Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 13 Nov 2006
PDS Updated as of 08 Sep 2011

Project Name SME Sector Development (Program Loan)
Country Bangladesh
Project/Program Number 35225-013
Status Closed
Geographical Location Nationwide
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Industry and trade
Subsector Small and Medium Enterprise Development
Strategic Agendas
Drivers of Change
Gender Equity and Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Technical Assistance4507Technical Assistance Special Fund600
Loan2150Asian Development Fund5,000
Loan2149Asian Development Fund30,000
Loan2148Asian Development Fund15,000
TOTAL US$ 50,600

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment FI

Summary of Environmental and Social Issues

Not mentioned in RRP

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

Program Loan prepared after consultation with the Government.

During Project Design
tbd
During Project Implementation
tbd

Description

The objective of SMESDP is to support government efforts to foster development of the SME sector by strengthening the policy environment for SMEs and improving SMEs' access to credit and related services. This will enable the sector to attain its full potential for contributing to sustainable economic growth and, through generation of employment, the reduction in poverty.

Project Rationale and Linkage to Country/Regional Strategy

tbd The national poverty reduction strategy of Bangladesh reconizes that reducing income poverty will require more concerted and intensified effort. Poverty reduction target is more than 3% per year, that was 1.5% during 1990s. Accordingly, Government's priority is to accelerate and expand a sustainable SME sector for pro-poor economic growth and empoyment generation.

Development Impact

Accelerate development of SME sector and enable SMEs to attain their full potential for contributing to sustainable economic growth and poverty reduction.

Project Outcome

Description of Outcome
Enhanced growth of commercially viable SMEs and increased employment in the SME sector;
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
1. SME policy and development framework 2. Institutional structure and mechanisms to implement the SME development strategy. 3. Action program to support SME development strategy 4. Rationalized government assistance to SMEs 5. Tax and Incentives 6. Improved SME access to business support services and government assistance 7. Business registry of establishments used for 2001-2003 Census of Nonfarm Economic Activities will be used for sampling frame for surveys of SMEs and development of SME database.
Status of Implementation Progress (Outputs, Activities, and Issues)
1. The 16 member SME Task Force (SMETF) established on 5 November 2003, chaired by the principal secretary, Prime Minister s office to prioritize specific elements of SME policies, The SMETF submitted its report in 2004 and approved in January 2005 except for the recommendation on an exemption from Government- imposed duty or tax. Further, Industrial Policy 2005, approved by the cabinet on 17 January 2005, highlighted the role of SMEs in sustainable industrial development in Bangladesh. The National Council for Industrial Development (NCID), chaired by the Prime Minister and empowered to take policy decisions under the umbrella of Industrial Policy 2005, is responsible for SME development. MOI formulated the SME policy strategies on the basis of recommendations of the SMETF and the SME Advisory Panel. The SME policy strategies document published both in Bangla and English. 2. - SME Advisory Panel with 18 members, chaired by Chairman of federation of NGOs was reconstituted on 5 October 2005. - SME established in November 2006. Certificate of incorporation issued by Joint Stock Companies in December 2006. 3. - SME Cell was set up at the Ministry of Industries on 1 Nov 2004. - SME Policy Strategies was adopted by the Government on 11 April 2005. This provided input for SME action program, prepared in September 2006. 4. - MOI constituted a high-profile restructuring committee chaired by the Secretary, Ministry of Industries. Other members of the committee are BSCIC Chairman, one Joint Secretary and one Assistant Secretary. The committee assessed all the past and current recommendations made and worked out a final one and forwarded its recommendations to Ministry of Establishment for consideration. - A national restructuring expert, a national consultant engaged by the SMESDP project in November 2006, completed a study on the restructuring of BSCIC in August 2007. The report includes recommendations on policy, governance, strategic development, vision, mission, objectives, management structure, and a staffing plan. The MOI formed an independent peer review committee to review the report. The consultant presented and submitted the final report in February 2008 after incorporating the observations of the committee. At the same time, the Government began a number of strategic reorientation measures for BSCIC, including a monitorable plan and an implementation road map. In order to harmonize personnel at BSCIC headquarters and its field offices, a committee headed by the secretary, MOI, adopted a complete human resource restructuring plan and a new organization chart. The BSCIC Board of Directors reviewed these recommendations and submitted a revised organization chart in December 2007, with total staff at headquarters and field offices reduced from 3,244 to 1,662. The MOI approved the organization chart in December 2007 and it will be implemented in phases by BSCIC. 5. Government normally reviews the prevailing economic conditions of the country and raises the filing threshhold for submitting tax return before the budget. In 2007-08 this was increased from Tk. 1,20,000.00 to Tk.1,50,000.00 and in 2008-09 it is again increased from Tk.1,50,000.00 to Tk.1,65,000.00. In addition in 2007-08 budget the Government has declared a special tax benefit for SMEs . Though the requirements of allowing 75% tax rebate and providing accelerated depreciation on plant and machinery of SMEs has not been fully met, a waiver was sought for full compliance with this condition for the release of the second tranche. 6. The Bangladesh Bureau of Statistics has completed the registry of enterprises on 31 January 2007. The registered lists have 91,031 enterprises employing less than 10 persons. Consulting firm for development of data base fielded in September 2008. 7. - SME Web Portal launched on 17 July 2007 and being updated by the SME Foundation. - Total 31 helpline outreach centers in districts, and 6 centers in Dhaka and Chittagong metropolitan cities inaugurated and in operation. Tripartite MOUs signed among the Project, Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), and BSCIC district centers. Bi-lateral MOUs signed between the Project and 6 chambers and associations (DCCI, WEAB, WBCCI, CWCCI, NASCIB, and FBCCI) for urban centers. - Total 2,248 participants (1,093 male and 1,155 female) attended training courses on new business creation, book keeping, computer, training of trainers, food processing, home textile, fashion design, plastic, welding, heat treatment, artificial jewelary, and leather products. The Project selected public sector service providers and signed 36 MOUs among the project, providers and the service consuming chambes/associations. An international consuting firm has been appointed to develop a strategic plan for training and development of SMEs.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2010 Nov 03
Consulting Services
N/R
Procurement
N/R
Procurement and Consulting Notices
http://www.adb.org/projects/35225-013/business-opportunities

