ADB gives $150m to Covid-hit small ventures in Bangladesh

The Asian Development Bank (ADB) and the government Monday signed agreements for $150 million in loans to provide financing for cottage, micro, and small-sized enterprises (CMSEs).

Fatima Yasmin, secretary at Economic Relations Division (ERD), and Edimon Ginting, ADB country director, signed the agreements in Dhaka on behalf of their organisations, said a ADB press release.

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

"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," said ADB Country Director Edimon Ginting.

He said, "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 disincentivise banks' lending to CMSEs."

According to the press release, the loan aims at creating jobs in CMSEs for promoting socio-economic recovery after the Covid-19 pandemic. The assistance will rejuvenate CMSEs operated by youth, rural entrepreneurs, returning migrant workers, particularly women, who have been hit hard by the pandemic.

The loan to Bangladesh Bank will be on-lent to participating financial institutions, 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.