The Microenterprise Financing and Credit Enhancement Project will expand access to finance for unbanked and underbanked microenterprises through Palli Karma Sahayak Foundation (PKSF), a wholesale microfinance apex and its partner microfinance institutions (MFIs) - partner organizations (POs).
| Project Name | Microenterprise Financing and Credit Enhancement Project | ||||||||||||||
| Project Number | 51269-003 | ||||||||||||||
| Country | Bangladesh |
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| Project Status | Proposed | ||||||||||||||
| Project Type / Modality of Assistance | Loan Technical Assistance |
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| Source of Funding / Amount |
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| Strategic Agendas | Inclusive economic growth |
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| Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Knowledge solutions Partnerships Private sector development |
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| Sector / Subsector | Finance / Inclusive finance |
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| Gender Equity and Mainstreaming | Gender equity | ||||||||||||||
| Description | The Microenterprise Financing and Credit Enhancement Project will expand access to finance for unbanked and underbanked microenterprises through Palli Karma Sahayak Foundation (PKSF), a wholesale microfinance apex and its partner microfinance institutions (MFIs) - partner organizations (POs). | ||||||||||||||
| Project Rationale and Linkage to Country/Regional Strategy | MFIs can be an important source of microenterprise financing. However, MFIs also face various constraints including (i) insufficient knowledge and capacity on microenterprise financing, (ii) limited enabling environment for microenterprise operations, and (iii) limited sources of funding. MFI financing is scarce due to the limited funding from Palli Karma Sahayak Foundation (PKSF), a wholesale financing institution for MFIs, and commercial banks. There are also regulatory restrictions on MFIs' savings mobilization. Except for large MFIs, most MFIs have limited access to commercial funding sources. This is due to the commercial banks' limited understanding on the microfinance sector and the preconception on MFIs as high risk borrowers. Current MFIs' funding sources are not keeping pace with the demand. A risk mitigation instrument for MFIs to mobilize commercial sources of funding such as a credit guarantee can be effective to provide additional comfort to commercial banks to expand their lending to MFIs. | ||||||||||||||
| Impact | On-farm and off-farm jobs created through institutional and financial support to cottage, micro and small enterprises. (8th Five-Year Plan, 2020 2025)a | ||||||||||||||
| Outcome | Microenterprises' access to MFI financing increased | ||||||||||||||
| Outputs | PKSF Funding to MFIs for microenterprise financing expanded Commercial sources of funding to MFIs for microenterprise financing increased PKSF's and POs' institutional capacity and viability enhanced |
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| Geographical Location | Nation-wide | ||||||||||||||
| Safeguard Categories | |
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| Environment | FI |
| Involuntary Resettlement | FI-C |
| Indigenous Peoples | FI-C |
| Summary of Environmental and Social Aspects | |
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| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | |
| Business Opportunities | |
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| Consulting Services | Recruitment of consultants shall be governed by the principles and procedures laid down in ADB's Procurement Regulations for ADB Borrowers (2017, as amended from time to time). |
| Procurement | Procurement by subborrowers, if any, will be in accordance with the established private sector or commercial practices acceptable to ADB, as required in Procurement Regulations for ADB Borrowers (2017, as amended from time to time). |
| Responsible ADB Officer | Ozaki, Mayumi |
| Responsible ADB Department | South Asia Department |
| Responsible ADB Division | Public Management, Financial Sector and Trade Division, SARD |
| Executing Agencies |
Financial Institutions Division-MOF Bangladesh Secretariat, Abdul Gani Rd Dhaka-1000 Bangladesh |
| Timetable | |
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| Concept Clearance | 01 Jul 2021 |
| Fact Finding | 23 Jun 2021 to 24 Jun 2021 |
| MRM | 27 Aug 2021 |
| Approval | - |
| Last Review Mission | - |
| Last PDS Update | 01 Jul 2021 |
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| Title | Document Type | Document Date |
|---|---|---|
| Microenterprise Financing and Credit Enhancement Project: Initial Poverty and Social Analysis | Initial Poverty and Social Analysis | Jul 2021 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
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Tenders
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Contracts Awarded
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Procurement Plan
None currently available.