Bangladesh Bank (BB) has issued policy guidelines for the special financing scheme called Udyog to create new-generation entrepreneurs across the country.
In a circular issued Monday, the central bank stated that applications from the interested entrepreneurs will be received from September 16 and the month-long timeline will expire on October 15.
Initially, the program will be implemented in all 64 upazilas of eight selected districts -- Manikganj, Feni, Naogaon, Jhenaidah, Bhola, Habiganj, Rangpur and Netrakona -- covering one district from each of the country's eight divisions.
Interested candidates will be able to download application forms from BB's website, the SME portal and the websites of scheduled banks before submitting them to any scheduled bank branch located in their respective upazila, according to the guidelines.
Applicants will not be required to maintain a prior account with the receiving bank, while no application fee will be charged.
To qualify, applicants must be Bangladeshi citizens aged 28 years or below as of the closing date, be permanent residents of the upazila concerned, and possess either an existing business initiative or a viable business plan for establishing a new enterprise.
However, individuals classified as loan defaulters by any bank or financial institution, as well as employees of government, semi-government or autonomous organizations will not be eligible for financing under the program.
The Udyog scheme offers blended financing of up to Tk20 lakh, comprising a maximum Tk10 lakh bank loan and an equal amount of grant on a 50:50 basis.
The amount would be determined according to the entrepreneur's actual business needs and proposed expenditure.
Bangladesh Bank said collateral would not be mandatory for the loans, and both the loan and grant would be disbursed simultaneously in a single installment directly to the entrepreneur's bank account. No cash payment will be made.
The guidelines also stipulates that if a borrower fails to repay the loan within the prescribed period or is found to have misused the funds, the grant component will be converted into a recoverable government loan in accordance with existing laws.
Beyond financing, the program will provide financial literacy training for all applicants, while selected entrepreneurs will receive business development training, mentoring, support for business registration and business plan preparation, and market linkage facilities.
The banking regulator warned that any attempt to influence the selection process or submission of false information would result in immediate disqualification and blacklisting of the applicant.
The central bank expressed hope that the program would bring promising young entrepreneurs into the formal banking system and contribute to employment generation and sustainable economic growth at the grassroots level.
