BB to offer aid for young businessmen
Bangladesh Bank (BB) is preparing a Tk1,000 crore financing and grant package to support young people who lack the capital to start businesses, with the initiative targeting the creation of at least 5,000 entrepreneurs and expanding employment opportunities across the country.
The proposed fund will combine collateral-free, low-interest loans with grants linked to borrowers’ repayment records and business performance. Of the total allocation, Tk500 crore will be used for loans and Tk500 crore for grants.
BB Governor Md Mostaqur Rahman discussed the initiative with the Association of Bankers, Bangladesh (ABB) at a meeting on Tuesday (11 August) as the central bank works with commercial lenders to finalise the scheme.
After the meeting, ABB Chairman and City Bank Managing Director Mashrur Arefin told journalists that work was under way on a special refinancing and grant package aimed at young people interested in starting businesses but unable to do so because of inadequate capital.
“There is a plan to bring in youths who are interested in starting a business but cannot do so due to a lack of necessary capital,” he said.
Loans at 4-6 per cent interest
Under the proposed refinancing scheme, an eligible entrepreneur will be able to borrow up to Tk10 lakh, with the interest rate expected to remain between 4 per cent and 6 per cent.
The concessional rate would make financing considerably cheaper than conventional bank loans, which generally carry interest rates of around 11-15 per cent, as well as NGO-based microcredit.
The scheme is also designed to provide support beyond the initial loan.
“It also includes a grant facility to help sustain businesses. Considering the timely repayment of loan instalments and business performance, banks plan to provide an equivalent amount as a grant from their corporate social responsibility (CSR) funds,” Mashrur said.
Thus, an entrepreneur taking a Tk10 lakh loan and repaying it on time could potentially qualify for a grant of up to Tk10 lakh, depending on their performance and eligibility, he added.
Officials said the loans would be collateral-free, allowing young people without land or other assets to use as security to access formal financing and establish businesses.
Focus on rural entrepreneurs
The initiative is expected to place particular emphasis on identifying entrepreneurs at the upazila level, according to people familiar with the meeting.
Potential borrowers will be identified and assessed through bank branch managers or designated local committees, with the process intended to reduce the risk of unqualified applicants securing loans through lobbying or undue influence.
Mashrur said banks would divide responsibilities among themselves across more than 500 upazilas to identify and verify prospective entrepreneurs.
The selection process will prioritise business viability, applicants’ skills and the genuineness of their entrepreneurial initiatives.
The fund will not be restricted to a particular type of business. Both manufacturing and trading ventures will be eligible, potentially covering fish farming, livestock, food production, handicrafts, Shatranji manufacturing and other small and medium-sized enterprises (SMEs).
By lowering financing barriers for young people, the initiative is expected to encourage new businesses, strengthen rural entrepreneurship and contribute to employment generation.
