Entrepreneurship has always been one of the strongest engines of economic transformation in Bangladesh. As more young business leaders, innovators, and industrialists emerge across the country, access to long-term, affordable financing has become essential. Recognising this need, the Government of Bangladesh introduced the Equity and Entrepreneurship Fund (EEF)—one of the country’s most strategic financial support mechanisms aimed at promoting entrepreneurship and boosting investment in selected high-potential sectors.

Over the years, EEF has helped thousands of entrepreneurs establish new ventures, expand existing businesses, and enter specialised sectors that contribute to national growth. Yet, despite its popularity, many entrepreneurs remain confused about how to apply, what documents are required, eligibility conditions, and how the evaluation process works.

This comprehensive article explains everything you need to know about securing an EEF Loan—from eligibility and documentation to the application procedure, project evaluation, fund disbursement, and compliance responsibilities. Whether you are a first-time entrepreneur or an established investor, this guide will help you navigate the entire EEF process confidently.

Table of Contents

What is the EEF Loan?

The Equity and Entrepreneurship Fund (EEF) is a specialised financing scheme operated by the Government of Bangladesh through the Bangladesh Bank and IFC-style fund management units, aiming to support entrepreneurs in selected productive industries.

Key Features of the EEF Loan

Equity-based investment, not a traditional interest-bearing loan.
Government becomes a temporary investor in your project.
No collateral required, making it ideal for new entrepreneurs.
Only specific sectors qualify.
Long-term repayment structure, often including grace periods.
Low financial burden compared to bank loans.

Objectives of the EEF Loan

The EEF was created to achieve the following national development goals:

Enhance industrial growth in high-potential sectors
Support entrepreneurship and innovation
Promote import substitution and export-oriented industries
Create employment at district and rural levels
Encourage private sector participation in technology-intensive industries
Reduce dependency on bank loans for emerging sectors

EEF is particularly beneficial for entrepreneurs who have strong ideas and technical expertise but lack the financial capacity to obtain bank financing or collateral.

Sectors Eligible for EEF Financing

EEF loans are not open for all sectors. Only selected industries qualify, based on national policy priorities.

As of 2025, EEF loan financing is available primarily for:

A. Agriculture and Agro-Processing

This includes:

Fish, meat, dairy processing
Floriculture
Mushroom production
Broiler and layer farms
Hatcheries
Animal feed industries
Cold storage and food preservation
Vegetables and fruit processing
Apiculture
Seed production
Agro-machinery manufacturing

B. Information Technology (IT) and IT-Enabled Services

This includes:

Software development
Animation and VFX
Data centres
IoT and automation solutions
Digital devices manufacturing
IT training institutes
Fintech solutions
Robotics
Cybersecurity services
IT consultancy firms

C. New and Emerging High-Tech Manufacturing

Occasionally included depending on policy shifts:

Medical devices
Bio-technology
Renewable energy technology
Electronics assembly and manufacturing

Note: EEF rules are periodically updated, so applicants must check the latest eligibility list from Bangladesh Bank or the Finance Division before applying.

Who Can Apply for EEF?

Eligible Applicants

Individual entrepreneur(s)
Partnership firms
Private Limited Companies
Joint ventures
Existing companies seeking expansion

Basic Eligibility Criteria

Bangladeshi nationality
Clean financial and banking history
No loan default record
A viable business project
Relevant sector experience is highly preferred
Ability to invest equity contribution
Formal business structure (TIN, trade licence, etc.)

Foreign investors can participate only as minority stakeholders in a joint venture with Bangladeshi sponsors.

Project Size and Investment Structure

The EEF follows an equity participation model, meaning:

Government invests as an equity partner.
Sponsor also provides equity investment.
Debt can be taken from banks to complete project financing.

Common Investment Pattern

Investment Component	Typical Contribution
Entrepreneur/Sponsor Equity	30–40%
EEF Investment (Government)	40–60%
Bank Loan (Optional)	0–20%

The EEF contribution depends on project type, cost, and financial viability.

Maximum Loan Limits

EEF does not follow the typical “loan limit” system. Rather, it finances based on:

Project cost
Sector type
Compliance with fund guidelines

However, in practice, most EEF-supported projects range between:

Tk 1 crore to Tk 20 crore for Agro projects
Tk 50 lakh to Tk 15 crore for IT projects

Commercial scale projects may receive higher investment subject to evaluation.

