Tk 20 lakh youth enterprise push goes nationwide

Bangladesh Bank has launched a nationwide youth entrepreneurship drive, opening the door to as much as Tk 20 lakh in blended financing for young entrepreneurs in every upazila in a bid to turn job seekers into job creators.

Under the new “Udyog: Upazila-Driven Youth Opportunity for Growth” scheme, eligible young Bangladeshis will receive financing comprising up to Tk10 lakh in bank loans and another Tk10 lakh in matching grants, with no collateral required.

The central bank issued the comprehensive guideline on Sunday through its SME and Special Programmes Department, directing managing directors and chief executive officers of all scheduled banks to implement the programme immediately.

The initiative marks an aggressive push to take formal financing beyond major cities and put capital directly within the reach of young entrepreneurs across the country.

The scheme covers a broad range of legal businesses, including technology startups, agriculture, food processing, light engineering, renewable energy and handicrafts, while supporting both innovative ideas and viable existing business models.

To prevent the programme from becoming a soft-loan window for ineligible borrowers, Bangladesh Bank has imposed strict conditions.

Applicants must be Bangladeshi citizens aged up to 28 years, permanent residents of the respective upazila and free of loan defaults. Any adverse finding in the Credit Information Bureau (CIB) report will lead to immediate cancellation of the application.

Anyone who has previously taken a business loan from a bank or financial institution will also be barred from the scheme. Employees of public, semi-government and autonomous institutions are likewise ineligible.

The most striking feature of the programme is the absence of collateral requirements, potentially removing one of the biggest barriers facing young entrepreneurs who have ideas but lack property or other assets to pledge against bank loans.

The maximum financing package will be Tk20 lakh per selected entrepreneur, although the amount will be determined according to the actual business requirement and proposed cost structure.

The package will be divided equally between a bank loan and a matching grant. Thus, an entrepreneur requiring Tk12 lakh would receive Tk6 lakh as a bank loan and Tk6 lakh as a grant.

Both components will be credited simultaneously to the entrepreneur’s bank account.

The grant, however, comes with a critical condition. If the borrower fails to repay the loan or misuses the funds, the grant portion will automatically be converted into an interest-free debt, recoverable under the applicable loan-recovery laws.

Bangladesh Bank will appoint a Lead Bank in every upazila to coordinate implementation, creating a nationwide institutional network for identifying and financing promising young entrepreneurs.

Applications will be collected through branches of scheduled banks. On the working day after the application deadline, branches will forward the applications to the respective Upazila Lead Bank, which will send them to the District Lead Bank before they reach the relevant Bangladesh Bank departmental offices.

Final selection will be made by a multi-stakeholder panel comprising Bangladesh Bank officials, representatives of scheduled banks, successful entrepreneurs, industry leaders and academics.

The panel will assess the quality of business plans, market feasibility and potential for employment creation, shifting the focus from collateral-based lending towards the viability and economic potential of an entrepreneur’s idea.

Once the final selection is made, designated banks must sanction the loans within 15 working days, subject to their internal credit procedures and Bangladesh Bank regulations.

The initiative also goes beyond financing. Participating banks will provide financial literacy training, mentoring, market-linkage support and assistance with business registration, aiming to give new enterprises a better chance of surviving beyond the initial funding stage.

The scheme comes at a time when Bangladesh faces a pressing need to create productive employment for its rapidly expanding young population while diversifying economic activity beyond traditional sectors.