ADB approves $50m loan for microenterprise development

Asian Development Bank (ADB) has approved US$ 50 million loan to promote microenterprise development in Bangladesh through a credit line to Palli Karma Sahayak Foundation (PKSF), a development finance organisation, and its partner microfinance institutions, reports BSS.
The project will help fill the funding gap in the short term. The loan will be provided to PKSF to on-lend to partner organisations and to sub-lend to about 40,000 microenterprises, of whose 70 per cent are female, said an ADB press release on Tuesday.
To address medium-term challenges, the release said, the project will help PKSF develop a financing strategy and carry out institutional strengthening.
For the longer term, the project will develop microenterprise finance operational guidelines for microfinance institutions, including piloting for some partner organizations a mobile-based financing application.
It will also assist in clustering microenterprises for business expansion and up-scaling with quality control, branding, packaging, and marketing.
The total cost of the project, which is due for completion at the end of 2020, is $62.5 million, of which the microenterprises will contribute $12.5 million.