The ADB Board of Directors approved a $2m grant from the Japan Fund for Poverty Reduction which will be used to fund technology linking microfinance institutions and banks.
According to ADB, it will give at least 20,000 rural migrant worker households access to formal remittance services for the first time.
Mayumi Ozaki, finance specialist (Rural and Microfinance) in ADB’s South Asia Department, said currently many rural migrants and their families are forced to rely on informal remittance outlets which are undocumented and risky, and this project, using debit cards, point of sale terminals and other innovations will allow people in remote areas to send and receive funds through the formal banking system.
The project will fund remittance and financial literacy training and an awareness campaign to provide guidance to returning migrant workers on investment products and employment opportunities. The goal is to help each household save, or invest, an additional $300 annually, said ADB.
Along with the ADB-administered grant, the Government of Bangladesh will contribute $29,000 with banks and microfinance institutions providing nearly $386,000, for a total cost of over $2.4m.
The Ministry of Finance is the executing agency for the project, which will run for three years to 2013.
