Bangladesh Bank (BB) has set the eligibility and repayment rules for its UDYOG programme for young entrepreneurs, limiting access to applicants aged 28 or below who have not previously taken bank loans to run a business.
Under the guidelines issued on Sunday, applicants must also be permanent residents of the upazila from which they apply, while loan defaulters and employees of government, semi-government and autonomous institutions will be excluded from the programme.
The guidelines also spell out a key condition attached to the grant component of the scheme: an entrepreneur must fully repay the loan to retain the grant.
Under the previously announced programme, a selected entrepreneur can receive up to Tk20 lakh – up to Tk10 lakh as a loan and an equal amount as a one-off grant. Both will be disbursed at the same time.
If the entrepreneur fails to repay the loan, however, the entire amount disbursed as a grant will be converted into a loan. This means the grant effectively becomes non-repayable only after the original loan has been repaid in full.
The central bank also laid out how applicants will be screened and selected. Applications will be available at bank branches and on banks’ websites. All banks operating at the upazila level will accept applications, while one designated bank will act as the lead bank.
The lead bank at the district level will scrutinise the applications. Banks will also arrange necessary advice and training for entrepreneurs selected for financing.
Applicants must have their own business venture or business idea, or a realistic plan to establish a new business. They will have to submit a proposal explaining how the business will operate and why financing is required.
The programme is designed for new entrepreneurs. Anyone who has previously borrowed from a bank or financial institution to operate a business will not be eligible.
Banks will also check applicants’ credit records through the Credit Information Bureau (CIB). Anyone identified as a loan defaulter will be disqualified.
The scheme will cover agriculture, food processing, handicrafts, fisheries, livestock, tourism, services, solar and other renewable energy, light engineering, technology-based start-ups and other lawful businesses. Activities prohibited by law will not qualify.
Bangladesh Bank has also introduced safeguards against fraudulent applications. Anyone found to have provided false information or used another person’s business idea as their own may have the application cancelled at any stage and be blacklisted from the programme.
