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The Asian Development Bank (ADB) and Bangladesh on Thursday signed a $100 million agreement to help cottage, micro, small, and medium-sized enterprises (CMSMEs) outside Dhaka and Chattogram metropolitan areas gain access to medium and long-term credit.
Economic Relations Division (ERD) Secretary, Md. Shahriar Kader Siddiky and ADB Country Director Hoe Yun Jeong signed the agreement on behalf of Bangladesh and AD,B respectively at a ceremony at the ERD offices in Dhaka, reports UNB.
The Second Small and Medium-Sized Enterprises Development Project (Phase 2) aims to create at least 15,000 jobs by 2030, said a press release.
It will spur economic growth and poverty reduction through the development of the CMSMEs in rural areas, as they have less access to banks and their branches than in metropolitan areas.
It will also help increase the number and size of commercially viable CMSMEs, as well as employment in the sector.
The project complements ADB’s non-sovereign operations by building the capacity of the financial institutions supported by the project.
Besides, the project will help CMSMEs innovate by integrating climate risk into their business operations and expanding to green products, thereby increasing and capturing 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 Country Director Hoe Yun Jeong said that 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.
“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”.
He said that 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.