ADB to provide $200m in loans for rural SMEs
The Asian Development Bank will provide $200 million in loans to small and medium-sized enterprises in rural Bangladesh.
The credit facility will particularly target firms run by women, especially those engaged in subsistence trade and retail activities and are typically less educated and have less access to SME finance than men, the Manila-based bank said in a statement yesterday.
“Rural firms and firms run by women struggle to get loans from banks. That means both they and the Bangladesh economy lose out,” said Peter Marro, principal financial sector specialist at the ADB's South Asia Regional Department.
“We want to help cottage industries and SMEs to expand and flourish, including those operated by women.”
The small firms outside the metropolitan areas of Dhaka and Chittagong will be targeted by the initiative, with at least 15 percent allocated for women entrepreneurs. There are about 7.2 million SMEs in Bangladesh, which account for 90 percent of all companies and employ 70-80 percent of the country's non-agricultural workforce.
In 2014, SMEs accounted for 25 percent of Bangladesh's gross domestic product and 40 percent of the manufacturing output.
The project also includes $2 million in technical assistance from Japan Fund for Poverty Reduction to help establish incubation facilities at educational institutions to promote entrepreneurship and support entrepreneurs' development units at Bangladesh Bank.
It will also help set up dedicated women's desks in financial institutions, and strengthen women entrepreneurs' ability to access available credit through financial and legal literacy, as well as managing their enterprises.
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