The Board of Directors of Bangladesh Bank has approved a Startup Fund of Tk 500 crore to lend at low interest for aspiring entrepreneurs in innovation. The approval was given at the 412th board meeting of the central bank on Thursday.
Anyone over the age of 21 will be able to get loans from the fund and can borrow a maximum of Tk 1 crore for their new and innovative ventures. The highest tenure for loans from the fund would be five years.
Along with Bangladesh Bank funds, banks will have to form a similar fund from their own startups with 1 percent of the operating profit.
Loans can be taken only once for each venture, said another BB official involved in the formulation of the fund.
The educational qualifications, technical experience, personal, social and group guarantee of the entrepreneur can be accepted as collateral.
The entrepreneur can repay the loan on a monthly or quarterly basis.
On the other hand, if failing to repay the loan in due course, S/he will default on the existing rules. But in this case, banks have to keep the promotion less.
When asked about the new funds, Sayed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS), told a local media that such funds would encourage engaging in innovation culture.
He said that for the last seven to eight years, start-ups have been launched in the country but success has started for four to five years.