This fund will help the efforts of the Bangladesh government and PKSF to assist microenterprises, smallholders and recover the severely Covid-19 affected rural economy
The International Fund for Agricultural Development (IFAD) has decided to provide Bangladesh with an additional loan of $18.07 million to rebuild microenterprises and support smallholders, who have been affected by the Covid-19 pandemic.
The additional financing will scale up activities under the ongoing Promoting Agricultural Commercialization and Enterprises (PACE) project, which is being implemented by the apex development organization of Bangladesh, the Palli Karma-Sahayak Foundation (PKSF), said a press release on Thursday.
The funding will complement the Bangladesh government and PKSF’s efforts to assist microenterprises and smallholders and recover the severely affected rural economy from coronavirus induced losses.
This additional loan will finance activities from January 2021 to December 2022 to help restore microenterprises in the farm and non-farm sectors, as well as, scale-up and strengthen successful value chains under the PACE project.
Rasha Omar, IFAD’s South Asia hub chief, said: “The impact of the pandemic is long term in nature and requires building back the economy better.”
“The additional resource is IFAD’s response to the rehabilitation of microenterprises and smallholder families who lost their businesses and income due to the pandemic. The initiative will restore their livelihoods and develop strategies to reduce future risks.”
The PACE project, jointly financed by IFAD, GOB, and PKSF, was launched in 2015 to improve profitable business opportunities for microentrepreneurs nationwide and create employment for the extreme and moderate poor people, added the release.
To date, the PACE project has directly benefited about 321,000 microentrepreneurs and other actors engaged in value chains in select farm and non-farm sectors through 74 value chain and 25 technology transfer sub-projects by providing them with microcredit support, technical assistance, and technological promotion, and facilitating market access, the release furthered.
With the additional loan, the total value of the PACE project now amounts to $129.81 million, with IFAD financing $58.07million, and over the next two years, the project will directly benefit another 168,000 beneficiaries, including 48,000 microentrepreneurs and 120,000 value chain actors.
With the increased demand for finance to rebuild the rural economy of Bangladesh, this initiative by IFAD and PKSF to restore the microfinance sector will increase the disbursement of loans to microenterprises to restore and build back better their business and agricultural activities, and enhance their resilience to absorb the shocks that could be induced by future crises.
Also, PACE will provide awareness building training on Covid-19 protection protocols developed by PKSF to manage health and hygiene on the production premises to prevent transmission of Covid-19 and other future epidemics. The project further plans to improve the physical environment of wet markets and work with market management committees to improve cleanliness, develop health and hygiene awareness among buyers and sellers, and introduce a system to ensure a proper flow of human movements to separate entry and exit traffic.
To respond to the growing demand of shifting to e-commerce to promote contactless transactions, with the additional financing PKSF will work with existing e-commerce businesses to facilitate the development of a microenterprise-friendly platform covering the entire supply chain. The platform will eventually be interactive and offer advisory services to farmers, including pandemic management.
According to the release, the additional resources will be invested in three broad agri-business sub sectors: horticulture; fisheries and aquaculture; and poultry and livestock including processed products, and cover 40 districts in Barisal, Chittagong, Dhaka, Khulna, Rajshahi, Rangpur, and Sylhet divisions.
IFAD has a long-standing partnership with PKSF and PACE is the fourth IFAD-financed project with this apex development organization.
Besides, IFAD is also financing a fifth project called the Rural Microenterprise Transformation Project (RMTP), which was launched in August this year and has a total budget of $200million, of which IFAD’s contribution is $81 million.