Startup means that type of business that is mainly technology-based and is targeted for extensive markets and customers. The startup is a project, motive, or company which is conducted with an economic model. In a startup, entrepreneurs have confronted many uncertainty, undecidedness, and failure. Government support can make them enthusiastic.
▪ Government initiatives
Bangladesh’s government takes various steps to encourage entrepreneurs and their undertaken startups. To implement a new idea or inaugurate a new business, managing funds is essential. So, the government has opened different types of funds for entrepreneurs to create favor in managing funds. Government explores different types of business solutions by arranging projects or competition for entrepreneurs. In this regard, entrepreneurs get the opportunity to express their thoughts, and if their idea seems applicable, the government provides funds to implement them. Different ministries organize these initiatives at different times.
▪ Types of Allocated funds
Government allocates different types of loans and encourages the private sector to enhance availability to get funding for entrepreneurs. An entrepreneur should select a bank loan according to his/her business form. To get money an entrepreneur has different options such as1) Equity and Entrepreneurship Fund, Bangladesh Bank.
2) IDLC Innovation Loan (5 lakh – 1 crore)
3) Mutual Trust Bank (50 lakh for 5 years)
4) IDLC startup loan (25 lakh – 5 year)
5) Employment Bank- Leasing free loan (2 lakh)
6) Women entrepreneurs loan
▪ Criteria for providing funds
Loans are provided on some eligibility rely on –
1) Creative Idea
2) Enthusiasm of entrepreneurs
3) Skills and experience
4) Location
5) Types of workers
6) Product quality
7) Social benefits
An entrepreneur has to fill-up an intent letter and provides work details on a business idea to get the loan. Their initiatives are justified by the authority before providing loans.
▪ Collection process
The collection process of Bank and Financial institutions will vary on their own policy and the amount of money lending. To accessibility, an entrepreneur can take a loan by
1) Crowd funding
2) Venture capital
3) Angel investors (bdangels.com)
4) Business Incubator
They are providing loans to entrepreneurs where an entrepreneur gets a loan easily by following less formality and time than Banking.
▪ Interest rate
Interest rate is an essential part of the decision-making of entrepreneurs in taking loans. Sometimes high rated loans make entrepreneurs reluctant to receive loans. So, creating a balance on an interest rate of providing a loan is mandatory.
In the new monetary policy, the interest reflection target is considered as 6.1 percent. The government has published a new proposal where it is called that the highest rate of return on the private sector will be bound at 14.80%. The Central Bank tries to continue a 5% Interest rate for lending entrepreneurs.
▪ Proper utilization
After taking the loan, whether entrepreneurs follow their commitment or not will be monitored. To help entrepreneurs, the government grants tax-free or low tax rates for startups in the inaugurating years.
▪ Prospect of the Startup Business
In Bangladesh, the return rate on SME is 90 percent and this rate is more than the returning rate of other sectors. So this sector should be also prioritized. Entrepreneurs are great human resources in the country. Unemployment is growing up day by day. Only entrepreneurs can tackle these situations through their endeavors and determination.
