Alternative fund managers seek policy support, tax incentive

Alternative fund managers on Thursday sought tax exemptions and called for creating a fund of the funds by the central bank to foster investments in Bangladeshi start-ups.

Venture Capital and Private Equity Association of Bangladesh (VCPEAB) made the urge at a roundtable on "Venture Capital and Start-ups for a Post-Covid Resilient Economy".

The programme was in partnership with the Capital Market Journalists' Forum (CMJF) in the backdrop of the national budget for the fiscal year 2021-22.

Planning Minister MA Mannan was the chief guest while Bangladesh Securities and Exchange Commission (BSEC) Chairman Professor Shibli Rubayat-Ul-Islam spoke at the programme as a special guest.

VCPEAB President Shameem Ahsan chaired and moderated the session, while Shanta Asset Management Ltd's Vice-Chairman Arif Khan delivered the keynote presentation, and Munir Hossain, general secretary of the CMJF delivered the vote of thanks.

Arif Khan said, among 105 countries, Bangladesh ranks 98 in the global start-up Ecosystem Ranking 2020 by Start-up Genome and Global Entrepreneurship Network while India ranked 23, Indonesia 54, and Pakistan 82.

"Today's start-ups will be the building block of the next decades in Bangladesh. Appreciating the role of the Government of Bangladesh in the last five years, I would like to request all the regulators and stakeholders to remove the major obstacles as fast as possible for a robust start-up ecosystem to unleash the opportunity in an undiscovered gem of Asia," he said.

"The government is here to support the VC and start-up sector, and it has taken joint efforts with regulators, private financial institutions, and venture capitalists," said Planning Minister MA Mannan.

"Together we plan to create an environment where start-ups can truly sustain and create an impact in our country. Moreover, we aim to work on the policy level to allow entrepreneurs to sustain and operate their businesses with ease."

Professor Shibli Rubayat-Ul-Islam said, "We have always been incorporating new rules and regulations to foster investments in start-ups and to assist in bringing start-ups to the capital market with due diligence."

Stating start-ups use innovative business models to drive growth, he said, "We are here to support these businesses through capital market inclusion and investments. So that they can bring forth the latest innovations in our economy."

"In the next 15 years, majority organisations in the world will initiate impact-driven businesses and the majority of the world population will consume products and services from impact-driven companies," said VCPEAB President Shameem Ahsan.

"It will also help us become less susceptible to pandemics like Covid-19 and build a resilient economy. The government departments and agencies such as the ministry of finance, the ministry of planning, the ministry of ICT, the central bank, the securities and exchange commission, and the revenue board need to support this ecosystem with favourable policies and tax incentives to give it a massive boost."

BSEC Commissioner Professor Dr Shaikh Shamsuddin Ahmed said venture capital can play a vital role in bringing new start-ups to our economy.

"These start-ups should not be limited to only a few cities where everything is technology-driven. Instead, we need to decentralise these businesses to bring diversity and provide the services to a greater population," he added.

He also advised for a bond that would finance the venture capital firms.

Start-ups, while expressing their experience, said it is tough to avail local investments compared to that from foreign venture capital investors.

Echoing them, venture capital fund managers said most in the cases they struggle to get sufficient funds from local investors.

Bangladesh also needs the country branding, in line with its remarkable growth story, to catch up with its peers in terms of availing foreign venture capital funding.

Speakers emphasised removing policy barriers behind low venture capital activities.

Abu Farah Md Nasser, deputy governor at the central bank, said, "The Bangladesh Bank will ensure as much facility as possible under the current regulations. The market demand for credit is already there and the banking sector has to be efficient to be an important part of the VC and start-up ecosystem."

CMJF President Hasan Imam Rubel, CMJF Executive Member Sujoy Mohajan, Agrani Bank Chairman Zaid Bakht, SEAF Bangladesh Ventures LLC Managing Director Asif Mahmood, Microsoft Chief Partner Officer at SEA Emerging Region Anh Pham, Shohoz Managing Director Maliha Quadir, Light Castle Partners Director Shawkat Hossain, Chaldal CEO Waseem Alim, BD Venure Managing Director Shafique-Ul-Azam, Alliance Capital Managing Director Kh Asadul Islam Ripon, Athena Ventures Managing Director Mahbub H Mazumder, IDLC Finance General Manager Javed Noor, Bangladesh Venture Capital Ltd representative Anwar Jahid were present, among others.