ADB provides 200 mln USD to support micro-enterprise financing in Bangladesh

The Asian Development Bank (ADB) and the government of Bangladesh Tuesday signed an agreement for 200 million U.S. dollars in loan to strengthen microfinance in Bangladesh and support micro-enterprises, particularly those owned by women and those located in regions with high climate risks.

Secretary of Bangladesh's Economic Relations Division Sharifa Khan and Edimon Ginting, the ADB's country director, signed the agreement on behalf of Bangladesh and the ADB, respectively.

The micro-enterprise financing and credit enhancement project will increase the liquidity of microfinance institutions (MFIs), which are key lenders to micro-enterprises, by channeling funds through the Palli Karma-Sahayak Foundation (PKSF), the Manila-based lender said in a statement.

The PKSF is a state-owned microfinance and development organization that on-lends to partner MFIs.

"Micro-enterprises are effective tools to generate employment, cut rural poverty and reduce urban-rural economic disparities," said Ginting, adding that "strengthening microfinance is critical for socio-economic recovery from the COVID-19 pandemic and revitalizing the economy."

The project targets that at least 80 percent of micro-enterprise borrowers are owned or led by women.

The project will develop a business plan update and digitalization roadmap for the PKSF as well as a diagnostic review of its partner MFIs' operational costs to enhance their viabilities.