BB launches ‘Udyog’ to boost youth entrepreneurship

In a major push to foster self-employment and drive grassroots economic growth, Bangladesh Bank yesterday issued a comprehensive guideline titled “Udyog: Upazila-Driven Youth Opportunity for Growth”.

The programme aims to identify and finance prospective young entrepreneurs across all upazilas in Bangladesh.

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Issued by the SME and Special Programmes Department, the circular directs the managing directors and chief executive officers of all scheduled banks to immediately implement the scheme.

The policy covers a wide range of legal ventures, including tech startups, agriculture, food processing, light engineering, renewable energy and handicrafts, while prioritising both innovative ideas and existing business models.

To ensure that funding reaches genuine and capable young entrepreneurs, Bangladesh Bank has set specific eligibility criteria.

Age limit: Applicants must be adult Bangladeshi citizens aged up to 28 years on the final date for submitting applications. Local residency: Candidates must be permanent residents of the respective upazila.

Clean credit history: Applicants must not be loan defaulters. Any default status revealed during Credit Information Bureau (CIB) checks will result in immediate cancellation of the application.

Furthermore, anyone who has previously taken a business loan from any bank or financial institution is ineligible. Employment status: Employees of public, semi-government and autonomous institutions are not eligible to apply. No collateral required: To reduce barriers for young entrepreneurs, loans under the programme can be disbursed without collateral.

The framework offers a maximum blended financing package of up to Tk 20 lakh per selected entrepreneur, based strictly on business requirements and proposed cost plans, according to the circular.

The funding will be split equally between a bank loan of up to Tk 10 lakh and a matching grant of up to Tk 10 lakh. If a business requires Tk 12 lakh, for example, the applicant will receive Tk 6 lakh as a bank loan and Tk 6 lakh as a grant.

The grant and loan portions will be disbursed simultaneously into the recipient’s bank account.

However, failure to repay the loan or misuse of funds will automatically convert the grant portion into an interest-free debt, recoverable under standard recovery laws. Bangladesh Bank will nominate one lead bank for each upazila to execute and coordinate the programme.

Any branch of a scheduled bank will collect application forms. On the working day following the application deadline, branches will forward all applications to the respective upazila lead bank, which will then send them to the district lead bank and eventually to Bangladesh Bank’s departmental offices.

A multi-stakeholder panel comprising central bank officials, representatives of scheduled banks, successful entrepreneurs, industry leaders and academics will evaluate business plans, market feasibility and employment potential before making the final selections.

Designated banks must sanction loans within 15 working days of the final selection, adhering to their internal credit rules and central bank regulations.

All participating banks will also provide financial literacy training, mentoring, market-linkage support and assistance with business registration to ensure the long-term sustainability of the new enterprises.