Integrated policy needed for venture capital financing: experts

An integrated policy is needed to put into practice venture capital financing, an alternate investment platform, in order to create new entrepreneurs, said speakers yesterday.

The government formulated the Alternative Investment Rules in 2015, but the law has not been implemented yet because of a lack of coordination, they said at a workshop.

The Bangladesh Institute of Bank Management (BIBM) organised the workshop titled "Venture Financing in Bangladesh: An Exploration" on its campus in Dhaka.

Abu Hena Mohd Razee Hassan, a deputy governor of the Bangladesh Bank, said capital for new and emerging businesses typically comes from high net worth individuals and venture capital firms.

He said these investors usually provide capital unsecured by assets to young, private companies with the potential for rapid growth. This type of investment inherently carries a high degree of risk. Venture capital is a long-term or "patient capital" that provides companies the time to mature into profitable organisations.

Helal Ahmed Chowdhury, a supernumerary professor of the BIBM, said new entrepreneurs do not have capacity to give collateral for bank financing. So, venture capital can play a significant role in arranging financing for them.

Experienced people need to develop the venture capital market, he said. Yasin Ali, another supernumerary professor of the institute, said venture capital is for financing new ideas. So, the central bank would have to work in favour of establishing such companies. Toufiq Ahmad Choudhury, director-general of the BIBM, chaired the workshop, while Shah Md Ahsan Habib, a director, presented the keynote paper.