Second Small and Medium-Sized Enterprises Development Project-Additional Financing (ADB-36200-024)

Countries
  • Bangladesh
Geographic location where the impacts of the investment may be experienced.
Specific Location
Southwest area of Bangladesh
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • Asian Development Bank (ADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
Government of Bangladesh - Bangladesh Bank
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 100.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 400.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Other Related Projects
Primary Source

Original disclosure @ ADB website

Updated in EWS Jan 30, 2024

Disclosed by Bank Nov 14, 2022

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, the overall project is estimated to cost $400 million, including additional financing of $133.3 million, of which Asian Development Bank (ADB) is providing $100 million loan from concessional ordinary capital resources. The Government of Bangladesh will finance $20 million, and the small and medium-sized enterprises (SMEs) will finance the balance of $13.3 million. A TA grant of $650,000, financed by the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR) ($500,000) and the Financial Sector Development Partnership Special Fund (FSDPSF) ($150,000), will be provided for the outreach and support program to the SMEs

The ongoing project, Loan 3367-BAN: SMEDP2, is aimed at accelerating the development of SMEs located outside the metropolitan areas of Dhaka and Chattogram, by improving their access to bank financing through onlending by the participating financial institutions (PFIs) to eligible small and medium-sized enterprises. Two-thirds of the fund of this project are reserved for the cottage, micro, and small enterprises, of which 15% are reserved for women entrepreneurs.

The ongoing project comprises (i) a financial intermediary loan of $200 million for a credit line to the Bangladesh Bank and (ii) a TA grant of $2 million to strengthen the capacity of SME entrepreneurs to access bank financing and SME support institutions. The Ministry of Finance (MOF) is the executing agency and Bangladesh Bank is the implementing agency.

ADB approved a loan of $200 million from its ordinary capital resources on 19 January 2016, which provides financing to eligible SME sector through Bangladesh Bank and eligible PFIs. The loan and project agreements were signed on 18 January 2017 and became effective on 27 November 2017 after some adjustment to the project design (Attachment 3). The original loan closing date of 30 June 2021 has been extended to 31 December 2022 because of the impact of coronavirus disease (COVID-19) pandemic. As of 30 June 2022, ADB has fully disbursed the loan component. The $2-million piggy-backed TA 9068-BAN: Strengthening Capacities of Small and Medium-Sized Enterprise Stakeholders to Access Bank Financing and Services, financed by JFPR, was approved on 19 January 2016, and became effective on 23 January 2017. Bangladesh Bank and SME Foundation were the two implementing agencies of the TA. The original TA closing date of 31 March 2019 was extended to 18 January 2021, and it was closed on 8 April 2021 with 91.3% fund utilization.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The overall project is estimated to cost $400 million, including additional financing of $133.3 million, of which Asian Development Bank (ADB) is providing $100 million loan from concessional ordinary capital resources. The Government of Bangladesh will finance $20 million, and the small and medium-sized enterprises (SMEs) will finance the balance of $13.3 million. A TA grant of $650,000, financed by the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR) ($500,000) and the Financial Sector Development Partnership Special Fund (FSDPSF) ($150,000), will be provided for the outreach and support program to the SMEs

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

The Ministry of Finance (MOF) is the executing agency and Bangladesh Bank is the implementing agency.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contacts available at the time of disclosure.

Responsible ADB Officer Gunawardhena, Manohari
ponsible ADB Department Sectors Group
Responsible ADB Division Finance Sector Office (SG-FIN)
Executing Agencies
Ministry of Finance

 

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ACCOUNTABILITY MECHANISM OF ADB

The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main.

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