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The Asian Development Bank (ADB) has approved a $100 million concessional loan to expand access to affordable and climate-resilient housing finance for low- and middle-income households in Bangladesh, with a particular focus on women.
The financing will support the Inclusive Affordable Housing Finance Project, which will channel funds through the Palli Karma-Sahayak Foundation (PKSF) and eligible microfinance institutions (MFIs) to provide long-term, collateral-free housing microfinance loans.
The loans will help families construct, repair and upgrade their homes, particularly households with informal incomes that are generally unable to access conventional mortgage financing, according to an ADB press release.
The project seeks to address Bangladesh’s significant shortage of safe and affordable housing while expanding access to housing finance for underserved households.
“Housing is a critical foundation for dignity, opportunity and resilience,” said ADB Country Director for Bangladesh Qingfeng Zhang.
“By helping low- and middle-income families, especially women, invest in safer and more resilient homes, this project will contribute to Bangladesh’s broader goals of reducing poverty, strengthening social protection, enhancing human development and fostering more inclusive and sustainable economic growth,” he added.
By 2031, the project is expected to provide housing loans to at least 40,000 households, including at least 32,000 women and at least 24,000 borrowers living in areas vulnerable to natural hazards.
The project will also promote financial and land literacy and raise awareness of housing rights. It will seek to strengthen housing security for women through strict documentation of borrowers’ spousal residency arrangements.
To improve the resilience of housing and support the long-term expansion of housing microfinance across the country, the project will integrate resilient design, construction and shock-protection measures into supported homes.
These measures are intended to help houses better withstand flooding, cyclones, extreme heat and other impacts of disasters and extreme weather events.
The project will also contribute to strengthening Bangladesh’s housing finance ecosystem and encouraging greater private-sector participation. To this end, it will enhance the capacity of PKSF and participating MFIs through improved data and risk-management systems, hazard-risk screening, portfolio monitoring and digital reporting.
The $100 million financing package includes $40 million from ADB’s climate adaptation financing, while an additional $600,000 in technical assistance grants will support implementation.
The project comes as Bangladesh faces continuing challenges in expanding access to safe housing finance for households whose informal incomes and lack of conventional collateral often prevent them from obtaining mortgage loans from traditional financial institutions.
ADB is a leading multilateral development bank supporting sustainable, inclusive and resilient growth across Asia and the Pacific. Founded in 1966, it is owned by 69 members, including 50 from the region.