Not only that, but they also would be able to generate at least a million direct employment for professionals by then
Policy support is essential to the survival and subsequent turnaround of the country's startups, which can then enable them to contribute 2% to the GDP by 2025, said the industry's key stakeholders on Sunday.
Not only that, but they also would be able to generate at least a million direct employment opportunities for professionals by then, they added.
Experts said this during a webinar “Budget Discussion on GDP Contribution by Startups” jointly organized by the Venture Capital and Private Equity Association of Bangladesh (VCPEAB) and the Capital Market Journalists' Forum (CMJF).
VCPEAB Chairman Shameem Ahsan chaired the session and also presented a keynote paper, while Planning Minister MA Mannan attended as chief guest.
State Minister for Information and Communication Technology (ICT) Zunaid Ahmed Palak, Chairman of Bangladesh Securities and Exchange Commission (BSEC) Prof Shibli Rubayat Ul Islam, FBCCI President Sheikh Fazle Fahim, President of BASIS Syed Almas Kabir, Investment Advisor of Startup Bangladesh of ICT Division Tina F Jabeen, Business Editor of Prothom Alo and Executive Member of Capital Market Journalist's Forum (CMJF) Sujoy Mohajan, and Pathao CEO Hussain M Elius were also present as panel speakers.
"Both our businesses and economy are facing an unprecedented challenge in light of Covid-19. Our startups, backed by venture capitals (VCs), have been struggling to survive amid this crisis. Venture capital has been instrumental for economic development for both developed and developing countries including France, Singapore, Japan, and Malaysia, where the VCs are getting adequate financial and policy support from their government, helping startup companies survive," said Shameem Ahsan.
Shameem, also general partner of Pegasus Tech Ventures, said Bangladeshi startups needed similar policy and financing support through tax exemption, grants, soft loans, and equity investments to survive during this "Herculean test."
Saving these businesses can save jobs created for 0.7m employees in the country's startups, he added.
"If we get cooperation from the government in the form of policy support, then we will be able to contribute to GDP at 2%, as well as one million and five million direct and indirect employment by 2025 respectively,” Shameem remarked.
General Secretary of VPEAB Shawkat Hossain said the government may consider creating a fund which will invest in an alternative investment fund management company’s funds. Alternative investment funds will succeed when matching investments would come from both the government and private organizations.
"We need a Tk200 crore fund for such an alternative fund management company, which may be exempted from income tax for a period of 10 years," he added.
Planning Minister MA Mannan said, "We have a lot of young entrepreneurs. They can play a role in creating employment. The sector has been given importance in the budget. The government will continue to support the startups."
State Minister for ICT Zunaid Ahmed Palak said policies have been initiated to support startups, for example VAT deduction at source was eliminated for ride sharing services.
"Startup Bangladesh has been supporting the startup ecosystem of our country through its accelerator programs and startup funds. We will continue to give both policy and financial support to these startups to grow,” he added.
BSEC chairman Prof Shibli Rubayat UL Islam said BSEC had passed the Alternative Investment Rules in 2015.
"Under this rule, various venture capital and private equity companies have been established in Bangladesh. We will certainly look into the opportunity to create a supportive system to ease the IPO process for these startups,” he added.
FBCCI President Sheikh Fazle Fahim said, “We have said in our budget proposal that we needed to focus on sectors that reduce our import options. Rather than thinking about one particular sector or product, we should concentrate on the domestic industries.
"We see good value created in our startup companies. We have been advocating the use of IT in all the business sectors so that we can compete worldwide," he added.
Shameem Ahsan urged private companies to invest their provident and gratuity funds in venture capital funds, and to allow insurance companies to invest in those VC funds.