The Asian Development Bank (ADB) and the Government of Bangladesh signed loan agreements worth USD200 million to help small- and medium-sized enterprises (SMEs) in rural Bangladesh gain access to medium and long-term credit on January 18. Kazi Shofiqul Azam, Secretary (In-charge), Economic Relations Division (ERD), and Kazuhiko Higuchi, Country Director, Bangladesh Resident Mission, signed the loan agreement on behalf of Bangladesh and ADB respectively, at a ceremony in Dhaka. Nurun Nahar, general manager of Bangladesh Bank signed the project agreement.
“Developing SMEs is a key to accelerating growth, and reducing poverty, income inequality, and regional disparity,” said Kazuhiko Higuchi. “This project will help small businesses and cottage industries 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.” The Second Small and Medium-Sized Enterprise Development Project primarily focuses on small firms outside the metropolitan areas of Dhaka and Chittagong. At least 15 percent of assistance will be for women entrepreneurs. Priority will be on women engaged in subsistence trade and retail activities, who typically have limited access to finance. The project includes USD2 million in technical assistance from the Japan Fund for Poverty Reduction to help establish incubation facilities with the aim to promote entrepreneurship. This assistance will also help develop SME clusters that will boost access to long-term financing, and strengthen backward and forward linkages with the formal sector, particularly the export-driven industries. The Bank and Financial Institutions Division of the Ministry of Finance is the executing agency of the project, while the Bangladesh Bank and the SME Foundation are the implementing agencies.