Equity & Entrepreneurship Fund of Bangladesh Bank

1. Type of Sectors: Agro-based Industries or IT-based Enterprise
2. Type of Facility: Term Loan
3. Project Cost: BDT from Min 0.50 Crore to Max 12 Crore (For IT 5 Crore (Max)
4. Equity and Debt Ratio: 51% : 49%
5. Formation of the Company: RJSC&F registered company
6. Nationality: Any Bangladeshi (NRB Entrepreneur will be prioritized)
7. Entrepreneur's Financial Capability: Assets as in IT 10B of tax return
8. Loan Profile:
   1. Interest of Loan: 2% (on Term Loan)
   2. Tenure of Loan: 8 Years
   3. Moratorium/Grace Period: 4 Years
   4. Repayment schedule: Within the next 4 (four) years by 8 (eight) six-monthly equal installments.
9. Other Consideration: Defaulter and loan availing company are not allowed

The figures above are subject to revisions in Bangladesh Bank's latest circular changes from time to time.

Eligibility for the Equity Support Fund

1. The project will have to be a new one and belong to either of the sectors viz., software industry or food processing and agro-based industry.
2. The sponsors/entrepreneurs applying for EEF support will have to be a private limited company registered under the Companies Act, 1994 and established old companies can also apply 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 new company.
3. The total project cost ( including net working capital ) of the proposed project will have to be of minimum 0.50 (half) core for both IT and agro-based industries and that of the maximumis Taka 5.00 Crore for IT& Taka 12.00 Crore for agro-based industries. Project proposal with 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 environment friendly. 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/FI and 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

Process flow of the ESF:

The fund can be availed by an investor as per the following process flow subject to compliance of existing policy at each stage:

1. Submission of Expression of Interest (EOI) | Expression of Interest (EOI) Form |
   1. Food processing and Agro-based Industry: Fill up EOI form online ? Submit a nonrefundable pay order/bank draft of Tk 2000.00 directly/by post/by courier to the address of EEF Unit, Bangladesh Bank with a print copy of EOI.
   2. ICT Based Industry: Collect EOI from ICB against a nonrefundable Pay order/Bank Draft of Tk.2000.00 ? Submit duly filled EOI directly/by post/by courier to ICB.
2. Accumulation of EOIs in ICB: Sending EOIs of food processing and agro-based industries filed with Bangladesh Bank to ICB
3. Presentation of applications to Project Appraisal Committee (PAC) by ICB.
4. Interviewing and short listing entrepreneurs.
5. Submission of Project Appraisal Report to ICB by the shortlisted entrepreneurs through any of the appraising Bank/FI.
6. Submission of Appraisal Reports to the concerned PAC to ascertain the technical and financial feasibility of the proposed project.
7. Instructions sent to appraising Bank/FI to submit final assessment report for feasible projects.
8. Registration of the feasible project under RJSC as Private Limited Company by the entrepreneurs of Food processing and Agro-based Industry. ICT based companies are eligible to apply for ESF loan having completed at least one year period since registration at RJSC as a private limited company.
9. Submission of final Assessment Report to ICB by appraising Bank/FI.
10. Presentation of final assessment reports before PAC to have recommendation for approval.
11. Submission of recommended project proposals to Sanction Board for final approval.
12. Issuance of sanction letter. (ESF loan sanction process flow chart.)
13. Documentation:
    1. Mortgaging required collateral by the entrepreneur in favor of ICB.
    2. Charge creation at RJSC in favor of ICB
    3. All other documentation requirements according to the sanction letter.
14. Verification of entrepreneur's investment (51% of the project cost) through joint inspection of ICB, appraising institution and BB.
15. Disbursement of ESF loan (49% of project cost) in 3-4 installments confirming entrepreneur's adequate investment.
16. Issuance of loan repayment schedule after full disbursement.