The World Bank is providing $300 million loan to Bangladesh to help create entrepreneurs in the rural areas to facilitate economic recovery from the corona pandemic.
It will also help reduce poverty in Bangladesh by creating resilience among people hit by climate change impacts as well as Covid-19 pandemic.Economic Relations Division (ERD) signed a loan deal with the Washington-based multilateral lender at a function at ERD on Sunday, an ERD release said on Monday.
ERD Secretary Fatima Yasmin and World Bank Country Director Mercy Tembon signed the deal of behalf of their respective sides.
The funds will be utilised to implement "Resilience, Entrepreneurship and Livelihood Improvement (RELI) Project."
It will be implemented to continue activities of another expiring project called "Nuton Jibon Livelihood Improvement Project (NJLIP) of Social Development Foundation, a body under the ministry of finance’s financial institution division. NJLIP will end this June.
The new project has been picked up to lower covid-19 impacts on NJLIP beneficiaries and continue the process of creating entrepreneurs in rural areas using the knowledge earned from NJLIP, ERD officials said.
The $300 million Resilience, Entrepreneurship and Livelihood Improvement (RELI) Project will help improve the livelihoods of about 750,000 poor and vulnerable rural people across 3,200 villages in 20 districts.At first, it seeks to create resilience among families affected by disasters created by climate change or hit by shocks of Covid-19.
As a tool for reducing poverty, it will spread income generating activities, enhance skills and create jobs for rural people to help them come out of poverty bracket.
Finally, it will try to create entrepreneurs in rural areas so that the country economic recovery from Covid-19 becomes faster.
Jean Saint-Geours, World Bank team leader for RELI Project, said the project will provide immediate and tailored livelihood support to rural poor people for responding to urgent needs, improve their ability to cope with future shocks and help them come out of poverty through income-generating activities and skill development.
Apart from the WB’s $300 million loan, the government will bear $40 million and local beneficiaries $1 million out of $341 million total estimated project cost, ERD officials informed.
RELI will be implemented during 2021-2026. The WB loan has a total of 30 years repayment period including five years grace period. Interest rate on the loan will be 1.25 percent while its service charge will be 0.75 percent and Bangladesh has to pay 0.50 percent commitment charge on undisbursed loan amount.
With over 90 percent female beneficiaries, the project will also support entrepreneurship and encourage crop diversification, good nutritional practices, while raising awareness of climate risk adaptation and mitigation, the spread of diseases, and gender-based violence.
The project will also help empower and mobilise rural poor people, prepare them for the future job market and support entrepreneurial opportunities, especially for women and disadvantaged groups.