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Homeঅর্থনীতিADB approves $150m for small enterprises in Bangladesh

ADB approves $150m for small enterprises in Bangladesh

ADB approves $150m for small enterprises in Bangladesh

 

DHAKA, Nov 18, 2021 (BSS) –

 

The Asian Development Bank (ADB) has
approved a $150 million loan to Bangladesh to provide financing for cottage,
micro, and small-sized enterprises (CMSEs) operated by youth, returning
migrant workers and rural entrepreneurs, particularly women, who have been
hit hard by the COVID-19 pandemic.

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 aims to facilitate employment creation and help these
vulnerable groups recover from the adverse impact of the COVID-19 pandemic,
said a press release.

The release said youth unemployment remains in the country, and they are
more severely affected as they concentrate in sectors such as retail trade,
accommodation, and food services, which were worst hit by the pandemic.

About 400,000 overseas migrant workers have returned since the start of
the pandemic, and many remain unemployed. Rural incomes have stayed depressed
and nonfarm employment opportunities remain limited. Rural enterprises were
severely affected, putting further pressure on rural employment.

“ADB supports the Bangladesh government’s long-term strategy to tackle
the country’s employment challenges, which has been exacerbated by the
pandemic,” said ADB Principal Financial Sector Specialist for South Asia
Dongdong Zhang.

“Promoting access to finance will help address a critical challenge of
helping vulnerable groups in the immediate term and developing CMSEs in the
long term,”Zhang added.

Given the limited access of women to finance and their high
concentration in retail, travel, and hospitality sectors, they have borne
brunt of the impact of the pandemic. The project has targeted to disburse 20
percent of the funds to microbusiness led by women to support their recovery.

ADB will provide an additional $900,000 technical assistance grant from
its Technical Assistance Special Fund for Bangladesh Bank and PFIs 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.

This project builds on the $250 million policy-based Strengthening
Social Resilience Program, approved by ADB in June 2021, to strengthen
Bangladesh’s social protection programs and resilience of vulnerable groups.

It also complements the $50 million additional financing to the ongoing
Microenterprise Development Project, approved in December 2020, to help
restore economic activities of microenterprises affected by COVID-19 in the
country.

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