Early Warning System

Regions

South Asia

Geographic location where the impacts of the investment may be experienced.

Countries

Bangladesh

Geographic location where the impacts of the investment may be experienced.

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

Approved

Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.

Bank Risk Rating

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."

Voting Date

Nov 14, 2022

Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.

Borrower

Government of the People's Republic of Bangladesh

A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.

Sectors

Finance

The service or industry focus of the investment. A project can have several sectors.

Investment Type(s)

Advisory Services, Loan

The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.

Investment Amount (USD)

$ 201.00 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.

Loan Amount (USD)

$ 200.00 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.

Grant Amount (USD)

$ 1.00 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)

$ 200.00 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

Primary Source

Original disclosure @ ADB website

Updated in EWS Jul 2, 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 ADB, the proposed project will strengthen microfinance in Bangladesh by expanding access to finance for unbanked and underbanked microenterprises, especially microenterprises owned by women and those from regions affected by adverse climatic conditions.The project targets increased access to finance for microfinance institutions (MFIs), which are key lenders to microenterprises. The project will channel funds through Palli Karma Sahayak Foundation (PKSF), a state-owned wholesale microfinance and development organization, which will onlend to its partner MFIs.ADB will use the attached TA to help develop a pilot credit guarantee fund (CGF) at PKSF and develop partner MFIs’ capacity to enhance women’s entrepreneurship skills and promote environmentally responsible microenterprise financing through advisory services for those affected by climate risk.It builds on previous work by ADB in microfinance, including commercialization and digitalization of microfinance and inclusive insurance as well as providing financial support for microcredit development. The financial intermediary modality is used as it is the most appropriate to achieve the project objectives of (i) expanding microenterprises’ access to finance, and (ii) expanding MFIs’ sources of funding.

Bank Rating: FI-C

Early Warning System Project Analysis

For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The ADB categorized the project E&S risks as follows:

Environment - FI;
Involuntary Resettlement - FI-C;
Indigenous Peoples - FI-C.

Investment Description

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

Asian Development Bank (ADB)

The project is estimated to cost $200 million.The government has requested a concessional loan of $200 million from ADB’s ordinary capital resources to help finance the project. The loan will have a 25-year term, including a grace period of 5 years; an interest rate of 2.0% per year during the grace period and thereafter; and such other terms and conditions set forth in the draft loan and project agreements.

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.

Palli-Karma Sahayak Foundation (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.

As stated on the company's website, Palli Karma-Sahayak Foundation (PKSF) is an apex organization established by the government of Bangladesh in 1989. It is an specialized institution for poverty alleviation through employment generation.

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.

Responsible ADB Officer	Gunawardhena, Manohari
Responsible ADB Department	South Asia Department
Responsible ADB Division	Public Management, Financial Sector and Trade Division, SARD
Executing Agencies	Financial Institutions Division-MOF

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.adb.org/forms/request-information-form

ADB has a two-stage appeals process for requesters who believe that ADB has denied their request for information in violation of its Access to Information Policy. You can learn more about filing an appeal at: https://www.adb.org/site/disclosure/appeals

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.