The World Bank (WB) will provide US$245 million worth of loans to modernise the money disbursement system under the social safety-net programmes of Bangladesh.
The Washington-based lender signed an agreement with the government in Dhaka on Tuesday, also to improve efficiency and transparency in the system.
Economic Relations Division Secretary Kazi Shofiqul Azam and WB Country Director in Bangladesh Qimiao Fan signed the agreement on behalf of their respective sides.
The additional loan to the Safety Net Systems for the Poorest Project is expected to help improve beneficiary targeting, information management and benefit payment of five large safety-net programmes.
These are Employment Generation Programme for the Poorest, Work for Money, Test Relief, Vulnerable Group Feeding and Gratuitous Relief.
With this additional financing, the WB's support to the project now stands at $745 million.
The Department of Disaster Management implements the programmes collectively, reaching over 9.0 million poor and vulnerable households.
In the last financial year (FY) 2016-2017, Bangladesh spent around $3.5 billion on social protection, which was about 1.4 per cent of the country's Gross Domestic Product (GDP).
The loan is also expected to help Bangladesh Bureau of Statistics (BBS) in completing the country's first universal poverty registry - the National Household Database.
The database will be integrated with the information systems of various ministries and agencies to be used for beneficiary selection purposes. For this, BBS has already completed data collection in Barisal, Rangpur and part of Mymensingh divisions.
This month, BBS will start data collection in Dhaka and Chittagong divisions.
ERD Secretary Mr Azam said: "The government of Bangladesh is committed to strengthen its safety-net management and oversight capabilities by developing an integrated social protection service delivery system, in line with recommendations of the National Social Security Strategy 2015."
Mr Fan said: "An integrated social protection service delivery system will help ensure equity, build resilience and create opportunities for the poorest population. At the same time, it will reduce administrative efforts, costs and errors."
Efficient and transparent delivery of social assistance to the right households at the right time will help Bangladesh reduce poverty and boost shared prosperity, he added.
The $245 million credit is from the International Development Association (IDA), the WB's concessional lending arm. The interest of the credit will be 0.75 per cent and repayable in 38 years, including a 6-year grace period.
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