BB to form Tk 500cr fund for startups
Bangladesh Bank yesterday decided to form a good Tk 500 crore fund to help startups commence organization. The central bank's plank of directors took your choice to enable the brand new entrepreneurs to avail funding from banks smoothly.
"It is really a good initiative, without doubt," said Syed Almas Kabir, president of the Bangladesh Association of Software program and Information Services.
"Access to financing has been a big challenge for startups over the last couple of years. This will help address that problem," he said.
An Entrepreneurship Support Fund shaped previous by the central lender is yet to be popular, he said. It isn't possible for many IT entrepreneurs to comply with its collateral conditions, such as territory and flats, explained Kabir.
"We expect that the learnings of the fund should be considered during policy formulation linked to the fund. Our asset is definitely intellectual property and there is absolutely no guideline for valuation of intellectual residence such as for example software," he said.
"If a guideline in valuation of intellectual property is developed, entrepreneurs can get financing against their program. This will inspire startups and expansion of a culture of innovation," he said.
Shameem Ahsan, president of the CAPITAL RAISING and Private Equity Association of Bangladesh, also welcomed your choice.
"We think the fund ought to be channelled through capital raising firms so as to make sure proper compliance with the regulation," he said.
"The startups will also get mentorship. Anticipated outcome may not arrive if the finance is disbursed through federal government agencies," he said. Bangladesh Lender is yet to draw up a detailed insurance policy to this end, said a central lender official.
Nevertheless, a draft Bangladesh Lender guideline says it will be disbursed by using a refinance scheme, meaning banks would primary disburse loans among customers and the central bank would soon after reimburse the fund to banks.
Entrepreneurs old 21 years and over will be eligible for a maximum of Tk 1 crore from the fund paying a maximum four % interest while banks are certain to get it again from the central lender at 0.50 % interest rate.
The repayment tenure is a maximum five years.
Entrepreneurs with ground breaking ideas will get priority even though their educational qualification, technical expertise, knowledge and social acceptance might be studied into consideration just as collateral would.
Banks will be permitted to keep more affordable provisioning against the loans in comparison to that required for regular loans.
Currently 20 % of a classified loan of sub-standard category needs to be kept as provisioning.
But loan providers will be permitted to keep 5 % in provisioning against the start-up loans.
Banks must keep 30 % provision for doubtful loans and 50 per cent for bad loans beneath the start-up fund whereas it really is 50 % and 100 % for both types of standard loans.
Keeping lessen provision against the start-up fund will encourage banking institutions to disburse loans to fresh entrepreneurs.
In addition, every bank must form independent start-up funds by method of taking money from their unique sources, said the central bank official.
