Funds constraints have been hampering the operational activities as well as effectiveness of the Equity and Entrepreneurship Fund (EEF) for agro-processing sectors, officials said.
They said, "The EEF agro-fund has dwindled while the information technology (IT) fund has a significant volume of surplus. So, we are slow in providing funds to the farm sector projects pending with us due to dearth of resources."
"The authorities concerned should provide necessary funds to EEF especially for agro-processing and agro- based sectors for better implementation of projects in future, they added.
The ICB sanctioned over Tk 27.40 billion against 1,501 agro-related projects under the EEF till October, 2014. An amount of Tk 9.96 billion was disbursed under EEF, according to the latest data.
Currently, an amount of Tk 17.43 billion is urgently needed for the approved agro-based projects. The EEF agro-fund is now left with only Tk 3.16 billion contributed by Bangladesh Bank (BB) and Investment Corporation of Bangladesh (ICB), according to the BB data.
Under such circumstances, "It would be better if the sector gets an amount of Tk 3.00 billion from the government. The authorities concerned should take initiatives to release the fund immediately for the agro-processing sectors for proper project implementation," a BB official concerned told the Financial Express (FE).
The EEF unit of the BB sent a letter to Dr. M Aslam Alam, Secretary, Bank and Financial Institutions Division (BFID) of the ministry of finance (MoF) Tuesday last seeking Tk 3.0 billion for the agro-based projects.
The letter said a sum of Tk 9.96 billion out of Tk 27.40 has been released until October last. Moreover, Tk 17.43 billion is urgently needed for the approved agro-based projects. Presently, the EEF agro-fund is now left with only Tk 3.16 billion contributions of the BB and ICB.
A sum of Tk 3.0 billion has been earmarked in the budget of the current fiscal year (FY) 2014-15 for the agro-based projects.
The government's financial support to the EEF traditionally has not been sufficient. The amount should be increased according to demand, sources concerned said.
On the other hand, the BB has planned to double the government's equity support for ICT related projects under the initiative of EEF to boost the promising sector of the country.
The government introduced the EEF in the fiscal year (FY) 2000-01 to help promote entrepreneurship and create employment opportunities in the risky, yet promising, areas of agro-based industry (excluding the conventional sub-sectors such as rice mills, flour mills, fishing trawlers, and cold storage etc), and information technology (IT).
The decade-old fund was earlier managed by Bangladesh Bank (BB). In June 2009, the central bank transferred its management to the state-owned ICB. The ICB Capital Management Ltd. acts as project appraisal arm for EEF.
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