The new Entrepreneurship Support Fund (ESF) will be formally launched on August 12, replacing the existing Equity and Entrepreneurship Fund (EEF).
The Bangladesh Bank (BB) will start receiving Expression of Interest (EOI) on the day from the entrepreneurs seeking new loans from the fund, according to its recent circular.
The Ministry of Finance (MoF) has approved the new funding initiative, designed to recover disbursed loans properly in line with a time-befitting policy, officials said.
The government had created the EEF in the fiscal year 2000-01 to extend support to the two promising sectors -- agro-based food-processing and information and communication technology (ICT) -- for which Tk 1.0 billion was allocated.
However, the government could neither properly monitor the EEF's activities nor make the fund receivers accountable to it due to various legal loopholes, they added.
The initiative to launch the ESF was taken considering it necessary to recover disbursed funds properly as well as to prepare a time-befitting policy.
According to the ESF proposal, a minimum of Tk 8.0 million and a maximum of Tk 50 million loan support will be provided to the agro-based and food-processing industries.
A maximum of Tk 120 million funds will be given to each machinery-dependent agro-based project.
Besides, ICT-based projects will be entitled to get a minimum of Tk 5.0 million and a maximum of Tk 50 million in loan assistance.
The ESF will support up to 49 per cent of a project's cost, while the entrepreneur concerned will invest the remaining 51 per cent.
The loan tenure will be eight years with 2.0 per cent simple interest rate.
A sanction board and an evaluation committee will be formed for each of the two sectors, and members of the boards and the committees will receive honorarium.
The central bank was the implementing agency of the EEF project until May 2009. Later, the operational function of the fund was transferred to the Investment Corporation of Bangladesh (ICB).
However, BB has been formulating fund management policies for EEF and monitoring its investment-related activities.
Since its inception, the government has allocated Tk 20 billion in favour of the fund, of which Tk 15.13 billion went to agriculture sector and Tk 5.12 billion went to ICT sector as of March last year.
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