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Bangladesh Bank and EEF

25 December 2005, 18:00 PM
LETTERS TO THE EDITOR
By Md. Mohsin Iqbal Dhanmondi, Dhaka
25 December 2005, 18:00 PM
As per agreement on December 26, 2000 with the government, Bangladesh Bank has set up the Equity and Entrepreneurship Fund [EEF] to encourage the entrepreneurs to invest in the risky but promising sectors like software industry, food processing and agro based industries. The major objective was to encourage the innovative entrepreneurs to support with 49 per cent equity by Bangladesh Bank without interest. The investors must be a potential one and the proposed project must be feasible showing the internal rate of return as acceptable. There is provision of share buy back.

The EEF has generated enough enthusiasm among the promising investors. This has also encouraged the Bangladesh Bank to open small and medium enterprise fund to encourage the small investors and entrepreneurs.

But very recently, the activities of EEF have reached to a total deadlock situation except disbursement to ongoing projects with very careful scrutiny and continuous monitoring.

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It is learnt that the quantum of disbursed money is more than the budgetary provision for the purpose. Presently, there is no fund to consider new cases and therefore, all activities are postponed sine a die.

A relevant question arose in the minds of the people-- how it happened that EEF failed to monitor the balance between the budget and the disbursed amount. I do not think it is under the political pressure, Bangladesh Bank failed to see the simple equation.