BB raises startup fund limit, drops upper age barrier
Loan limits now range from Tk2cr to Tk8cr, a significant increase from the previous ceiling of Tk1cr

Highlights
- Startup loans available from age 21
- Interest rate set at only 4%, payable quarterly
- Loan limits raised from previous Tk1 crore to Tk 2–8 crore, based on startup stage
- Businesses up to 12 years old can apply
- Tk500 crore 'Startup Fund' created for refinancing
- Equity investment now allowed via a planned venture capital company
Bangladeshi citizens aged 21 or older will now be eligible to receive startup loans from commercial banks, with borrowers paying only 4% interest. Previously, people aged from 21 to 45 could apply for the fund.
The loan ceiling has also been increased to Tk8 crore, a significant raise from the previous ceiling of Tk1 crore.
Banks and financial institutions can receive refinancing from the Bangladesh Bank's Tk500 crore "Startup Fund" against loans or investments disbursed in favour of startup entrepreneurs.
Existing entities engaged in startup ventures will also be eligible for financing, provided their registration does not exceed 12 years.
A master circular issued today (9 July) by Bangladesh Bank outlines these policies, including several revisions to the existing startup loan framework.
To provide refinancing and equity support to startups, ventures have been classified into several stages based on their operational age. Depending on the stage, loan limits now range from Tk2 crore to Tk8 crore.
For clients, the maximum interest/profit rate for both term and working capital loans/investments has been capped at 4%, applied on a quarterly basis.
The central bank stated that both financing methods and limits for startups have undergone major revisions. Previously, banks could only provide loans/investments from their startup funds. Under the new circular, they may also offer equity support to startups.
"Each scheduled bank will offer only equity investment from its own 'Startup Fund'," the circular reads. "To facilitate equity financing in startup companies, Bangladesh Bank will initiate the formation of a venture capital company. Banks will invest the entirety of their Startup Fund in this venture as equity, which will be recorded in their financial statements as equity investment.
"The SME and Special Programmes Department of Bangladesh Bank will carry out the necessary administrative procedures. Detailed guidelines on the structure and operation of the venture capital company will be issued separately."
The circular further states that banks must use their own loan/investable funds to provide loans/investments to startup entrepreneurs. Financial institutions may also use their own funds.
However, from the issuance of this circular onwards, banks may no longer disburse new loans/investments to startups from their internal Startup Funds. Disbursement may only continue for loans/investments already approved.
Bangladesh Bank notes that in the current economic context, startup companies are playing a vital role in fostering growth, employment, and innovation. These ventures are building innovative business infrastructure, attracting global investment, and creating new job opportunities, aligned with the Sustainable Development Goals. The master circular aims to update and adapt startup financing guidelines to better support this promising sector.