The Asian Development Bank will provide an additional $50 million to help COVID19-hit microenterprises in Bangladesh to help them restore their economic activities.
The finance ministry’s Economic Relations Division secretary Fatima Yasmin and ADB country director Manmohan Parkash signed a loan agreement in this regard on Monday.
The additional loan will scale up the ongoing Microenterprise Development Project approved by the ADB in 2018 to provide a $50-million credit line to Palli Karma Sahayak Foundation, a government development finance and capacity building organisation, said a press release issued by the bank’s Dhaka office.
Mohammad Moinuddin Abdullah, managing director of PKSF, implementing agency of the MDP, signed the project agreement.
The assistance will expedite Bangladesh’s progress in socio-economic recovery from losses induced by the COVID-19 outbreak, Parkash said.
It will inject liquidity into the rural economy and help retain businesses and jobs for microenterprises with at least 90,000 jobs protected or created, of which 70 per cent are for women, he said.
He also said that the government and the PKSF on ADB’s request had reduced the lending rate from the current 24 per cent to a maximum of 18 per cent per year, which will benefit all microenterprises in accessing financing on cheaper terms, including at least 30,000 COVID-19-affected microenterprises.
The MDP will strengthen the capacity of 120 partner microfinance institutions in microenterprise lending such as credit appraisal, pricing, and financial and portfolio management and monitoring, according to the release.
Over 10,000 additional borrowers will come under mobile-based microenterprise financing application to quickly facilitate loan applications, disbursement, and collection.
The project will also promote marketing of products through e-commerce, it said.
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