Bangladesh Bank to provide up to Tk 20 lakh without collateral; here is which young entrepreneurs are eligible.

Bangladesh Bank has launched a new financing program aimed at grooming the country's youth as entrepreneurs, fostering self-employment, and revitalizing the rural economy. The SME and Special Programmes Department of Bangladesh Bank issued the policy guidelines for this initiative—titled "Uddyog: Upazila-based Young Entrepreneur Search, Identification, and Financing Program"—on September 13.

Under this new program, selected young entrepreneurs will be eligible for financing of up to Tk 20 lakh without any collateral. The relevant policy guidelines have been circulated to the Managing Directors and Chief Executive Officers of all scheduled banks in the country.

According to the policy, applicants must be no older than 28 years of age as of the application deadline. They must also be citizens of Bangladesh and permanent residents of the respective Upazila. However, loan defaulters, individuals who have previously obtained business loans from any bank or financial institution, and employees of government, semi-government, or autonomous bodies are ineligible for this facility.

Various legitimate new or existing business ventures—including technical startups, agriculture, food processing, light engineering, renewable energy, and handicrafts—will be considered for this financing.

Financing under this program will follow a "blended finance" model. Funds of up to Tk 20 lakh will be provided based on the actual needs and projected costs of the entrepreneur's business. Of this amount, up to Tk 10 lakh will be provided as a bank loan, while the remaining Tk 10 lakh will be provided as a matching grant.

For instance, if an entrepreneur requires Tk 12 lakh for their business, they would receive Tk 6 lakh as a loan and Tk 6 lakh as a grant. Both portions of the funds will be deposited into their bank account simultaneously.

However, in the event of a loan repayment failure or misuse of funds, the grant portion will be converted into an interest-free loan. Subsequently, the funds will be recovered in accordance with prevailing laws.

Bangladesh Bank will designate a "Lead Bank" for each Upazila to select eligible entrepreneurs. Applicants can collect and submit application forms at any scheduled bank branch. The applications will then be forwarded to the relevant department of Bangladesh Bank through the Upazila and District-level Lead Banks.

The applicant's business plan, market potential, and capacity for job creation will be evaluated. A special panel comprising representatives from Bangladesh Bank, scheduled banks, successful entrepreneurs, the industrial sector, and academia will work on this initiative. Arrangements will be made to approve loans for the finally selected entrepreneurs within 17 working days.

In addition to providing financing, the participating banks will offer necessary support in areas such as financial literacy training, mentoring, market linkages, and assistance with trade licenses or business registration.