BB plans Tk 1,000 crore fund to help 5,000 entrepreneurs

Bangladesh Bank is preparing to launch a Tk 1,000 crore refinancing fund, tentatively named "Uddyog", to support young entrepreneurs across the country with low-interest, collateral-free loans. The central bank aims to help around 5,000 young people start or expand small businesses.

The plan was discussed on Tuesday at a meeting between Bangladesh Bank Governor Mostakur Rahman and leaders of the Association of Bankers, Bangladesh. The meeting focused on the fund's structure, lending policy, beneficiary selection, and the role of commercial banks in implementing the programme.

After the meeting, ABB Chairman and Masrur Arefin told reporters that the fund is being designed for young people aged around 25 to 27. Under the refinancing scheme, banks will borrow funds from Bangladesh Bank and provide loans at a low interest rate of around 4 to 6 percent. Each entrepreneur may receive up to Tk 10 lakh to start a business.

He said banks are also considering giving a grant equal to the loan amount through their corporate social responsibility (CSR) funds. If approved, a young entrepreneur could receive Tk 10 lakh as a loan and another Tk 10 lakh as a grant, making a total of Tk 20 lakh in financial support.

Masrur Arefin said the programme will mainly target young entrepreneurs at the upazila level. Banks will identify suitable candidates in assigned upazilas, and those who repay their loans successfully may become eligible for additional grants.

He said even if only about 100 successful entrepreneurs emerge from financing 5,000 young people, it could create a new wave of entrepreneurship across the country. The key challenge, he added, is selecting the right candidates without outside influence.

The fund is expected to start with Tk 500 crore before being expanded to Tk 1,000 crore. Eligible businesses may include manufacturing, agriculture, fisheries, small enterprises and even home-based food businesses.

Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said the proposal is still at an early stage. The name "Uddyog," the fund size, loan amount, interest rate and eligibility criteria have not yet been finalised. He said the discussion with bankers was held to gather ideas before the central bank takes its final policy decisions.

-HMS/SA