What the EEF Loan Covers

EEF investment can be used to finance:

Allowed Expenditures

Land development
Building and construction
Machinery and equipment
Utility installation
Technology and software infrastructure
Licensing and certification costs
Working capital (limited)
Training and capacity development
Marketing and branding (initial)

Not Covered

Purchase of land
Loan repayment of existing debts
Luxury items, vehicles
Personal expenses
Non-productive investments

EEF strictly monitors expenditure to ensure the funds are used for approved purposes.

Step-by-Step Procedure to Apply for an EEF Loan

Applying for EEF is a multi-stage process involving documentation, scrutiny, and evaluation. Below is a detailed guide.

Step 1: Prepare a Complete Project Proposal (DPP)

A professional and detailed Development Project Proposal (DPP) is the foundation of a successful EEF application.

The DPP should include:

Executive Summary
Name & type of project
Sponsor/company introduction
Market feasibility study
Technical feasibility
Proposed machinery list
Utility requirements
Detailed cost analysis
Financial projections (5–10 years)
Economic impact analysis
Environmental considerations
SWOT analysis
Risk management strategy
Employment generation plan
Implementation timeline

A weak or incomplete project proposal is the most common reason for rejection.

Step 2: Prepare All Necessary Documents

You must arrange the following documents before submitting your application:

Sponsor’s Personal Documents

NID
Three passport-size photographs
Updated CV
Bank solvency certificate
TIN certificate
Tax return acknowledgement copy
Portfolio of previous business experience

Company Documents

Trade licence
TIN certificate
VAT registration
Memorandum and Articles of Association (for limited companies)
Certificate of Incorporation
Updated shareholding structure
Board resolution for project financing
Bank statement (last 12 months)

Financial & Technical Documents

Project feasibility report
Engineering layout
Machinery quotation (foreign/local)
Land ownership/lease documents
Environmental clearance (if applicable)
Cost estimation and BOQ
Cash flow projections
Project implementation schedule

Step 3: Submit Online Application

Applications must be submitted via:

**EEF Online Application Portal (if available)

OR**
Manually through the designated Fund Management Committee office.

You must categorise your project under either:

Agro-based Industry, or
IT/Technology Sector

A tracking number is issued for all applications.

Step 4: Primary Screening and Documentation Review

The EEF Scrutiny Committee checks:

Applicant identity
Sector eligibility
Completeness of documents
Initial financial soundness
Feasibility summary

If approved, the project moves to the detailed evaluation stage.

Step 5: Detailed Project Evaluation

A technical and financial evaluation committee conducts an in-depth review.

They examine:

Technical viability
Environmental safety
Market potential
Financial projections
Management capability
Project risks
Sponsor’s past record
Equity contribution capacity

Site visits may be conducted to asses land and infrastructure.

Step 6: Interview / Presentation by the Entrepreneur

You will be asked to present:

Project summary
Financial plan
Operational strategy
Economic benefits
Risk management
Why EEF should invest

Strong communication and confidence are crucial.

Step 7: Recommendation to the Fund Management Committee (FMC)

If the evaluation is satisfactory, your project is forwarded to the FMC, which makes the final approval decision.

Step 8: Signing of Agreements

Once approved:

You sign an Equity Participation Agreement
You sign the Project Implementation Agreement
A special account is created for fund disbursement

You may be required to provide post-dated cheques, PG bonds, and equity confirmation certificates.

Step 9: Disbursement of Funds

Funds are disbursed in phases depending on project progress:

Common Disbursement Stages

Initial disbursement (10–20%)
Machinery L/C opening
Construction completion
Installation and commissioning
Commercial operation

Each phase requires documentation and site verification.

Step 10: Monitoring and Compliance

EEF has strict monitoring rules:

Monthly progress reports
Quarterly financial statements
Site inspections
Fund utilisation audits
Environmental compliance checks
Submission of VAT, tax, and bank statements

Failure to comply may suspend future disbursements.

Step 11: Repayment and Exit Mechanism

Because EEF is an equity investment, repayment is structured differently:

Repayment Model

No fixed EMI
Profit sharing or redemption-based repayment
Government exits after receiving its investment amount + profit share
Sponsor becomes the sole owner after settlement

This makes EEF one of the most entrepreneur-friendly financing schemes in Bangladesh.

