Bangladesh’s central bank is preparing a 10 billion taka ($82 million) special fund to help young people launch businesses, offering low-interest loans and potential grants to entrepreneurs who repay their loans on time, officials said Tuesday.

The initiative aims to create at least 5,000 new entrepreneurs through a package comprising 5 billion taka in loans and another 5 billion taka in grants, according to officials familiar with the plan.

Bangladesh Bank Governor Mostaqur Rahman discussed the proposed scheme with senior representatives of the Association of Bankers, Bangladesh (ABB), an organization representing the country’s chief executives of commercial banks.

After the meeting, ABB Chairman and City Bank Managing Director Masrur Refee said the central bank was working on a refinancing and grant package for young people who want to start businesses but lack sufficient capital.

Under the proposed refinancing scheme, an eligible entrepreneur could receive up to 1 million taka in loans at an interest rate of around 4% to 6%, significantly below prevailing commercial bank lending rates of roughly 11% to 15%.

The program is also expected to include an incentive-based grant component. Entrepreneurs who demonstrate strong business performance and repay their loan installments on time could become eligible for grants from participating banks’ corporate social responsibility funds.

In some cases, an entrepreneur receiving a loan of up to 1 million taka could potentially qualify for an additional grant of a similar amount, subject to eligibility and performance criteria.

The proposed loans would not require collateral, potentially allowing young entrepreneurs without land or other assets to access formal financing.

Officials said the program would place particular emphasis on selecting entrepreneurs at the upazila, or sub-district, level. Bank branch managers or designated local committees would assess applicants based on the viability of their businesses, skills and genuine entrepreneurial activity.

The initiative is intended to reduce the influence of political or personal lobbying in the selection process and ensure that financing reaches viable businesses, officials said.

According to the ABB chairman, banks could divide responsibilities among themselves across more than 500 upazilas to identify and evaluate potential entrepreneurs.

The proposed scheme would not be restricted to a particular industry. Eligible businesses could include fisheries, livestock, food production, handicrafts, traditional textile products such as shataranji, manufacturing and other small and medium-sized enterprises.

The initiative is part of broader efforts to expand access to affordable financing and encourage young Bangladeshis to become entrepreneurs while promoting a stronger culture of responsible borrowing and repayment.