Bangladesh plans to launch a $2 billion Bangladesh-dedicated equity fund in Hong Kong as the government seeks to diversify financing, revive the capital market and reduce its reliance on domestic borrowing, Finance and Planning Minister Amir Khosru Mahmud Chowdhury said on Saturday.
“This is equity and not a loan,” Khosru said at a seminar on the economy and private-sector expectations organised by the Dhaka Chamber of Commerce and Industry (DCCI).
The fund is part of a broader push to bring international capital into Bangladesh while easing the government’s demand for funds from domestic banks and other traditional sources.
“With virtually no functioning capital market in Bangladesh for quite some time, we are trying to revive it as one of the alternative sources of financing,” Khosru said.
The government also plans to tap international debt markets through dollar bonds, panda bonds and samurai bonds, he said, giving Bangladesh more channels to raise foreign currency beyond conventional borrowing.
Khosru said the government has already reduced bank borrowing to some extent, but shifting towards alternative financing would take time. The aim is to free up financing for private businesses rather than have the government compete with them for bank credit.
The capital market is central to that strategy. Khosru said reforms at the Bangladesh Securities and Exchange Commission, including the appointment of a chairman and four commissioners through a transparent selection process, have begun to restore investor confidence.
“I won’t say that the capital market has recovered completely, but confidence is coming back. The market is gaining ground and moving upward,” he said.
But the government needs more than rising share prices. Companies must also trust the market enough to raise capital through listings.
“Good companies will come for listing only when they have confidence in the market,” Khosru said.
He described the previous market as having become “like a casino”, where ordinary investors could lose while a section of market participants benefited. The government is now trying to replace that culture with greater transparency, professionalism and institutional governance.
The reforms are also drawing interest from international fund managers, Khosru said.
“We are seeing global fund managers coming forward. That is very good,” he said.
The financing push extends to taxation. Khosru said the government does not want to increase the burden on existing taxpayers but instead broaden the tax base.
“When we talk about increasing taxes, we are not talking about increasing taxes on those who are already paying. We are trying to expand the network,” he said.
He also stressed automation in tax administration, saying reduced physical contact between taxpayers and tax officials would improve transparency and curb opportunities for corruption.
