Staff Correspondent:

Bangladeshi citizens aged 21 and above are now eligible to apply for startup loans from commercial banks with a minimal interest rate of just 4%, according to a new master circular issued by Bangladesh Bank on Wednesday (July 9).

The revised policy outlines major revisions to the existing startup financing system, including broader eligibility criteria and increased loan limits.

The circular said startups that are already operating will also be eligible, provided they are not older than 12 years from the date of registration.

Banks and financial institutions can access refinancing support from a Tk500 crore ‘Startup Fund’ established by the central bank to distribute these loans, it added.

The central bank also increased the maximum loan limit from Tk1 crore to between Tk2 crore and Tk8 crore — depending on the development stage of the startup.

One of the most notable changes in the policy is the inclusion of equity financing. For the first time, banks will be allowed to make equity investments in startups, in addition to providing traditional loans.

To facilitate this, Bangladesh Bank has announced the formation of a venture capital company, through which banks can invest their entire startup funds as equity. These investments will be shown as equity in the banks’ financial statements.

The master circular further stated that the interest rate for borrowers will be capped at 4% and can be charged on a quarterly basis. Banks and financial institutions will have to use their own loanable funds to finance these startups.

However, under the new circular, they cannot issue new loans from the old startup funds they had created internally. “Disbursements for loans already sanctioned under the old system may still continue,” it added.

Bangladesh Bank emphasised that the revised policies aim to stimulate innovation, employment, and sustainable growth by enabling easier access to finance for high-potential startups. The master circular also aligns with the Sustainable Development Goals (SDGs) by fostering entrepreneurial ecosystems and global investment connectivity.

Further guidelines regarding the formation and operation of the upcoming venture capital firm will be released in a separate circular, the central bank said.