Equity & Entrepreneurship Fund of Bangladesh Bank

Equity and Entrepreneurship Fund (EEF) was introduced in the fiscal year 2000-2001 to encouragethe investors to invest in the risky but otherwise promising two sectors, viz. software industry andfood processing and agro-based industry. Bangladesh bank is authorized by the Government tomanage the EEF. This fund was started to increase investments in two promising industrial sectorsviz. Software industry and Food processing and agro-based industry (excluding the conventional sub-sectors such as rice mills/flour mills/fishing trawlers, cold storage of potato etc.) and also toencourage entrepreneurs in these sectors.

"Eligibility for equity support from the EEF:

1. The project will have to be a new one and belong to either of the sectors viz., softwareindustry or food processing and agro-based industry.
2. The sponsors/entrepreneurs applying for EEF support will have to be a private limitedcompany registered under the Companies Act, 1994 and established old companies can alsoapply for EEF support by setting-up a subsidiary new private limited company. But in case of a software company registered on or after 01 January, 1997 will be treated as a newcompany.
3. The total project cost ( including net working capital ) of the proposed project will have to beof minimum 0.50 (half) core for both IT and agro-based industries and that of the maximumis Taka 5.00 Crore for IT& Taka 10.00 Crore for agro –based industries . Project proposalwith bank loan is not allowed for agro –based industries but allowed for IT industries.
4. The project shall have to be viable technically & financially .It should be environmentfriendly. Importance shall be given on the appraisal of the entrepreneurship such aseducational qualification in the relevant discipline, knowledge in the technology/ processoperating such project, track records in financial conduct specially with Banks/FI. In case of ratio analysis the project has to offer minimum IRR (Internal Rate of Return) of 15%, Returnon equity (ROE) of 15% Debt service coverage Ratio 1.50:1 Current ratio 1.50:1 and Fixedasset coverage ratio 1.50: 1 and SWOT analysis should have to be acceptable.
5. The non-resident Bangladeshis will be given preference subject to the fulfillment of the terms& conditions mentioned in the above paragraphs.
6. Any defaulter (as defined by Bangladesh Bank) cannot apply for EEF.
7. Where a sponsor of a project needs term-loan and /or working capital loan from any Bank/FIand also equity support form the EEF, he has to submit application to the Bank/FI concerned.The Bank/FI will have to be satisfied that the project has fulfilled all the terms and conditionsrequired. Where the sponsors/entrepreneurs need only equity support from EEF without any bank loan a Bank/FI will be nominated as representative of EEF for appraisal of the project by Bangladesh Bank (EEF). To nominate such Bank/FI, previous business relationship of entrepreneur with the Bank/FI will be considered. The concerned Bank (which will also actas monitoring bank) will make thorough appraisal of the project in accordance with EEF