The Asian Development Bank (ADB) and the Bangladesh government on Wednesday signed agreement for $400million in loan to advance reforms in domestic resource mobilization, improve efficiency and productivity of public spending, and help small businesses, especially women-led businesses to access low-cost innovative bank financing.
Sharifa Khan, secretary of the Economic Relations Division, and Edimon Ginting, ADB country director for Bangladesh, signed the agreement on behalf of Bangladesh and ADB, respectively, according to a press release.
This loan is ADB's second sub-program of the Sustainable Economic Recovery Program that was launched in October 2021 to support economic recovery after the Covid-19 pandemic.
ADB remains committed to helping boost the economic recovery of Bangladesh to transform it into a middle-income country by 2030, said its country director Edimon Ginting.
“We support the government's efforts for enhancing revenues, improving efficiency and transparency in public spending and public procurement, deepening the reforms of state-owned enterprises, and helping small businesses and micro-entrepreneurs access low-interest affordable credits from the banking sector,” he also said.
The assistance strongly focuses on gender, climate change, and digitization to promote income generation for the poor and vulnerable,” the ADB country director added.
The program will enhance income tax collection through the adoption of the new Income Tax Act, reducing tax loopholes, strengthening compliance and enforcement measures, and broadening the country's tax net.
Transparency and efficiency in public procurement will be enhanced through strengthening the 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.
This subprogram supports the Bangladesh Bank to launch innovative financing services through banks to provide low-cost microcredit through digital channels and e-wallet.
It also 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 climate change agenda in public investment and strengthening gender and climate budgeting are some of the key focus of this new program.
