Keep startups afloat, says platform of venture capital firms
Startup companies and an association of venture capital firms have urged for financial and policy support from the government to help them survive the coronavirus pandemic.
"Both our businesses and economy are facing an unprecedented challenge and so, start-ups, backed by venture capital, have been struggling to survive the recent economic scenario," said Shameem Ahsan, chairman of the Venture Capital and Private Equity Association of Bangladesh.
Bangladeshi startups need support through tax exemptions, grants, soft loans and equity investments to pass this 'herculean' test, he said, adding that the government could form a fund of Tk 200 crore to provide soft loans for startups."
Ahsan made these remarks during his keynote presentation while chairing a roundtable session organised by the association in partnership with Capital Market Journalist Forum yesterday.
Venture capital has been instrumental in the economic development of both developed and developing countries, said Ahsan, also a general partner at Pegasus Tech Ventures.
Governments in countries such as France, Singapore, Japan, and Malaysia are providing adequate financial and policy support to venture capital firms, helping startups survive, he added.
Planning Minister MA Mannan said the government would try to eradicate all problems being faced by startups.
The government is well focused on ensuring the wellbeing of startups because they are creating employment opportunities for educated youth, he said.
Bangladesh's economy is expanding as the people's purchasing power is soaring and the demand for IT-based products and services has surged.
"Therefore, there are a lot of opportunities for startups," said State Minister for ICT Zunaid Ahmed Palak.
If homegrown startups cannot meet demand then foreign companies will fill the void. Luckily though, local firms are staying on target and generating employment for the youth, he added.
"We hope we will be able to lend a fund of around Tk 100 crore to the startups in the upcoming year while maintaining due diligence," Palak said, requesting all startups to get registered with the government.
The government can exempt registered startups from paying corporate tax till 2024, he said, urging the planning minister to take an initiative on financing startups through the provident fund of government officials.
This is an era of startups and e-commerce, said Prof Shibli Rubayat UL Islam, chairman of the Bangladesh Securities and Exchange Commission. "It has huge opportunities to diversify the export basket but they need financial support to grow."
The stock exchanges have SME boards so that startups can register and raise funds, he said as a special guest at the event.
The startups may be exempted from paying income tax for a period of 10 years, said Shawkat Hossain, secretary general of the association.
Venture capital firms and startups need a minimum of 10 years to earn from their core business so tax on this small income, if any, will be very disastrous for the industry, he clarified.
Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services; Tina F Jabeen, investment advisor of Startup Bangladesh of ICT Division, Wali-Ul-Maroof Matin, founder and managing director of Maslin Capital, and Sujoy Mohajan, business editor of Prothom Alo, also spoke at the event.
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