WASHINGTON— The World Bank today approved additional financing of US$15 million to the Government of Bangladesh, designed to support poor rickshaw-pullers that have been adversely affected by a ban on Non-Motorized Transport (NMT) on certain roads in Dhaka, the nation’s capital.
The additional financing to the Second Poverty Alleviation Microfinance Project, which was approved by the World Bank in January 2001, will help finance the costs associated with scaling up the Urban Microcredit component of the project to reach an underserved segment of the urban poor (poor rickshaw-pullers). The financing will be passed-on by the Government as a grant to the apex microfinance institution Palli Karma-Sahayak Foundation (PKSF) for activities that will scale up the project’s impact and development effectiveness.
“This additional financing builds on a highly successful project. It has reached 3.5 million borrowers, including some 335,000 urban poor,” said Shamsuddin Ahmad, World Bank Senior Financial Sector Specialist and project team leader.” With the help of the microfinance services offered to the rickshaw pullers affected by the non-motorized transport ban, it is expected that they and their families would be able to restore their livelihoods.”
It is expected that about 40,500 of the adversely affected poor rickshaw owners, their family members, and those pullers that would like to give up rickshaw-pulling in favor of a new career, and other poor and vulnerable groups will be provided with microcredit and other services. As the NMT ban is extended to other roads in Dhaka more of the affected non-motorized pullers will be covered under this program. Apart from direct microcredit loans, the borrowers will also be provided with training in technical skills to facilitate career change.
The credit from the International Development Association (IDA), the World Bank’s concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 percent.
Source: World Bank
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