$200 million loan agreement signed to support microentrepreneurs
A Subsidiary Loan Agreement (SLA) was signed between the Finance Division of the Ministry of Finance and PKSF at Bangladesh Secretariat on 14 May 2023 to implement Microenterprise Financing and Credit Enhancement Project (MFCE).
Under the project, the Asian Development Bank (ADB) will provid USD 200 million in loan for sustainable employment creation by providing financial and institutional support to microenterprises. This five-year MFCE project will be implemented by PKSF through its selected Partner Organizations (POs).
Abu Daiyan Mohammad Ahsanullah, Joint Secretary of the Finance Division, signed the SLA on behalf of the Government of Bangladesh and Md Fazlul Kader, Additional Managing Director, PKSF, signed the SLA on behalf of PKSF. Md Touhidul Islam, Deputy Secretary, Finance Division; Mohammad Amin Shorif, Senior Assistant Secretary, Financial Institutions Division and Dr Mesbahuddin Ahmed, Assistant General Manager, PKSF, were present at the signing ceremony.
According to the Loan Agreement, out of the USD 200 million, 180 million equivalent money will be disbursed in loans to almost 1 lakh microentrepreneurs through the POs. A pilot Credit Guarantee Fund will be established with the remaining USD 20 million in order to increase the POs’ access to commercial banks’ financing for the microenterprise loan program. At least 40 percent of the loan proceed will be disbursed in the relatively poverty-stricken areas and 10 percent to the climate vulnerable areas under the project. At least 80 percent of the total participants in the project will be women.
In addition, institutional capacity building of PKSF and the POs, capacity enhancement for women entrepreneurs, environmental safeguard and development of disaster and climate change risk management systems in microenterprises will be implemented.