Bangladesh Bank to Provide Financing of Up to Tk 2 Million to Young Entrepreneurs

PNN News Desk | Dhaka

Bangladesh Bank has launched a new financing programme aimed at developing young people into entrepreneurs and increasing employment opportunities at the grassroots level. Under the initiative, titled “Udyog: Upazila-Based Young Entrepreneur Identification, Selection and Financing Programme,” selected entrepreneurs will be eligible to receive financing of up to Tk 2 million without collateral.

The central bank's SME and Special Programmes Department issued the relevant policy on Sunday (September 13). The policy was sent to the managing directors and chief executive officers of all scheduled banks in the country.

Under the new programme, applicants must be no older than 28 years on the application deadline. They must also be Bangladeshi citizens and permanent residents of the respective upazila.

However, loan defaulters, individuals who have previously taken business loans from any bank or financial institution, and people employed by government, semi-government or autonomous organisations will not be eligible for the facility.

The Bangladesh Bank policy covers both new and existing legitimate business ventures. Eligible sectors include technology startups, agriculture, food processing, light engineering, renewable energy and handicrafts, among others.

One of the key features of the programme is “blended finance.” After assessing the business requirements and estimated costs, an entrepreneur will be eligible for financing of up to Tk 2 million. Half of the amount will be provided as a bank loan, while the remaining half will be provided as a matching grant.

For example, if an entrepreneur requires Tk 1.2 million to start or operate a business, the entrepreneur will receive Tk 600,000 as a loan and an equal amount of Tk 600,000 as a grant. The loan and grant portions will be deposited into the entrepreneur's bank account at the same time.

However, if the loan is not repaid on time or misuse of the funds is established, the grant portion will also be converted into an interest-free loan. The amount will then be recovered according to existing laws and regulations.

To identify eligible entrepreneurs, Bangladesh Bank will designate a lead bank for each upazila. Interested applicants will be able to collect and submit application forms through branches of any scheduled bank in the country.

Following the initial process, applications will be forwarded to the relevant department of Bangladesh Bank through lead banks at the upazila and district levels. Final selection will be based on the entrepreneur's business plan, market potential and ability to create employment.

A special panel comprising Bangladesh Bank and scheduled-bank officials, successful entrepreneurs, representatives from relevant industrial sectors and academics will be involved in the selection process.

The policy states that loan approval for finally selected entrepreneurs should be completed within 17 working days.

Support under the programme will not be limited to financing. Participating banks will provide selected young entrepreneurs with training in financial management and literacy, business mentoring and assistance in establishing market linkages. They will also provide necessary support in completing initial formalities such as obtaining trade licences and registering businesses.

Bangladesh Bank expects the initiative to create new entrepreneurs at the upazila level, expand self-employment opportunities and increase the participation of young people in local economies. In particular, the availability of both collateral-free financing and grants could create new opportunities for young people interested in starting businesses.