Country's startup entrepreneurs will have easy access to loans for starting their businesses as Bangladesh Bank have asked all the scheduled banks to form their own start-up fund with 1.0 per cent of their net profits.
"To provide start-up entrepreneurs with loans, all the scheduled banks have been asked to keep 1.0 per cent of their net profits for the next five years from 2021," said Bangladesh Bank (BB) in a circular recently.
The central bank has amended its policy allowing all banks to form their own start-up fund with 1.0 per cent of net profits instead of operating ones earlier, said Executive Director and BB's spokesperson Serajul Islam.
He said formation of the startup fund will start with 1.0 per cent of net profits on the basis of the December's financial statement for 2020.
"We've amended the policy, considering the size of the fund," said Serajul Islam.
The size of the fund is expected to be around Tk 28 billion if the banks establish their own start-up funds with 1.0 per cent of their operating profits, said a BB official.
Besides, the banks will also be able to use the central bank-formed Tk 5.0 billion refinancing fund after completing disbursement of their own start-up funds.
Earlier on March 29, the central bank formed a refinancing fund amounting to Tk 5.0 billion aiming to help expand and flourish of startups in Bangladesh.
The central bank has also set eligibility requirements for the banks to utilize its Tk 5 billion start-up refinancing fund.
All state-owned and private commercial banks or specialised banks may avail the refinancing facility. But their classified loans cannot be more than 10 percent.
Under the existing provisions, entrepreneurs aged between minimum 21 years and maximum 45 years will be eligible to get loan of maximum Tk 10 million from the fund with the highest interest rate at 4.0 percent.
The repayment tenure will be a maximum of five years with one-year grace period.
Entrepreneurs with innovative ideas will get top priority while their educational qualification, technical expertise, experience and social acceptance can be considered as collateral.
A startup is a newly formed venture with particular momentum behind it based on perceived demand for its products or services. The intention of a startup is to grow rapidly as a result of offering something that addresses a particular market gap.
Currently, the number of startups is more than 1,000 and is estimated to grow multifold in tandem with the digital ecosystem, according to a report of LightCastle Partners, a business consulting firm.
