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Agribusiness Development :  Bangladesh :Go to Project Summary

Agribusiness Development :  Bangladesh

Timetable  |  Financing Plan and Loan Utilization  |  Project Outcome  |  Implementation Progress  |  Status of Covenants

Loan Name Agribusiness Development
Country Bangladesh
Loan Number 2190
Project Number 33224- 01
Source of Funding/Amount[Approved]
Technical Assistance Special Fund US$600,000
Asian Development Fund US$42.50  million
Sector/Subsector Agriculture and Natural Resources / Agricultural Production and Markets
Description The impact of the Project will be reduced poverty in Bangladesh through agribusiness growth that generates income and employment in rural areas. The outcome of the Project will be expanded activities of rural enterprises engaged in commercial agriculture production, input supply, marketing, processing, and transportation. These will generate employment in rural and peri-urban areas, increase the value added of nontraditional crops and commodities, and increase rural incomes.

Specifically, the Project will target small-scale agribusinesses that do not have the wherewithal to mobilize the financing they require to expand, or the capacity to open up new downstream markets. This will be undertaken with the assistance of NGOs experienced in providing credit and support to rural enterprises at the grassroots level. The rural poor will be the ultimate beneficiaries of all of these actions through enhanced employment opportunities, income generation, and agricultural production.

The Project outputs include (i) establishment, expansion, and successful operation of agribusinesses by small-scale entrepreneurs; (ii) strengthened capacity of participating NGOs and wholesale banks in agribusiness lending; (iii) strengthened capacity of agribusiness associations in policy dialogue and agribusiness information and technology dissemination; and (iv) improved policy environment enabling private sector participation.

Project Outcome
Outcome Progress Toward Outcome
Expanded activities of rural enterprises engaged in commercial agriculture production, input supply, marketing, processing, and transportation [Taken from the Design & Monitoring Framework.] Tk2,729.89 million credit disbursed to 33,432 small scale agribusiness entreprenuers, of which 36% are women.
On an average, employment of about 5.51 persons per entreprise generated.
Implementation Progress
Outputs Status of Implementation Progress (Outputs, Activities and Issues)
1. Agribusinesses by small-scale entrepreneurs established, expanded, and successfully operated.
2. Capacity of participating NGOs and banks in agribusiness lending strengthened.
3. Capacity of agribusiness associations in policy dialogue and agribusiness information and technology dissemination strengthened.
4. Improved policy environment enabling private sector participation.
Small scale entreprenuers under the Project established their enterprises (more than targetted) with project support and services, which are in operation during project's physical completion.
Employment of about 5.51 person per enterprose generated.
Complied with.
36% are women
Ongoing
One survey conducted.
Completed.
Total 8 associations supported. 18 Value chain links established, and are in operation.
Not yet due.
Subborrowers are earning good profit, as reported and observed during ADB project review missions
Around $32.0 million disbursed
A revolving credit fund has been established. The wholesale banks and NGOs will continue disbursing credit after physical completion of the Project. The project physically completed on 31 December 2011.
Ongoing
Planned trainings under the project for NGOs and wholesale banks completed and other capacity devlopement initiatives/ training by the partner NGOs themselves are ongoing. The capacities of partner NGOs and wholesale banks are being strengthened on a continuous basis.
Being complied.
Policy environment started to improve towards more private sector participation in agribusiness promotion, value addition and commercial agriculture, and hopefully will continue to further improve in future.
Actions initiated to establish revolving funds with NGOs and PFIs that will be monitored by Bangladesh Bank
MOU signed with 8 associations and under process with another 7 associations
Recently 8 associations formed. First body formed by selection procedure.
Total 20 workshops held
Total 4 fairs held
MOU signed with 3 service provider associations and training provided to 60 paraprofessionals in three batches.
Being complied.
One survey completed.
Not yet due
Not yet due
Women participates in the workshops.
Ministry of Agriculture and Department of Agricultural Marketing are familiar by this time.
Geographical Location Country-wide
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  Environment FI
Summary of Environmental and Social Aspects
Environmental Aspects The Project will involve many small-scale investments ($500?$5,000 equivalent) around the country. As such, any single activity under the Project is unlikely to have anything other than a minor localized environmental impact, or require any involuntary displacement of local populations. Public sector entities will not expropriate or acquire any land under the Project. Nevertheless, the project design has incorporated safeguards to minimize potential negative effects. Environmental and social impact specialists will be engaged to ensure that the environmental and social concerns of ADB and the Government are incorporated into work planning and monitoring of the Project. Through training, NGO staff will learn about potential negative impacts that might result from the economic activities they will be promoting, as well as the means to avoid or mitigate such impacts.
Stakeholder Communication, Participation and Consultation
During Project Design Extensive consultations and dialogues with stakeholders were conducted by the PPTA Consultant during the course of PPTA implementation. Workshops, participatory meetings, focus group discussions, as well as donor coordination meetings were held between March to August 2004. (Please see Group Consulted for details.)
During Project Implementation The Project support will be demand-driven with all the agribusiness investment decisions made by small-scale agribusiness entrepreneurs. The enterprises sponsored by the Project, as private sector ventures, will continue to operate on a self-sustaining and self-financing basis as long as they are profitable and value adding. The Project will discourage special subsidies or preferential treatment. The Project implementation unit will closely monitor the performance of the agribusiness enterprises. The target has been set that 90% of agribusiness ventures supported by the Project will still operate by the time of the project completion review. It is expected that by 2020 the number of new agribusinesses will be double.

The Project will use well-established, financially sound and well-governed banks to channel funds through reputable and experienced NGOs to small-scale agribusiness entrepreneurs, who are presently unable to access finance for their ventures. The successful growth of agribusiness lending through experienced NGOs will demonstrate to policymakers that the key to expanding rural financial services is engaging capable institutions with the financial and managerial strengths to respond to the growing demands of the market.
Responsible ADB Officer Md. Shahidul Alam
Responsible ADB Department South Asia Department
Responsible ADB Division
Timetable
Concept Clearance 04 Apr 2005
Fact-finding 05 Apr 2005 to 30 Apr 2005
Appraisal 23 May 2005 to 08 Jun 2005
Board Approval 27 Oct 2005
CLOSING
Loan No. Approval Signing Effectivity Original Revised Actual
2190-BAN 27 Oct 05 22 Jun 06 17 Nov 06 30 Jun 11 - -

Financing Plan Top Loan Utilization
  TOTAL ( Amount in US$ million)
Project Cost 42.50
ADB 42.50
Counterpart 0.00
Cofinancing 0.00
Date ADB OTHERS Net Percentage
Cumulative Contract Awards
38,198,471.966 0%
Cumulative Disbursements
39,062,366.580 0%
Top Status of Covenants
Category Sector Social Financial Economic Others Safe
Rating Satisfactory Satisfactory
2008 Asian Development Bank

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