21-Year-Old Entrepreneurs Eligible for Startup Fund Support

In a landmark move to bridge the policy gap in startup investment, Bangladesh Bank has issued a comprehensive ‘Master Circular’ to formalize and facilitate funding for startups. While the central bank has previously provided support through refinancing schemes, startup loans, and various incentive packages, this is the first structured directive aimed specifically at streamlining investment in the startup sector.

On Wednesday, July 9, the SME and Special Programmes Department (SMESPD) of Bangladesh Bank issued the circular to the chief executives of scheduled banks and financial institutions. The directive outlines the definition and characteristics of startup ventures, sources of funding, and eligibility criteria for financing.

According to the circular, signed by SMESPD Director Nawshad Mostafa, banks are required to contribute 1% of their net profit—reported annually in their audited financial statements—into their own startup funds. This regulation has been in effect since 2021. From these funds, banks may provide startups with loans, investments, or equity financing.

Startups aged no more than 12 years are eligible under this program. For ventures registered for less than two years, banks can provide working capital or term loans of up to BDT 20 million. Startups aged between two and six years can access up to BDT 50 million, and those between six and twelve years are eligible for up to BDT 80 million in funding.

To qualify as a startup under the circular, the venture must be a technology-driven enterprise, either domestically or jointly established with international partners, offering innovative products or services with high potential and scalability.

Scheduled banks will also be able to borrow funds from Bangladesh Bank at a concessional interest rate of only 0.5% from a BDT 5 billion fund established by the central bank. These funds may be lent to startups at a maximum interest rate of 4%. Additionally, every year, 1% of a bank’s net profit will be pooled into a separate venture capital fund managed by Bangladesh Bank. From this fund, banks will be permitted to make equity investments in eligible startups.

However, the directive mandates that entrepreneurs must be at least 21 years old to qualify—an age requirement that has sparked mixed reactions.

Critics argue that the age restriction may exclude younger innovators. “In our country, even at 18 or 19, many youths are unfamiliar with financial systems. Some lack interest in operating a bank account. Yet some of them already have solid ideas,” said M Manjur Mahmud, President of Datasoft Systems Bangladesh Ltd. “There should be no age limit for startup entrepreneurs. The opportunity should begin from the legal age one can obtain a trade license.”

Conversely, Fahim Mashroor, founder of BDJobs and a pioneer in Bangladesh’s startup ecosystem, supports the age requirement. “This is appropriate,” he said. “Before the age of 21, most individuals cannot handle the necessary documentation required for business planning.”

Mohammad Mahdee Uz Zaman, Founder of Bangladesh Cloud Camp and Director at Virtustream Cloud Group in the US, welcomed the initiative. “When I traveled beyond major cities, I found many capable individuals solving local problems with technical proficiency,” he said. “With proper guidance and access to these opportunities, they can scale their ideas further.”

The initiative marks a critical step forward in institutionalizing startup financing in Bangladesh and expanding the reach of entrepreneurship beyond urban centers.