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Entrepreneurs with innovative ideas will get up to Tk 1 crore in loan from the Bangladesh Bank’s Tk 500 crore start-up refinance fund against personal guarantee and academic certificate.
A BB circular issued on Monday said that start-ups would get loans from the fund for the highest five years at the rate of 4 per cent interest.
Banks will get money from the BB at the rate of 0.5 per cent interest and the banks would be allowed to charge start-ups another 3.5 per cent.
Apart from the BB’s Tk 500 crore refinance fund, the central bank has also made it mandatory for all scheduled banks to form separate start-up funds with their own funds.
To form the start-up funds, the banks have been asked to set aside 1 per cent of their operating profits for the years from 2021 to 2025.
As a means of protecting the innovative ideas, the BB guidelines have also barred banks from disclosing or sharing the ideas or proposals which would be placed by the entrepreneurs.
Either personal guarantee or academic certificate would be treated as collateral.
The BB said that the banks, under agreement with the start-ups, would be allowed to take personal guarantee from individuals, not more than two, accepted to both the parities.
For both the general and vocational degree-holders, the start-up owners will have to submit their original certificates as guarantee.
The start-up firms would get up to one year grace period against their loans, said the BB guidelines, adding that the loans must be disbursed in at least three phases and cannot be disbursed at a single payment.
The disbursing of subsequent phases would depend on implementation of the preceding instalments.
None would be entitled to receive such loans from more than one bank or for several projects.
However, the banks are allowed to raise the initial limit upon physical inspection but the loan amount must be within Tk 1 crore.
If the central bank finds misuse of any portion of the refinance fund by any bank, the bank responsible will have to repay the same amount along with additional 2 per cent as penalty.
To give some relaxation to the banks, the central bank has kept the provisioning rate against irregular star-up loans to a lower level.
The provision rate has been set at 5 per cent against the sub-standard loans, 10 per cent against doubtful loans and 30 per cent against bad loans.