Timetable

Concept Clearance
Fact-finding 29 Feb 2004 to 10 Mar 2004
Management Review Meeting 16 Jul 2004
Approval 20 Dec 2004
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 2148 20 Dec 2004 26 Jan 2005 20 Jun 2005 31 Dec 2007 31 Dec 2008 21 Jun 2010
Loan 2149 20 Dec 2004 26 Jan 2005 20 Jun 2005 31 Dec 2010 21 Jun 2010
Loan 2150 20 Dec 2004 26 Jan 2005 20 Jun 2005 30 Jun 2008 30 Jun 2010 29 Nov 2010
Technical Assistance 4507 20 Dec 2004 12 Jul 2005 12 Jul 2005 31 Dec 2007 30 Jun 2009

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
20 Aug 2014 Loan 2148 15,642 0 100.00%
20 Aug 2014 Loan 2149 29,492 0 98.00%
20 Aug 2014 Loan 2150 3,181 0 99.00%
Cumulative Disbursements
20 Aug 2014 Loan 2148 15,642 0 100.00%
20 Aug 2014 Loan 2149 30,235 0 100.00%
20 Aug 2014 Loan 2150 3,225 0 100.00%

TA Amount (US$ thousand)

Approval Number Approved Amount Revised Amount Total Commitment Uncommitted Balance Total Disbursement Undisbursed Balance
Technical Assistance 4507 600 600 542 58 542 58

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 2150 Satisfactory
Loan 2149 Satisfactory
Loan 2148 Satisfactory

Contacts and Update Details

Responsible ADB Officer Virgilio T. Velasco ( @adb.org)
Responsible ADB Department South Asia Department
Responsible ADB Divisions Bangladesh Resident Mission
Executing Agencies Ministry of Finance
Mr. Amalendu Mukharjee

Links

Project Website http://www.adb.org/projects/35225-013/main
List of Project Documents http://www.adb.org/projects/35225-013/documents