BIDA\'s maiden move to create Tk 1.1b venture capital fund

Rezaul Karim | Published: October 19, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

The Bangladesh Investment Development Authority (BIDA) has for the first time taken a move to create a venture capital fund worth Tk1.10 billion for promoting new entrepreneurs who usually do not get access to formal funding, officials said.
The new body formed by merging the Board of Investment (BoI) and the Privatisation Commission to liven up the country's stagnant investment scenario started its journey on September 01 this year.
Of the total amount, the agency has already sanctioned Tk100 million and has asked the Ministry of Finance (MoF) to allocate the rest Tk1.0 billion for the funding.
The BIDA will spend the fund for the new entrepreneurs as it believes the country lacks adequate number of entrepreneurs to give a further boost to its economy.
Under the concept, the entrepreneurs can take fund from the venture capital firms and they will give stake proportionately to the funding entity.
The venture capital firms will hold directorship until the firms buy the shares negotiated during the funding.
This type of fund does not require any mortgage and collateral but business potential is more important to get such funds.
"The initiative to form a venture capital fund is now in initial stage. Activities of the fund will start once the board gives approval in this regard," Tauhidur Rahman Khan, director of BIDA, told the FE at his office on Monday.
"It will be run as a project. We will seek exemption from registration fees from the Registrar of Joint stock Companies and Firms (RJSCF) and Bangladesh Securities and Exchange Commission (BSEC)," he said.
A board meeting will be held in November this year with venture capital on its 10-point agenda, he mentioned.
Under the venture, BIDA will put emphasis on developing new entrepreneurs in the county's private sector.
Besides, it will run in upzila and district levels, a high official of the newly-established state entity said. Â
"We have a plan to create 0.3 million entrepreneurs next year in the country. We have sent letters to the chambers to participate in the new entrepreneur development programmes," he added. Â
A proposal on the venture capital has already been sent to the Prime Minister's Office (PMO), he also said.
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