The Asian Development Bank (ADB) authorized a $400 million loan to Bangladesh today to advance domestic resource mobilization reforms, increase the efficiency and productivity of state spending, and assist small companies, particularly women-led businesses, in accessing low-cost innovative bank financing.
This loan is the second subprogram of ADB's Sustainable Economic Recovery Program, which was started in October 2021 to aid economic recovery following the Covid-19 pandemic.
“This subprogram enables Bangladesh to enhance revenues, promote efficiency and transparency in public spending and public procurement, deepen the reforms of state-owned enterprises, and help small businesses and microentrepreneurs to access low-interest affordable credits from the banking sector,” said ADB Principal Public Management Economist for South Asia Aminur Rahman.
“The subprogram, with a strong focus on gender, climate change, and digitization, enables the government to strengthen its efforts to support income generation for the poor and vulnerable.”
The program will enhance income tax collection through the adoption of the new Income Tax Act, reduce tax loopholes, strengthen compliance and enforcement measures, and broaden the country's tax net.
Transparency and efficiency in public procurement will be enhanced through strengthening electronic procurement and electronic payment systems, while approval of public projects will be facilitated through the newly launched digital system of public project appraisal and approval process.
The new package supports the launch by the Bangladesh Bank of innovative financing services through commercial banks to provide low-cost microcredit using digital channels and e-wallets.
It facilitates bank lending to marginalized and landless farmers, small traders, and low-income earners.
Micro and small businesses and women entrepreneurs who do not possess land or property will also be able to access finance based on their trade receipts and other forms of non fixed collaterals, such as small equipment and machinery.
Promoting gender equality and social inclusion and addressing the climate change agenda in public investment and national budgeting are some of the key activities of this new program.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
Established in 1966, it is owned by 68 members—49 from the region.
