Bangladesh Bank is establishing a venture capital company to facilitate equity investments in startups, with scheduled banks investing their startup funds into this new entity, supported by a Tk 500 crore refinance window accessible to banks and non-bank financial institutions.

The government has increased the maximum loan limit for startups from Tk 2 crore to Tk 8 crore, categorized by operational stage, to simplify access to finance.

To qualify for startup loans, entrepreneurs must be at least 21 years old, with no upper age limit, and existing businesses registered for no more than 12 years are eligible, provided they are free of loan default records and recognized by accredited programs.

Startups by large industrial groups are excluded, but the definition now includes a broader range of ventures, with eligibility criteria emphasizing age, registration period, and credit history.

Interest rates for startup loans are capped at 4% per annum with quarterly compounding, and banks are exempt from the Internal Credit Risk Rating System (ICRRS) guidelines until June 30, 2030, along with a reduction in the required general provision from 1.0% to 0.5%.

Assessment guidelines for startup loans have been relaxed, including exemption from ICRRS and a lowered provision requirement, to encourage lending to startups.

A new startup loan scheme has been announced, allowing Bangladeshi citizens aged 21 and above to apply for loans with a minimum interest rate of 4 percent, including existing startups not older than 12 years.

Eligible startups for funding must be registered in Bangladesh, not older than 12 years, and should demonstrate innovation, scalability, and market disruption potential.

Banks are restricted from disbursing new loans or investments from their 'Startup Fund' during a transition period, although existing disbursements can continue.

Further details on the venture capital company's formation and operation will be provided in a future circular.

The policy includes borrower-friendly provisions such as a 0.50% general provision against unclassified startup loans to incentivize lending.

Banks are required to maintain a 0.50% general provision against unclassified startup loans from their own funds, easing capital requirements.