An acute shortage of fund, particularly for the food processing and agro-based industry, has been impairing the operational effectiveness of Equity and Entrepreneurship Fund (EEF), officials said.
Currently, an amount of Tk 19.19 billion is urgently needed for the food processing and agro-based industry as the EEF agro-fund is now left with only Tk 2.09 billion for disbursement, they said.
"Funds for agro-processing and its different sectors under the EEF are insufficient while the ICT sector has got a surplus allocation. We have slowed down the fund flow to farm sector projects due to the scarcity of funds," a high official of the ICB (Investment Corporation of Bangladesh) which manages the fund told the FE, preferring anonymity.
"A good number of entrepreneurs seek funds for the agro-based projects, while the ICT fund cannot be disbursed in the absence of qualified and competent entrepreneurs," he said.
Besides, some applicants from the ICT sector did not receive their funds although those were sanctioned, he also said.
The ICB sanctioned over Tk 30.22 billion for 1,670 agro projects under the EEF until September last and about Tk 11.03 billion was released against 678 projects, according to the latest data.
The ICB sanctioned over Tk 1.53 billion in favour of 103 ICT projects. Of the amount, over Tk 860 million was disbursed against over 74 projects until January last.
"We are trying to increase participation of entrepreneurs from the ICT sector. The authority cut the experience period of an entity in a bid to increase the number of entrepreneurs receiving the ICT fund," a source concerned said.
"EEF unit of Bangladesh Bank (BB) sent a letter to Dr M Aslam Alam, Secretary of Bank and Financial Institutions Division (BFID) under the ministry of finance (MoF), last week seeking Tk 4.0 billion for agro-based projects which has been allocated in the current fiscal year's budget for the food processing and agro-based industry," a BB official told the FE on Friday.
"It would be better if the sector gets Tk 4.00 billion from the government. The authorities concerned should take initiatives to release the funds immediately for agro-processing sector for implementation of projects properly," he added.
On the other hand, the government did not release any fund against the agro-based food processing sector in the last fiscal although an allocation of Tk 3.0 billion was made for the sector.
The government introduced the EEF in the fiscal year (FY) 2000-01 to help promote entrepreneurship and create employment opportunities in areas of agro-based industries, excluding conventional sub-sectors such as rice mills, flour mills, fishing trawlers, and cold storage etc, and information technology (IT).
The fund had earlier been managed by the BB. In June 2009, the central bank handed over its management to the state-owned ICB. The ICB Capital Management Ltd acts as the project appraisal arm of the EEF.
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