Central bank transfers EEF operation to ICB
Tuesday, 2 June 2009
Siddique Islam
The central bank has revised the guideline on Equity Entrepreneurs Fund (EEF) reducing the minimum disbursement limit to Tk 2.0 million from the existing Tk 5.0 aiming to encourage entrepreneurs to set up agro-based industries.
"We've revised the guideline to provide equity support to more entrepreneurs for setting up agro-based industries across the country," Executive Director of the Bangladesh Bank (BB) Mofiz Uddin Chowdhury told the FE Monday after signing a deal with the Investment Corporation of Bangladesh (ICB).
Under the agreement, ICB, the country's lone state-owned asset management company, will operate the fund as sub-agent of the central bank.
"The entrepreneurs, particularly the small one, will be able to take advantage of such fund to establish agro-based industries after reducing the minimum limit of the fund," the BB executive said while explaining the key objective of the revision.
The central bank will provide 49 per cent fund through commercial banks and NBFIs while the entrepreneurs will invest 51 per cent of the total cost of the project, Mr. Chowdhury added.
"We'll release the fund to the entrepreneurs when they will invest their equity potion as per requirements," he said while explaining the mode of disbursement of the fund.
Under the existing provisions, the minimum amount of total project cost will be Tk 2.0 million and the maximum Tk 100 million for agro-based industries while the minimum amount of total project cost will be Tk 5.0 million and maximum Tk 50 million for information technology (IT) sector.
"We're now working to include more sectors under the EEF scheme," the BB executive said, adding that the central bank has, so far, provided re-financing facilities amounting to Tk 5.08 billion through the EEF to 251 projects in agro-based and IT sectors across the country.
Besides, the central bank is now allowing the companies, which are interested to expand their projects, to receive credit facilities from other commercial banks on a case to case basis.
"We've given approval to at least two companies for taking loans from other banks for expansion of their projects," Mr. Chowdhury said, adding that the central bank was also formulating a policy aiming to strengthen monitoring and supervision of the overall operations of EEF.
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 has, so far, sanctioned Tk 5.65 billion from the fund and disbursed Tk5.08 billion to 217 agro-based projects and 34 IT projects, according to the central bank statistics.
The ICB has received fund worth Tk 1.0 billion under the agreement signed with the central bank that has operated the government fund since December 2000 under an agreement with the government.
Mr. Chowdhury and ICB Managing Director Humayun Kabir signed the agreement at the central bank Monday on behalf of their organisations respectively. BB Governor Atiur Rahman and senior executives were present on the occasion.
"It's not our responsibility to operate such fund," senior Deputy Governor Nazrul Huda told reporters after the agreement signing ceremony, adding that the BB's job was to oversee the policy issues of the fund.
The ICB plans to boost the operation of the EEF scheme slashing procedural timeframe to disburse the fund to the qualified entrepreneurs for setting up their industries.
"We'll try to disburse the fund to the eligible qualified as early as possible," Managing Director of the ICB Humayun Kabir told the FE after the signing ceremony.
He also said the ICB will also seek more fund from the government after disbarment of the existing Tk 1.0 billion.
The central bank has revised the guideline on Equity Entrepreneurs Fund (EEF) reducing the minimum disbursement limit to Tk 2.0 million from the existing Tk 5.0 aiming to encourage entrepreneurs to set up agro-based industries.
"We've revised the guideline to provide equity support to more entrepreneurs for setting up agro-based industries across the country," Executive Director of the Bangladesh Bank (BB) Mofiz Uddin Chowdhury told the FE Monday after signing a deal with the Investment Corporation of Bangladesh (ICB).
Under the agreement, ICB, the country's lone state-owned asset management company, will operate the fund as sub-agent of the central bank.
"The entrepreneurs, particularly the small one, will be able to take advantage of such fund to establish agro-based industries after reducing the minimum limit of the fund," the BB executive said while explaining the key objective of the revision.
The central bank will provide 49 per cent fund through commercial banks and NBFIs while the entrepreneurs will invest 51 per cent of the total cost of the project, Mr. Chowdhury added.
"We'll release the fund to the entrepreneurs when they will invest their equity potion as per requirements," he said while explaining the mode of disbursement of the fund.
Under the existing provisions, the minimum amount of total project cost will be Tk 2.0 million and the maximum Tk 100 million for agro-based industries while the minimum amount of total project cost will be Tk 5.0 million and maximum Tk 50 million for information technology (IT) sector.
"We're now working to include more sectors under the EEF scheme," the BB executive said, adding that the central bank has, so far, provided re-financing facilities amounting to Tk 5.08 billion through the EEF to 251 projects in agro-based and IT sectors across the country.
Besides, the central bank is now allowing the companies, which are interested to expand their projects, to receive credit facilities from other commercial banks on a case to case basis.
"We've given approval to at least two companies for taking loans from other banks for expansion of their projects," Mr. Chowdhury said, adding that the central bank was also formulating a policy aiming to strengthen monitoring and supervision of the overall operations of EEF.
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 has, so far, sanctioned Tk 5.65 billion from the fund and disbursed Tk5.08 billion to 217 agro-based projects and 34 IT projects, according to the central bank statistics.
The ICB has received fund worth Tk 1.0 billion under the agreement signed with the central bank that has operated the government fund since December 2000 under an agreement with the government.
Mr. Chowdhury and ICB Managing Director Humayun Kabir signed the agreement at the central bank Monday on behalf of their organisations respectively. BB Governor Atiur Rahman and senior executives were present on the occasion.
"It's not our responsibility to operate such fund," senior Deputy Governor Nazrul Huda told reporters after the agreement signing ceremony, adding that the BB's job was to oversee the policy issues of the fund.
The ICB plans to boost the operation of the EEF scheme slashing procedural timeframe to disburse the fund to the qualified entrepreneurs for setting up their industries.
"We'll try to disburse the fund to the eligible qualified as early as possible," Managing Director of the ICB Humayun Kabir told the FE after the signing ceremony.
He also said the ICB will also seek more fund from the government after disbarment of the existing Tk 1.0 billion.