ADB provides $100m to boost rural small enterprises in Bangladesh
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The Asian Development Bank (ADB) and the Government of Bangladesh on Tuesday signed a $100 million loan agreement to enhance access to medium- and long-term financing for cottage, micro, small, and medium-sized enterprises (CMSMEs) operating outside Dhaka and Chattogram metropolitan areas.
Md Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD), and Hoe Yun Jeong, ADB Country Director, signed the agreement on behalf of Bangladesh and ADB respectively at a ceremony held at the ERD office in Dhaka.
“As Bangladesh strives to diversify and transition its economy, developing CMSMEs is key to accelerating growth and reducing poverty, income inequality, and regional disparity,” said Mr Jeong. “This project will help achieve these goals by supporting CMSMEs in rural areas, especially those run by women, through improved access to long-term capital.”
He added that the project would also help women entrepreneurs enhance their business management skills and improve financial institutions’ technical capacity to serve CMSMEs.
Titled Second Small and Medium-Sized Enterprises Development Project (Phase 2), the initiative aims to create at least 15,000 jobs by 2030. It seeks to stimulate economic growth and reduce poverty by supporting CMSMEs in rural areas, which face greater challenges in accessing banking services compared to urban centres.
The project will also promote the expansion of commercially viable CMSMEs and employment generation. In addition, it complements ADB’s non-sovereign operations by strengthening the capacity of financial institutions involved in the project.
To foster innovation, the project will help CMSMEs integrate climate risk management into business operations and expand to green products, thereby tapping into new markets.
The package also includes $950,000 in technical assistance to strengthen the institutional capacity of Bangladesh Bank and participating financial institutions. It will provide training and capacity support for CMSMEs—particularly women-led enterprises—enabling them to better access financing and financial services.
Moreover, the project will develop training modules, conduct workshops, and support the creation of action plans on green finance, value chain-based financing, technical standards, and pilot projects.