Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has formed a re-financing fund of BDT 1.0 billion aiming to promote the country's new entrepreneurs in cottage, micro and small sector, officials said.

"The central bank has formed the fund to create employment opportunities through promoting the new entrepreneurs in cottage, micro and small sector across the country," a senior official of the Bangladesh Bank (BB) told BBN in Dhaka. “We expect that the new entrepreneurs in the sector will be benefited from the re-financing scheme.”

He also said different entrepreneurs and initiatives including women, information and communication technology (ICT), both export-oriented and import substitute, will be given priority for sanctioning such loan.

Under the scheme, the banks and non-banking financial institutions (NBFIs) are allowed to disburse the loan to the new entrepreneurs at maximum 10 percent interest.

The central bank will provide the fund to the commercial banks and the NBFIs at 5.0 per cent interest rate, according to a circular, issued by the BB on Thursday.
The circular also said new entrepreneurs will have to bear 20 per cent of the total project cost.

Interested commercial banks and NBFIs will have to sign a participatory agreement with the SME and Special Programmes Department of the BB, according to provisions.

Funding supports under the scheme will be available for working capital, mid-term and long-term investments. The tenure will be one year for working capital investment, three years for mid-term investment and five years for long-term investment.

BBN/SSR/AD-27June14-9:40 am (BST)