The Bangladesh Bank (BB) has invited fresh project proposals from innovative, experienced and new information technology (IT) entrepreneurs for ‘equity fund assistance’ to set up software industries.

Such proposals from the IT entrepreneurs have been sought by the central bank after the withdrawal of suspension of financing from the Equity Entrepreneurs Fund (EEF) over two years back.

Sanction and disbursement of the EEF of the central bank remained suspended since August 9, 2005 due to alleged irregularities while sanctioning of loans.

“The fresh sanction of loans for agro-based industries is still suspended. But the authorities concerned has already invited fresh project proposals only for IT entrepreneurs,” a BB senior official told the FE Monday.

He also said the central bank has planned to disburse Tk 1.0 billion to the new IT entrepreneurs during the current fiscal in line with the announcement made in the national budget for fiscal 2007-08.

The central bank has already issued a circular in this connection and asked the managing directors of all scheduled banks and non-banking financial institutions (NBFIs) to follow the latest instructions to sanction such loans to the IT entrepreneurs.

Under the new provisions, the minimum amount of total project cost will be Tk 5.0 million and the ceiling, Tk 50 million.

The central bank will provide 49 per cent 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 the 223 projects in agro-based 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.

The central bank earlier relaxed some conditions of the fund in line with the recommendations made by trade promotion organisations to facilitate entrepreneurs for establishing their industrial units.

The existing EEF has been split into two categories of funds, namely, Agriculture Equity Entrepreneurship Fund and IT Equity Entrepreneurship Fund and an amount of Tk 1.0 billion for each fund has been allocated for fiscal 2007-08.

Apart from the proposed Agriculture Equity Entrepreneurship Fund, credit support to the tune of Tk 1.50 billion has been proposed for development of agro-based industries.

The proposed credit will be channeled through Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, BASIC Bank and Karma Sangsthan Bank, according to the budget document.