The International Fund for Agricultural Development (IFAD) began operations in Bangladesh in 1978, entering into co-financing arrangements with IDA and ADB to meet the challenges of curbing widespread and prevalent poverty in the country.

During the 19 years of partnership with the Government, IFAD has progressively laid higher emphasis on equity issues, its second phase (from 1984 onwards) projects being more oriented towards poverty alleviation than projects in the first phase (1978-1983) which mainly supported the Government's food grain production strategy. On average IFAD has financed 45% of total project cost, the remaining 55% being met by the Government as local expenses.

The IFAD programme has increasingly targeted the rural poor comprising marginal and small farmers, the landless, traditional occupational groups and women, for the delivery of services which include credit, irrigation equipment and other farm inputs, adaptive research and extension, and rural infrastructure to improve accessibility to inputs and product markets.

To achieve its objectives and goals IFAD cooperates and collaborates with Government agencies and parastatals such as the Department of Agriculture Extension, Department of Livestock Services, Department of Fisheries, financial institutions such as the Bangladesh Krishi Bank, the Agrani Bank, and the Grameen Bank, NGOs such as BRAC, Proshika, and Swanirbhor-Bangladesh, and rural cooperative systems such as the Bangladesh Rural Development Board.

IFAD's emphasis on specificity and beneficiary targeting has led to the development of instrumentalities such as group formation, group-based extension, new credit models, people's participation and decentralisation of the development process. This evolution in project design and new, distinctly pro-poor development methods is one of the greatest successes of the IFAD programmes in Bangladesh.

IFAD has effectively contributed to poverty alleviation through increasing the access of smaller farmers to improved technology, capital and financial services; increasing the participation of beneficiaries, including women, in the project implementation process; promoting the diversification of income-generation activities; and supporting entrepreneurship development of the rural poor.

Maintaining an average disbursement rate of around 80% in the 1978-1993 period, IFAD has provided Bangladesh with loans amounting to nearly SDR 206 million of which about SDR 62 million is for disbursement between 1988-2002.