Financing agri sector projects under EEF to resume soon
FE Report | Thursday, 12 June 2008
The Bangladesh Bank (BB) plans to lift suspension of financing in the agriculture sector under the Equity Entrepreneurs Fund (EEF).
Extension of EEF facility to the agriculture sector has remained suspended since August 9, 2005, due to allegations of irregularities in sanctioning loans.
The central bank will also seek fresh fund for fiscal year 2008-09 from the government to continue the ongoing projects under the EEF, officials said.
The decision was taken at a review of the Technical Advisory Committee on EEF, held at the central bank Wednesday with BB Governor Salehuddin Ahmed in the chair.
"We are considering resumption of the financing in the agriculture sector under the EEF. But the process of sanctioning the facility will be more transparent to check irregularities," a BB senior official told the FE.
The central bank, however, decided to send a letter requesting the Ministry of Finance shortly to allocate fresh fund to continue the ongoing projects under the EEF.
"We need at least Tk 1.40 billion for the next fiscal year to continue the EEF operations," the BB official said, adding that the government has proposed in its budget to allocate Tk 1.0 billion to information technology (IT) under EEF for the fiscal 2008-09.
Meanwhile, the central bank has received at least 150 applications from interested entrepreneurs of the IT sector for equity fund assistance to set up software industries.
"We are expecting that short listing of the interested IT firms will be completed within a month," another BB official said, adding that the central bank will ask the short-listed firms to submit all relevant papers before sanctioning such loans.
In December last, the central bank sought such proposals from the IT entrepreneurs after the withdrawal of suspension of financing from the EEF after two years.
The central bank earlier asked the managing directors of all scheduled banks and non-banking financial institutions (NBFIs) to follow the latest instructions on sanctioning such loans to the IT entrepreneurs.
Under the existing provisions, the minimum amount of total project cost has been set Tk 5.0 million and the highest ceiling at Tk 50 million.
The central bank will provide 49 per cent of the fund through commercial banks and NBFIs while the entrepreneurs will invest 51 per cent equity of the total cost of the project.
Currently, the EEF is providing re-financing facilities to 223 projects in agriculture and 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.
Some pre-conditions to qualify for the fund have been relaxed in line with the recommendations made by trade promotion organisations.
The existing EEF has been split into two categories, namely Agriculture Equity Entrepreneurship Fund and IT Equity Entrepreneurship Fund and an amount of Tk 1.0 billion has been allocated for each fund in fiscal 2007-08.
Extension of EEF facility to the agriculture sector has remained suspended since August 9, 2005, due to allegations of irregularities in sanctioning loans.
The central bank will also seek fresh fund for fiscal year 2008-09 from the government to continue the ongoing projects under the EEF, officials said.
The decision was taken at a review of the Technical Advisory Committee on EEF, held at the central bank Wednesday with BB Governor Salehuddin Ahmed in the chair.
"We are considering resumption of the financing in the agriculture sector under the EEF. But the process of sanctioning the facility will be more transparent to check irregularities," a BB senior official told the FE.
The central bank, however, decided to send a letter requesting the Ministry of Finance shortly to allocate fresh fund to continue the ongoing projects under the EEF.
"We need at least Tk 1.40 billion for the next fiscal year to continue the EEF operations," the BB official said, adding that the government has proposed in its budget to allocate Tk 1.0 billion to information technology (IT) under EEF for the fiscal 2008-09.
Meanwhile, the central bank has received at least 150 applications from interested entrepreneurs of the IT sector for equity fund assistance to set up software industries.
"We are expecting that short listing of the interested IT firms will be completed within a month," another BB official said, adding that the central bank will ask the short-listed firms to submit all relevant papers before sanctioning such loans.
In December last, the central bank sought such proposals from the IT entrepreneurs after the withdrawal of suspension of financing from the EEF after two years.
The central bank earlier asked the managing directors of all scheduled banks and non-banking financial institutions (NBFIs) to follow the latest instructions on sanctioning such loans to the IT entrepreneurs.
Under the existing provisions, the minimum amount of total project cost has been set Tk 5.0 million and the highest ceiling at Tk 50 million.
The central bank will provide 49 per cent of the fund through commercial banks and NBFIs while the entrepreneurs will invest 51 per cent equity of the total cost of the project.
Currently, the EEF is providing re-financing facilities to 223 projects in agriculture and 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.
Some pre-conditions to qualify for the fund have been relaxed in line with the recommendations made by trade promotion organisations.
The existing EEF has been split into two categories, namely Agriculture Equity Entrepreneurship Fund and IT Equity Entrepreneurship Fund and an amount of Tk 1.0 billion has been allocated for each fund in fiscal 2007-08.