The International Fund for Agricultural Development (IFAD) will provide Bangladesh with an additional loan of US$ 18.07 million to rebuild microenterprises as well as to support smallholders affected adversely by the Covid-19 pandemic.
The additional financing will scale up activities under the ongoing Promoting Agricultural Commercialisation and Enterprises (PACE) project being implemented by the Palli Karma-Sahayak Foundation (PKSF).
With the additional loan, the total value of the PACE project now amounts to $129.81 million, with IFAD financing of $58.07million, said an IFAD release on Thursday.
The funding will complement the government and PKSF’s efforts to assist microenterprises and smallholders and recover the rural economy from coronavirus-induced losses.
This additional loan will finance activities from January 2021 to December 2022 to help restore microenterprises both in the farm and non-farm sectors.
It will also help scale up and strengthen successful value chains under the PACE project.
The PACE project, jointly financed by IFAD, GOB and PKSF, was launched in 2015 with the aim of improving profitable business opportunities for micro-entrepreneurs nationwide as well as creating employment for the extreme and moderately poor.
To date, the PACE project has directly benefitted about 0.321 million micro-entrepreneurs and other actors engaged in value chains.
They have been provided with microcredit support, technical assistance, and technological promotion, and market access facility.
Over the next two years, the project will directly benefit another 0.168 million beneficiaries, including 48,000 microentrepreneurs and 0.12 million value chain actors, said the release.
With the increased demand for finance to rebuild the rural economy of Bangladesh, this initiative by IFAD and PKSF to restore the microfinance sector will increase the disbursement of loans to microenterprises.
PACE will also provide awareness building training on Covid-19 protection protocols developed by PKSF to manage health and hygiene on the production premises to prevent transmission of the disease and other future epidemics.
The additional resources will be invested in three broader agri-business sub-sectors, including horticulture; fisheries and aquaculture; and poultry and livestock; covering 40 districts in Barishal, Chattogram, Dhaka, Khulna, Rajshahi, Rangpur and Sylhet Divisions.
IFAD’s South Asia Hub Head Rasha Omar said: “The impact of the pandemic is long term in nature and requires building back the economy better”.
She said the additional resource is IFAD’s response for rehabilitation of microenterprises and smallholder families who lost their businesses and income due to the Covid-19-induced constraints.
“The initiative will restore their livelihoods and develop strategies to reduce future risks,” she added.