Govt to integrate venture capital with traditional financing system

Staff Correspondent

20 December, 2020 12:00 AM printer

The government will provide policy support to venture capital and equity funds companies to collaborate with financial institutes (FIs) to help technology startups get easier access to finance. 

Addressing a webinar on venture capital fund collaboration with banking and non-bank system, Financial Institution Division senior secretary Md Asadul Islam said the government was working to integrate venture capital with traditional institutions.

Venture Capital and Private Equity Association of Bangladesh (VCPEAB) organised the virtual roundtable to encourage a robust investment in the startup ecosystem through venture capital funding, said a news release on Saturday.

“We have also identified the barriers preventing the growth of the venture capital and startup ecosystem. To overcome these barriers, the role of financial institutions is very crucial,” senior secretary Asadul Islam added.

Karmasangsthan Bank chairman Kaniz Fatema and Managing Director Md Tajul Islam were guests of honour at the meeting presided by eGeneration chairman Shameem Ahsan. VCPEAB general secretary Shawkat Hossain delivered the address of welcome.

Speakers mentioned that financial institutions invest in startups globally through venture capital firms and earn attractive returns. Incorporating a similar framework in Bangladesh will prove to be beneficial for both financial institutions and venture capital and startup ecosystem.

Banks and NBFIs such as City Bank, National Credit and Commerce Bank, Southeast Bank, Eastern Bank, Mutual Trust Bank, National Bank, IDLC Finance, LankaBangla Finance, and Midas Finance have already invested in venture capital firms and gained significant portfolio.

Karmasangsthan Bank chairman Kaniz Fatema said the institute welcomes the opportunity to foster robust venture capital and startup ecosystem in Bangladesh through all possible measures, and will certainly look into the opportunity to be a supportive pillar for them.

Venture capital is the lone way to finance businesses at an early stage with a higher risk in return of investment. It is especially dedicated to the entrepreneurs related to information technology-enabled services, officials informed the meeting.

VCPEBA president Shameem Ahsan said the government has a vision to have at least five companies with a billion-dollar valuation.

BD Venture Managing Director Shafique-Ul-Azam, SEAF Bangladesh Ventures Managing Director Asif Mahmood, Athena Venture and Equities Chief Investment Officer Mahadi Hasan, Maslin Capital Managing Director Abdul Hafiz, Lanka Bangla Asset Management Company Chief Executive Officer Masum Ali, Alliance Capital Asset Management Managing Director Asadul Islam, IDLC Asset Management general partner Syed Javed Noor, Strategic Equity Management Managing Director  Ehsanul Kabir and Bangladesh Venture Capital invest associate Anwar Jahid also attended the virtual meeting.