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The Asian Development Bank (ADB) has approved a $100 million loan to expand access to affordable and disaster-resilient housing loans for low- and middle-income people in Bangladesh. Women and households outside conventional bank lending in particular will benefit from the loan. Of the $100 million, $40 million will come from the ADB’s climate adaptation fund. In addition, a further $600,000 grant will be provided as technical assistance for implementing the project.
The ADB funds will be disbursed through the Palli Karma-Sahayak Foundation (PKSF) and eligible microfinance institutions under it. Under this, long-term and collateral-free microloans will be provided, with which households will be able to build new homes and repair and improve old ones.
An ADB press release said the project has been undertaken to address the shortage of safe and affordable housing in the country and the limited access to housing loans. The initiative will play an important role particularly for households dependent on informal income, as they remain outside the conventional housing loan system.
Qingfeng Zhang, the ADB’s country director for Bangladesh, said housing is one of the foundations of people’s dignity, opportunity and capacity to cope with disasters. By supporting low- and middle-income households, especially women, in building safe and disaster-resilient homes, the project will contribute to achieving the broader goals of reducing poverty, strengthening social protection, developing human capital and inclusive and sustainable economic growth.
Under the project, a target has been set to provide housing loans to at least 40,000 households by 2031. Among them will be at least 32,000 women and at least 24,000 borrowers from areas at risk of natural disasters.
Besides, along with raising financial and land-related awareness through the project, people will also be made aware of housing rights. To ensure women’s housing security, emphasis will be placed on preserving proper documentation of the spousal residence arrangements of borrowers.
To ensure disaster-resilient housing, house construction designs, construction processes and measures for protection from disaster damage will be incorporated in the project. As a result, the houses will become more capable of withstanding the effects of various natural disasters and extreme weather, including floods, cyclones and severe heatwaves.
The ADB says the project will strengthen the country’s housing finance system and also help increase private sector participation in the sector. To this end, the capacity of PKSF and the microfinance institutions will be enhanced. At the same time, information management, risk assessment, disaster risk screening, loan portfolio monitoring and the digital reporting system will be improved.
