AfDB gives $250 million to strengthen social protection in Bangladesh
The government today signed an agreement with the Asian Development Bank (AfDB) for a $250 million policy-based loan to further improve the social protection system in Bangladesh to support the vulnerable population facing socio-economic challenges.
The program aims to accelerate reforms by increasing the coverage and effectiveness of social protection, improving the financial inclusion of disadvantaged people and strengthening the response to diversified protection needs.
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The loan is the second sub-programme of the Social Resilience Building Program (SSRP) approved in 2021, which has helped implement institutional and policy reforms that have strengthened the inclusiveness and responsiveness of social protection in Bangladesh .
Fatima Yasmin, Secretary of the Economic Relations Division, and Edimon Ginting, AfDB Country Director, virtually signed the agreement as part of a $250 million policy-based lending program.
“The AfDB remains committed to helping Bangladesh accelerate socio-economic recovery and supporting the government in promoting an integrated social protection agenda,” Ginting said.
“The integrated social protection program will improve the management of social safety nets, deepen financial inclusion, respond to needs based on demographic, geographic, age, gender and other diversities and expand the coverage and effectiveness of social protection,” added Ginting.
Reforms supported under the program will help improve efficiency through the digitization and integration of systems as well as the harmonization of government social protection programs, the AfDB said in a statement today. .
Greater financial inclusion of the disadvantaged will be expanded by improving the user-friendliness of mobile financial services through Quick Response (QR) code payment services, especially in rural areas.
The program also supports a contributory protection scheme with an emphasis on a workers’ compensation insurance scheme. This contributory protection scheme will provide protection to a wider population and help increase public financing of social protection.
The reforms will help Bangladesh integrate at least 80% of social protection programs with cash benefits into a standardized and integrated management system with connection to the G2P platform by June 2023.
At least 60% of social protection cash benefits will be paid to disadvantaged women, and the fragmentation of social protection programs will be reduced in three ministries.
The number of active mobile financial services accounts will increase by 5% per year.
At least 50 mobile clinics will start operating in 10 municipal corporations.
At least one social insurance scheme (contributory protection scheme) will be launched on a pilot basis by 2023.
In 2021, cumulative AfDB assistance to Bangladesh since 1973 amounted to approximately $48 billion in the form of loans, grants and co-financing.
The AfDB’s active portfolio in the country stands at around $11 billion with 50 projects as of April 2022.
The AfDB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while continuing its efforts to eradicate extreme poverty. Founded in 1966, it is owned by 68 members, including 49 from the region.