New Delhi: In a significant move to facilitate startups and small business, NRB Bank PLC has signed a significant agreement with Bangladesh Bank. Through this deal, NRB Bank will utilise Tk 500 crore startup refinance fund of the central bank to provide loans to startups and SME customers across Bangladesh.
This refinance fund was established by Bangladesh Bank in favor of new businesses as they are often facing difficulties in getting loans from regular banks. Many startups have good ideas but lack sufficient assets and long business history. Because of this, the banks are reluctant to lend. With this new system, the banks such as NRB Bank can lend money and subsequently receive money from the central bank at lower interest rates. This limits risk on the part of banks and makes it easier for them to lend money.
NRB Bank said this partnership will support small businesses, young entrepreneurs and early stage startups, in particular those working in technology, services and manufacturing. The bank plans to focus on businesses that can create jobs and help the economy grow. Officials also said that the loans will be provided on proper guidelines to ensure money is used for genuine business purposes.
Bangladesh Bank has been pushing the banks to support the startups as small businesses play a big role in the economy of the country. They create employment and support local supply chains and help increase innovation. However, access to finance is one of the biggest challenges to them.
With this agreement, NRB Bank becomes one of the active bank that participates in startup refinance scheme.
