A $100 million deal was inked today by the government of Bangladesh and the Asian Development Bank (ADB) to assist cottage, micro, small, and medium-sized companies (CMSMEs) outside of the Chattogram and Dhaka metropolitan areas in obtaining medium- and long-term credit.
The agreements were signed at a ceremony at the Economic Relations Division (ERD) headquarters in the capital by Md. Shahriar Kader Siddiky, Secretary, ERD, and Hoe Yun Jeong, Country Director, ADB, on behalf of Bangladesh and ADB, respectively.
“As Bangladesh strives to diversify and transition its economy, developing CMSMEs is a key to accelerating growth, and reducing poverty, income inequality, and regional disparity,” said Country Director Hoe Yun Jeong.
“This project will help achieve these goals by supporting the CMSMEs in rural areas, especially those run by women, with better access to long-term capital. The project will also help women entrepreneurs develop skills to manage their enterprises more efficiently, and improve the financial institutions’ technical capacity to provide credit and skills to the CMSMEs”, Jeong added.
The goal of Phase 2 of the Second Small and Medium-Sized Enterprises Development Project is to generate a minimum of 15,000 jobs by 2030. The rise of CMSMEs in rural areas, which have less access to banks and their branches than in urban areas, will promote economic growth and the alleviation of poverty. An ADB press release stated that it will also contribute to the expansion of employment in the industry and the number and size of commercially viable CMSMEs.
The initiative enhances the capacity of the financial institutions it supports, which supports ADB’s non-sovereign operations. Furthermore, the project will assist CMSMEs in innovating by expanding to green products and incorporating climate risk into their business processes, which will increase and capture new markets.
The project includes $950,000 in technical assistance to strengthen the institutional capacity of Bangladesh Bank and participating financial institutions, and provide capacity support for the targeted CMSMEs.
It will also strengthen the capacity of the entrepreneurs, including the women-led CMSMEs, to access bank financing and financial services. In addition, it will help develop training modules; conduct training workshops on CMSMEs; support the development of action plans on green finance and value chain-based financing; technical standards, and pilot projects.
ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members-50 from the region.
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