Ensuring proper use of ESF    

Published: January 17, 2019 22:05:16 | Updated: January 19, 2019 22:05:25

The launching of the Entrepreneurship Support Fund (ESF) for agro-based projects in July last year heralded a fresh journey for this funding initiative. Actually its legacy goes back to the Equity and Entrepreneurship Fund (EEF) created in 2000-01 in order to promote entrepreneurship and create employment opportunities in the non-traditional and innovative sector of agro-based industry. By now the country's range and scope of agro-based enterprises have diversified and expanded. Managed by the Bangladesh Bank for nearly two decades, the EEF initiative has been renamed and placed under the management of the state-owned Investment Corporation of Bangladesh (ICB). Now the central bank has sought an allocation of Tk 8.0 billion for the ESF projects for the financial year 2019-20. That the ICB sanctioned over Tk 34.57 billion against 1,923 projects related to agriculture in so short a time (between July and November last), apparently speaks of increasing interest of prospective fund-seekers in setting up agro-based enterprises.        

If the fund received by entrepreneurs is used properly in viable projects, not only are they going to benefit from those projects but also the employees, the village community and by extension the entire country stand to reap dividends. It is exactly how industrial and economic growth has been driven ahead in industrially developed nations. China is the latest example of such growth. But this country's efforts in spurring such growth remain half-way-house. Of the total amount sanctioned, Tk 14.26 billion was disbursed to help support projects. How many of the 1,923 projects received the fund was not unfortunately reported. It is important to set the criteria for project selection and fund disbursement. Past experiences in this regard are not always happy. There are instances that party men availed of the opportunity of similar financial support for agro-industry in the past only to divert it to purposes other than industrial production.

This time the number of projects sanctioned in a short time makes the initiative somewhat suspect. The sanctioning authority should have the prerogative of evaluating such agro-projects as critically as possible to determine their viability. Unless fully sanguine about the capacity of production and marketing scope of the products either in domestic market or foreign countries, there is no point going ahead with fund allocation. It is too early to know how the entrepreneurs who have already received fund are performing. Evaluation of their performance may give an indication of the process of the selection of enterprises and fund allocation for them.

Understandably, most such enterprises are likely to be in the small and medium enterprise (SME) category. There is no doubt that people in this country have been increasingly demonstrating their innovative power and skill in the area of trade and industry. Whoever could imagine that ash from jute stalks could be exported to a foreign country! There are many such out-of-the-box initiatives some young entrepreneurs have come up with. They must be supported as much as they deserve. Yet not in all such cases should the initiative receive financial backing particularly when those cause environmental degradation. The jute stalk burning is one such venture. Better not encourage such initiatives.

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