for promoting socio-economic recovery after the COVID-19 
pandemic.

   The assistance under the Supporting Post-COVID-19 Small-Scale Employment 
Creation Project will rejuvenate CMSEs operated by youth, rural 
entrepreneurs, returning migrant workers, particularly women, who have been 
hit hard by the pandemic.

   Fatima Yasmin, Secretary, Economic Relations Division (ERD), and Edimon 
Ginting, Country Director, ADB, signed the agreements on behalf of Bangladesh 
and ADB, respectively held at a ceremony at ERD in the capital, said an ADB 
press release.

  "The assistance will support government's efforts to accelerate 
socioeconomic recovery from the COVID-19 pandemic," said Fatima Yasmin, 
Secretary for ERD.

  "This project will reinforce ADB's long-standing support to Bangladesh in 
financial inclusion and address key barriers for financing CMSEs by 
developing a comprehensive action plan that will tackle sector-wide 
challenges, promote best practices at the banks, and expand training and 
business development support to the borrowers," said Country Director Edimon 
Ginting.

  "The project will also balance the affordability and availability of loans 
in addition to adopting innovative approaches so that lower loan interest 
rates do not disincentivize banks' lending to CMSEs," Ginting added.

   The loan to Bangladesh Bank, the nation's central bank, will be on-lent to 
participating financial institutions (PFIs), which in turn will help 30,000 
CMSEs operated by the beneficiaries. 

   The project will create at least 45,000 employment opportunities by 
December 2025. It has targeted to disburse 20 percent of the funds to micro 
business led by women to support their recovery as they have limited access 
to finance and have severely been affected by the pandemic due to their high 
concentration in retail, travel, and hospitality sectors.

   ADB will provide an additional $900,000 technical assistance grant from 
its Technical Assistance Special Fund for Bangladesh Bank and participating 
financial institutions to help them strengthen their risk management 
capacities, business process, and information systems. 

  The assistance will also boost their support of CMSEs by incorporating 
mobile finance, value chain financing, and sustainable financing tackling 
climate change.


 

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