This is the first sub-programme of the $500-million Sustainable Economic Recovery Programme, whose aim is to facilitate a rapid and sustainable recovery from the pandemic, generate employment and expand economic activities for micro-entrepreneurs and small businesses.

This will be pursued through policy reforms that will create fiscal space to enhance public expenditure and support the recovery and growth of cottage, micro, small and medium-sized enterprises (CMSMEs), ADB said in a press release.

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The loan will support the government’s planned public investment in education, health, social protection, and infrastructure and help to stimulate economic activities and economic recovery. It is also aligned with the core objectives of the country’s eighth five-year plan and supports the aspiration of Bangladesh to become an upper middle-income country by 2031.

“The fiscal space created under the programme will allow the government to prioritize expenditures and upscale investment in social and economic infrastructure,” said ADB principal financial management specialist Srinivasan Janardanam.

“The program is expected to increase the efficiency in public investment management and create a favorable environment for access to credit, particularly for the poor and vulnerable,” he added.

To promote fiscal sustainability, the program will help the government address two key constraints to public investments in critically needed physical and social infrastructure. These are low domestic resource mobilisation and inefficient use of public resources.

The programme aims to expand the tax base, improve compliance and strengthen enforcement, rationalise tax exemptions and modernise tax administration.

The programme will widen access to finance for women entrepreneurs, particularly those running CMSMEs, by introducing or modifying refinancing programmes and credit guarantee schemes with an earmarked portion for women entrepreneurs. It will also encourage more women-led start-ups by earmarking 10 per cent of new start-up financing for them.

Fibre2Fashion News Desk (DS)