Asian Development Bank (ADB) will provide $200m loan to small and medium-sized enterprises (SMEs) in rural Bangladesh to help the entrepreneurs gain access to medium to long term credit.
The credit facility will target the particular firms run by women, who are mostly engaged in subsistence trade and retail activities, and are typically less educated and have less access to SME finance than men, said ADB statement Thursday.
“Rural firms run by women struggle to get loans from banks. That means both they and the Bangladesh economy lose out,” said Peter Marro, principal financial sector specialist, in ADB’s South Asia Regional Department.
“We want to help cottage industries and SMEs to expand and flourish, including those operated by women.”
Loans will be targeted at small firms outside of the metropolitan areas of Dhaka and Chittagong, with at least 15% allocated for women entrepreneurs.
There are about 7.2m SMEs in Bangladesh. They account for 90% of all companies and employ 70-80% of the nonagricultural workforce in Bangladesh.
In 2014, SMEs contributed 25% of Bangladesh’s gross domestic product and 40% of the manufacturing output.