2,500 apply for agro-based loan facility under EEF

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Siddique Islam
Around 2,500 applications have been submitted to the central bank seeking equity assistance under Equity Entrepreneurs Fund (EEF) to set up agro-based industries across the country.
The Investment Corporation of Bangladesh (ICB), the country's lone state-owned asset management company, will sanction funds to the qualified entrepreneurs as sub-agent of the central bank, officials said.
"We're going to sign a deal with the ICB shortly to hand over the operation of EEF in line with the government decision," an executive officer of the Bangladesh Bank (BB) told the FE Monday.
He also said the finance ministry has already given approval in this connection.
Under the agreement, the ICB will disburse funds to the qualified entrepreneurs though commercial banks or non-banking financial institutions (NBFIs) in line with the existing rules and regulations.
The central bank earlier invited fresh project proposals from innovative, experienced and new entrepreneurs for 'equity fund assistance' to establish agro-based industries.
Such proposals from the agriculture entrepreneurs have been sought by the central bank after the financing from the EEF was suspended nearly four years back.
Sanction and disbursement of the EEF of the central bank remained suspended since August 9, 2005 due to alleged irregularities while sanctioning of loans.
"We've received the applications until April 26 this year, the last date of submission of application for the fund, and the number of applications received indicated a tremendous response from entrepreneurs, especially in the agro-based sector," another BB official told the FE.
A five-member high-powered committee will prepare a short-list among the applicants after scrutinising the applications, he added.
"The Technical Advisory Committee on EEF will give final approval to sanction funds to the qualified entrepreneurs to set up agro-industries," the BB official noted.
The central bank has already issued a circular in this connection and asked the managing directors of all commercial banks and NBFIs to follow the latest instructions to sanction such loans to the agro-based industries.
Under the new provisions, the minimum amount of total project cost will be Tk 5.0 million and the maximum Tk 100 million.
The central bank will provide 49 per cent fund through commercial banks and NBFIs while the entrepreneurs will invest 51 per cent equity of the total cost of the project.
"We'll release the fund to the entrepreneurs when they will invest their equity potion as per requirements," the BB official said while explaining the mode of disbursement of the fund.
Currently, the EEF is providing re-financing facilities to the 288 projects in agro-based and information technology (IT) sectors across the country.
The EEF was launched in 1999 by the central bank with an initial allocation of Tk 1.0 billion aiming to promote the agro-based industries and IT sectors.
The central bank earlier relaxed some conditions of the fund in line with the recommendations made by trade bodies to facilitate entrepreneurs for establishing their industrial units.
The existing EEF has been split into two categories of funds, namely, Agriculture Equity Entrepreneurship Fund and IT Equity Entrepreneurship Fund.
The central bank is still administering the fund since inception. "So far, the government out of total national budgetary allocation of Tk 15 billion has released Tk 5.2 billion," the Bangladesh Bank said in its annual report for 2007-08.