Reasons Why EEF Applications Get Rejected

Many applications are declined due to avoidable mistakes.

Common Rejection Reasons

Weak or unrealistic project proposal
Poor market feasibility
Insufficient technical planning
No previous experience in the relevant sector
Discrepancies in financial projections
Land ownership disputes
Negative CIB (Credit Information Bureau) report
Tax non-compliance
Incomplete documents
Unclear fund utilisation plan
Weak equity contribution capability

A well-prepared application can overcome 80% of these issues.

How Long Does It Take to Get an EEF Loan?

The entire process typically takes:

6 to 18 months, depending on:

Project size
Sector
Documentation quality
Evaluation backlog
Availability of funds

Agro projects usually take longer due to environmental and technical assessments.

Tips to Increase Your Chances of Approval

This section is especially important for new entrepreneurs.

A. Build a Strong, Evidence-Based Project Proposal

Include:

Market analysis supported by data
Competitor analysis
Pricing strategy
Demand forecasts
Realistic financial projections
Risk mitigation model

B. Choose the Right Sector

EEF prioritises:

Innovation
Technology
Job creation
Export potential
Import substitution

Selecting a high-priority segment significantly enhances approval chances.

C. Demonstrate Technical Expertise

If you lack personal experience:

Add a technical partner
Hire a sector specialist
Form an advisory committee

This makes your application much stronger.

D. Maintain Clean Banking History

A negative CIB report almost always results in rejection.

E. Arrange Sufficient Equity

Sponsors must contribute their share before EEF releases major instalments.

F. Present a Professional Business Plan During Interviews

Highlight:

Profitability
Social impact
Long-term sustainability
Economic contribution

Advantages of EEF Loans

EEF financing offers several unique benefits:

1. No Collateral Required

Unlike traditional bank loans, EEF doesn’t require land or other collateral.

2. Low Financial Burden

Repayment is linked to project performance, not fixed instalments.

3. Long-Term Funding

Allows business to grow without financial pressure.

4. Government Support

Boosts credibility and investor confidence.

5. Access to Technology and Expertise

Many EEF projects get exposure to global markets and investors.

6. Ideal for New Entrepreneurs

Especially beneficial for startups with good ideas but limited capital.

Disadvantages and Challenges

However, EEF is not without challenges.

1. Lengthy Approval Process

Applications take months or years.

2. Intense Documentation Requirements

Entrepreneurs must be highly organised.

3. Close Monitoring

Strict reporting and compliance rules apply

4. Partial Funding

You must arrange your own equity.

5. Not All Sectors Qualify

EEF supports limited industries only.

Best Types of Projects for EEF Funding

High-Potential Agro Projects

Dairy processing
Fish feed and poultry feed
Agro machinery manufacturing
Cold storage
Food dehydration
Aquaculture
Seed production

High-Potential Technology Projects

Software factories
Gaming and animation studios
Data centres
Semiconductor assembly units
Fintech solutions
Medical device manufacturing

Frequently Asked Questions (FAQ)

1. Is EEF a loan or equity?

It is equity financing, not a traditional loan.

2. Do I need collateral?

No, EEF is collateral-free.

3. Can I apply without prior experience?

Yes, but hiring an expert improves your chances.

4. How much equity must the sponsor provide?

Usually 30–40%, depending on project size.

5. Can EEF funds be used to buy land?

No, land purchases are strictly prohibited.

6. Can foreigners apply?

Only as minority partners in Bangladeshi companies.

7. How long does approval take?

Between 6 to 18 months on average.

Should You Apply for an EEF Loan?

The EEF Loan is one of the most powerful financing opportunities available to Bangladeshi entrepreneurs. Its equity-based structure, low financial burden, and government backing make it particularly suitable for:

Young entrepreneurs
SMEs in high-growth sectors
Technology innovators
Agro-industrial ventures
Startup founders with strong ideas

However, the process can be lengthy, documentation-heavy, and highly competitive. To succeed, you must submit a well-researched, professionally written project proposal, maintain clean banking records, and demonstrate both capability and commitment.

If you have a viable idea, a strong growth plan, and the patience to navigate the approval process, the EEF Loan can be one of the most impactful stepping stones in building a successful enterprise in Bangladesh.