BB launches 'Udyog' to spur youth entrepreneurship with up to Tk20 lakh blended financing

In a major push to foster self-employment and drive grassroots economic growth, Bangladesh Bank today (13 September) issued a comprehensive guideline titled "Udyog: Upazila-Driven Youth Opportunity for Growth".

The program aims to hunt, identify, and finance prospective young entrepreneurs across all upazilas in Bangladesh.

Issued by the SME and Special Programmes Department, the circular directs Managing Directors and Chief Executive Officers of all scheduled banks to immediately implement the scheme.

The policy covers a wide array of legal ventures–including tech startups, agriculture, food processing, light engineering, renewable energy, and handicrafts–prioritising both new innovative ideas and existing business models.

To ensure funding reaches genuine and capable young creators, Bangladesh Bank established specific eligibility guidelines:

Age Limit: Applicants must be adult Bangladeshi citizens aged up to 28 years on the final date of application submission.

Local Residency: Candidates must be permanent residents of the respective upazila.

Clean Credit History: Applicants must not be loan defaulters. Any default status revealed during Credit Information Bureau (CIB) checks will result in immediate cancellation.

Furthermore, anyone who has previously taken a business loan from any bank or financial institution is ineligible.

Employment Status: Public, semi-government, and autonomous institution employees are excluded from applying.

No Collateral Required: To alleviate barriers for youth, loans under this program can be disbursed without collateral support.

The framework offers a maximum blended financing package of up to Tk20 lakh per selected entrepreneur, evaluated strictly against business requirements and proposed cost plans, according to the circular.

The funding is split equally: 50 percent bank loan (Up to Tk10 lakh) and 50 percent matching grant (Up to Tk10 lakh)

If a business needs Tk12 lakh, for example, the applicant receives Tk6 lakh as a bank loan and Tk6 lakh as a grant.

The grant and loan portions will be disbursed simultaneously into the recipient's bank account.

However, failure to repay the loan or misuse of funds will automatically convert the grant portion into an interest-free debt, recoverable under standard recovery laws.

Bangladesh Bank will nominate one Lead Bank for each upazila to execute and coordinate the program.

Any branch of scheduled banks will collect application forms. On the working day following the application deadline, branches will forward all applications to the respective Upazila Lead Bank, which will then channel them to the District Lead Bank and eventually to Bangladesh Bank's departmental offices.

A multi-stakeholder panel comprising central bank officials, scheduled bank representatives, successful entrepreneurs, industry leaders, and academics will evaluate business plans, market feasibility, and employment potential to make final selections.

Designated banks must sanction loans within 15 working days of final selection, adhering to their internal credit rules and central bank regulations.

All participating banks will also provide financial literacy training, mentoring, market linkage support, and assistance with business registrations to ensure long-term sustainability for the newly minted enterprises.