Abu Hena Mohd. Razee Hassan, chairman of the Executive Committee of BIBM and Deputy Governor of Bangladesh Bank, speaks at a research workshop on venture financing in Bangladesh organised by BIBM in Dhaka on Thursday. Speakers at a workshop stressed Thursday the need of prudential guidelines for venture capital to attract investment and expand its market.
They said venture capital was the only way of getting fund for hundreds of new and innovative business ideas, which do not have the capacity to provide collateral against credit.
The speakers also said that though there are rules for venture capital, this is still in its infancy in Bangladesh due to the lack of coordinated efforts.
The views came at the workshop on 'Venture Capital Financing in Bangladesh: An Exploration' at the Bangladesh Institute of Bank Management (BIBM)
Speaking as the chief guest, Bangladesh Bank Deputy Governor Abu Hena Mohd. Razee Hassan said that regulations of venture capital are yet to get a full shape.
He said there was a demand for some amendments to the regulations, particularly concerning the financial aspects.
He said that venture capital fund investment inherently carries a high degree of risk as it provides unsecured capital to young, private companies with the potential for rapid growth.
"But venture capital is long-term or "patient capital" that allows companies the time to mature into profitable organisations," he said.
Speaking at the programme, BSEC Commissioner Swapan Kumar Bala said it was not possible to formulate a uniform set of guidelines for venture capital and venture capital fund.
These are the two different types of fund for different investment purposes.
He said regulatory focus should be on facilitating platform for venture capital firms so that they can create large companies.
He also said entrepreneurs have fear about venture capital. A lot of discussions and awareness programmes can remove the fear.
BIBM Supernumerary Professor Helal Ahmed Chowdhury said venture capital must be monitored but it should not be too rigorous.
BIBM Supernumerary Professor Muhammad Yasin Ali said there was a close connection with venture capital fund and timing.
He said the country's banks could make a separate fund for the purpose of using as venture capital.
"Had there not been venture capital fund, innovative initiatives like bKash would not be in the market," he said.
He also proposed to form a forum where new ideas could be registered for the investment in venture capital.
Presenting the keynote paper at the workshop, BIBM Professor Dr. Shah Md. Ahsan Habib said there were good prospects of venture capital in Bangladesh. Proper guidelines could help realise the prospects.
Chairman of BD Venture Mohammad Ehsanul Haque, MD Shakhawat Hossain and MD of Maslin Capital Limited Wali-ul-Maroof Matin spoke at the function.
BIBM Director General Toufic Ahmed Choudhury delivered welcome speech.
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