Bangladesh Bank is planning to establish a Tk 1,000 crore special fund to support young entrepreneurs by providing low-cost loans and performance-based grants.
The initiative aims to create at least 5,000 new entrepreneurs, with Tk 500 crore earmarked for loans and another Tk 500 crore for grants.
Bangladesh Bank Governor Mostaqur Rahman discussed the proposed initiative with leaders of the Association of Bankers, Bangladesh (ABB) at a meeting on Tuesday.
Speaking after the meeting, ABB Chairman and City Bank Managing Director Mashrur Arefin said the central bank was working on a special refinancing and grant package for young people who want to start businesses but lack adequate capital.
Under the proposed refinancing scheme, an entrepreneur could receive up to Tk 10 lakh in loans at an interest rate of 4% to 6%. This would be significantly lower than the prevailing 11% to 15% interest rates on conventional bank loans.
The proposed loans would not require collateral, allowing young people without land or other assets to access financing.
Banks also plan to provide grants from their corporate social responsibility (CSR) funds to entrepreneurs who repay their loans on time and demonstrate good business performance. An entrepreneur receiving a Tk 10 lakh loan could potentially qualify for a grant of up to another Tk 10 lakh, subject to eligibility and performance.
The initiative will place particular emphasis on selecting entrepreneurs at the upazila level. Bank branch managers or designated committees will identify and assess potential entrepreneurs to reduce the possibility of loans being secured through influence or lobbying.
According to Arefin, banks will share responsibilities across more than 500 upazilas to identify and verify potential entrepreneurs. Business potential, skills and the viability of the proposed venture will be considered in the selection process.
The fund is expected to support a broad range of businesses, including fisheries, livestock, food production, handicrafts, sataranji manufacturing and other small and medium-sized enterprises.
