Both support facilities were critical to the crisis response of Bangladesh as no other development partners provided any crisis-related assistance or program support during the program period. However, the pricing (interest spread of 200 basis points above the London Interbank Offered Rate or LIBOR) and maturity (5 years) of the CSF loan makes it is less suitable for a poorer country like Bangladesh. While the higher pricing and the fixed 5-year tenor of the CSF took into account various considerations including containing the demand and rationalizing the allocation to each of the selected developing member country out of the limited CSF pool,17 it may be too hefty for Bangladesh with growing financing gaps and given the safety net nature of the program. A blend of higher borrowing costs to support policy actions that generate higher economic rates of returns on the supply side (such as SME development and public-private partnership or PPP investment) may be more desirable.
Public Expenditure Support Facility Program and Countercyclical Support Facility Support Program