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Entrepreneurs from Ages 21-45 Will Be Getting Start-up Loans 

The central bank of Bangladesh, Bangladesh Bank, has announced this Monday that it will be providing support to entrepreneurs in their startup ventures. The bank will be giving them chances to apply for loans from the new startup fund it has created. There will be certain conditions applied, of course. But this has huge potentials to push the young generation to take up entrepreneurial ventures. The age limit to apply for this startup fund is from 21-45.

Entrepreneurs from Ages 21-45 Will Be Getting Start-up Loans

The startup fund by Bangladesh Bank will be solely dedicated to entrepreneurs with fresh and new ideas that will help the economy and create employment opportunities. It will be a loan amount and completely secured with privacy. The bank has stated that entrepreneurial ideas and the confirmation or rejection of the ventures will be kept secret. The ideas will not be disclosed and will be kept secret. 

The installments for the repayment of the loans will be in 3/6 months frequency, the maximum tenure period will be granted as one year depending on the state of the project or initiative. The loans will be for five-year terms and the interest rate will be kept a steady 4% annually. The maximum loan amount per startup is 1 crore BDT. 10% of the fund will be prioritizing women entrepreneurs. 

This 500 crore BDT startup fund policy obviously has certain conditions. The startup ideas and innovations have to be creative, technologically sane, ecologically and economically sustainable, has to have the possibility of becoming commercially successful, will create jobs and bring in internal resource maximization. This fund is also going to be used as a refinancing fund.

The policy also dictates that the applicants need to be certified by government official or valid authorities. If not, the applicant may require to show practical knowledge and experience in management of new ventures, as alternative to technical and formal training.  

Loan defaulters will be rejected from eligibility. This will be a one-time opportunity for a singular project, only if a startup receives the loan. Also, the money will be disbursed gradually, not all at once, depending on the progress of the startup. The disbursement will happen after the evaluation of the venture the startups will propose. 

Educational certificates or technical training certificates will have to be submitted for evaluation. Testimonies of two guarantors will be necessary as well, who will be acceptable by both the bank and the applicant. The maximum guarantor requirement is two. 

Banks will be setting up a separate startup fund. The 1% of operating profits that they will be acquiring will be used to set it up. Starting from 2021, banks must set 1% of their operating profits from December 2020, in order to contribute in their funding. This will be creating two funds, one by the central bank and the other will own funds of the banks. The disbursement will be coming from both funds. 

There will be certain policies in works so the banks can join hands with the central bank. The funding process will start by the bank’s giving out loans from own funds first and then move on to approving loans from the central bank fund.  The banks will need to go into an agreement with the central bank authorities. Banks will be needing a separate policy which will have to be approved by the bank’s board of directors.

In case of defaulter, where the applicants may fail to repay the loans within allotted time, they will be classified under the policy that already exists. Banks will be keeping 5% provision for classified or substandard loans, 30% for harmful or bad loans and 20% for dubious loans. 

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