Venture Capital and Private Equity Association of Bangladesh (VCPEAB) has demanded collateral-free loan at 2. 0 per cent interest for VCPEAB members and their portfolio companies to help them meet their working capital requirement.
The association, in a meeting recently raised six proposals, making a plea to the government to consider these on urgent basis to stave off the losses due to the coronavirus pandemic.
The proposals include contributing a portion of employees' salary of the startups from government grant for next 6 months (April-September), providing the office rent from government grant for next 6 months for the startups who are currently experiencing huge financial losses, allowing local startups in the facilitation of content creation, allowing startups in government works and tenders so that startups' business can stay operational and their local market can be expanded and providing fund from the iDEA project of Startup Bangladesh to the fund of Alternate Investment Fund companies.
"During this crisis time, since government is making numerous digital contents such as online classroom, digital education, health and entertainment related online content etc., local startups should be hired in the facilitation of the content creation," a source of the association said.
"Due to COVID-19 pandemic, the startup businesses in the country are on the verge of collapse. Nearly 300 startups are in serious trouble over the anticipation of more than BDT 4.50 billion losses as selling of products and services is at halt in the local market," the source added.
Almost 0.15 million people are directly employed in these startups whose jobs are at risk. Moreover, about 0.7 million service providers who are associated with these startups are currently unable to provide their services. Many startups have export-oriented income which has drastically dipped by at least 80 per cent recently.
"The vision of Digital Bangladesh given by our Honorable Prime Minister in 2008 and the plan to achieve this vision set forth by the Prime Minister's ICT Advisor inspired thousands of young entrepreneurs to become a part of achieving this goal with their limited capital, parents' pension and last savings, and the aid of investment money from angel investors and venture capitalists," said Shameem Ahsan, Chairman of VCPEAB.
He said these entrepreneurs have dedicated themselves to establish many innovative startups in the country in the past 12 years. However, the COVID-19 pandemic is battering the startup and venture capital ecosystem that we have built over the years and without government's incentive and immediate action, it will collapse resulting in all the hard work of the entrepreneurs going in vain.
"Implementation of these proposals will ensure continuous revenue and cash flow for the startups and their ventures can be saved from the serious blow due to the ongoing crisis. When the situation achieves stability, venture capital and private equity firms will be able to raise fund from local and foreign investors to support the startups with financing or re-financing to keep their businesses running," said Shawkat Hossain, General Secretary of the association.
© 2024 - All Rights with The Financial Express
