Bangladesh Municipal Development Fund (BMDF) a company under the Ministry of Finance Government of Bangladesh. The decision of forming Bangladesh Municipal Development Fund (BMDF) was taken by the government in 1999, and in 2002 the company was registered under the Companies Act, 1994 for providing financial and technical support to the Urban Local Bodies (ULBs).  The main purpose of forming such a body is to bring about qualitative improvement of the living condition of the municipal people through infrastructure development and environment improvement. The newly emerged BMDF has embarked upon a unified program for sustainable growth and development of the city corporations and municipalities of the country. Its main purpose has been to provide both financial & technical support to the ULBs with an aim to help them become self-sufficient.

The urban problems caused mainly due to the pressure of migrants have been and are being discussed in many programmes including seminars, conferences, round table talks, discussion, media both print and electronic at home and abroad, which are participated by government officials, politicians, urban pundits, academics, professionals, experts, editors of media, members of development partners, civil society, NGOs, beneficiaries, stakeholders, and others. The most important concern that has come out from such seminars is that the urban places suffer from improper and inappropriate management. At the same time, it is also realized that with the trend rapid of urbanization, poor economy of a large number of ULBs, inadequate technical knowledge at the fields, weak institutional and functional capacity in ULBs, resource constraints of the government, among others, are the major obstacles on the way to ensure better management of the urban bodies. Of the efforts for finding out a good option, the WB came up with an idea of forming a body to trust with the responsibilities of development of infrastructure and conservation of environment of the ULBs in the country. As such, the WB met on August 31, 1997 to review a concept paper, then authenticated the approval/negotiations on April 15, 1998, and finally approved for necessary funding on April 16, 1999 to an urban organization the GoB deemed it fit to form.