Amid reports of millions of people in Bangladesh getting sucked into poverty since the Covid pandemic began, the Asian Development Bank (ADB) has approved USD 250 million policy-based loans to support the country’s economic recovery following the deadly viral infection. This is the first subprogram of the programmatic $500 million Sustainable Economic Recovery Program, ADB said in a press release on Saturday.

The objective of the program is to facilitate rapid and sustainable recovery from the Covid-19 pandemic, generate employment, and expand economic activities for micro-entrepreneurs and small businesses, it said.

The program will widen access to finance for women entrepreneurs, particularly those running cottage, micro, small, and medium-sized enterprises (CMSMEs), by introducing or modifying refinancing programs and credit guarantee schemes with an earmarked portion for women entrepreneurs.

It will also encourage more women-led start-ups by earmarking 10 percent of new start-up financing for them, the release said.

This will be pursued through policy reforms that will create fiscal space to enhance public expenditure and support the recovery and growth of CMSMEs.

The loan will also support the government's planned public investment in education, health, social protection, and infrastructure and help to stimulate economic activities and economic recovery.

The fiscal space created under the program will allow the government to prioritize expenditures and upscale investment in social and economic infrastructure said ADB Principal Financial Management Specialist Srinivasan Janardanam.

Nearly 25 million more people in Bangladesh have been driven into poverty since the pandemic began, according to a report by the Power and Participation Research Center and BRAC Institute of Governance and Development.

Bangladesh had about 32 million people living in poverty in 2019, according to the Asian Development Bank.

The Bangladesh Garment Manufacturers and Exporters Association estimates the industry lost USD 3 billion in orders last year.

Some garment factories closed and at least 300,000 workers were laid off, often without severance, according to the Bangladesh Center for Workers’ Solidarity, according to the web journal Diplomat.

(SAM)