The program will also widen access to finance for women entrepreneurs, particularly those running CMSMEs
The Asian Development Bank (ADB) has approved a $250 million policy-based loan to support Bangladesh's economic recovery following the Covid-19 pandemic.
This is the first subprogram of the programmatic $500 million Sustainable Economic Recovery Program, ADB said in a press release issued on Saturday.
The objective of the program is to facilitate a rapid and sustainable recovery from the Covid-19 pandemic, generate employment, and expand economic activities for micro-entrepreneurs and small businesses, it said.
The program will also widen access to finance for women entrepreneurs, particularly those running cottage, micro, small, and medium-sized enterprises (CMSMEs), by introducing or modifying refinancing programs and credit guarantee schemes with an earmarked portion for women entrepreneurs.
It will also encourage more women-led start-ups by earmarking 10% of new start-up financing for them.
This will be pursued through policy reforms that will create fiscal space to enhance public expenditure and support the recovery and growth of CMSMEs.
The loan will also support the government's planned public investment in education, health, social protection, and infrastructure and help to stimulate economic activities and economic recovery.
The fiscal space created under the program will allow the government to prioritize expenditures and upscale investment in social and economic infrastructure, said ADB Principal Financial Management Specialist Srinivasan Janardanam.
The program is expected to increase the efficiency in public investment management and create a favorable environment for access to credit, particularly for the poor and vulnerable, he added.
To promote fiscal sustainability, the program will help the government address two key constraints to public investments in critically needed physical and social infrastructure, ADB said.