Equity- Entrepreneurship Fund (EEF)
Posted by Ripon Abu Hasnat on Monday, August 25, 2014 | 0 comments
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Equity-Entrepreneurship Fund (EEF) was introduced in the fiscal year 2000-2001 to encourage the investors to invest in the risky but otherwise promising two sectors, viz. software industry and food processing and agro-based industry. Bangladesh bank is authorized by the Government to manage the EEF. This fund was started to increase investments in two promising industrial sectors viz. 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 to encourage 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., 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 maximum is 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 environment friendly. Importance shall be given on the appraisal of the entrepreneurship such as educational qualification in the relevant discipline, knowledge in the technology/ process operating such project, track records in financial conduct specially with Banks/FI.
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 conditions required. 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.
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