ADB to lend $1bn for rural finance

Manila-Based Asian Development Bank (ADB) is likely to lend $1bn (nearly Rs 4,670 crore) to the government to undertake a rural finance project through cooperatives this year.

“One specific project we are financing is rural finance through cooperatives. ADB is providing assistance this year in the amount of $1bn,” ADB director general for South Asia Kunio Senga told PTI. Mr Senga said the loan negotiations are expected sometime in October or November this year.

It will be a 20-year-loan and the interest rate is likely to be 40 basis points over the six months Libor (London Inter-bank Offered Rate). Mr Senga said ADB is essentially aligning with government priorities and one strong priority of the government is rural area development.

“Government has now a national programme to improve the system of cooperatives. With the legal assistance provided by ADB, they have now come up with a good framework,” he said.It is a big project, he said, adding that ADB will continue to work for the improvement of rural areas.