Senior Correspondent 

For a young person in an upazila, starting a business can begin with something very simple: knowing what people around him need.

It could be a food-processing unit using locally available crops, a small manufacturing venture, a handicraft business, an agro-based enterprise or a service business built around a gap in the local market.

But knowing the opportunity and getting a bank to finance it are two different things.

This is where Bangladesh Bank's new UDYOG — Upazila-Driven Youth Opportunity for Growth – faces its real test.

The programme seeks to identify promising young entrepreneurs at the upazila level and bring them into formal financing. Bangladesh Bank says the initiative is intended to support youth entrepreneurship, employment generation, innovation and enterprises based on local resources.

The programme has an important advantage from the beginning: applicants do not need to have an existing account with the bank where they apply, and there is no application fee. Applications can be submitted through scheduled bank branches in the relevant upazila.

But access to the application form is only the beginning.

The harder question is whether the system can recognise a potentially good business idea and turn it into a commercially viable enterprise.

Md Mohsinur Rahman, 1st EVP and Head of SME Banking at Prime Bank, described the problem as a gap in perspective between entrepreneurs and banks.

An entrepreneur may see a customer, a local demand or an opportunity. A banker, meanwhile, has to think about the business model, cash flow, repayment capacity, risk and whether the proposed activity is commercially viable.

As Rahman put it, the SME dilemma is that an idea may appear attractive to the entrepreneur, but its commercial viability may not immediately be visible from the bank's perspective.

That gap could become particularly important under UDYOG because many applicants will be first-time entrepreneurs.

From an idea to a business

The UDYOG application itself shows that Bangladesh Bank is trying to look beyond a simple loan application.

Applicants are asked to explain their business idea, potential customers, expected time to start, location, products, raw-material sources, markets, expected sales and profitability.

They are also asked about competitors, business risks, risk-mitigation plans, existing workers and future employment potential.

The financing section goes further, asking applicants to identify the amount of capital required and how it would be used — including machinery, raw materials, operating costs, branding, registration, marketing, wages, transportation, technology and training.

These are the right questions, but experts believe a young entrepreneur may have strong knowledge of a local market but weak presentation skills. 

Another applicant may prepare an impressive application but have little understanding of customers or cash flow.

The selection mechanism therefore needs to distinguish between presentation ability and entrepreneurial potential.

The bigger idea: take finance to the entrepreneur

Rahman's perspective also points to another important feature of UDYOG — decentralisation.

For years, many formal financial initiatives have been driven from bank head offices. UDYOG attempts to take the process down to the upazila level.

The programme's current phase covers all 64 upazilas in eight districts across the country's eight divisions, with applications open from September 16 to October 15, 2026.

The Lead Bank mechanism is particularly important here. Applications received by scheduled banks are to be registered and forwarded to the Lead Bank of the upazila on the next working day.

Rahman sees an opportunity to use that structure not merely for loan processing but for incubation, training and facilitation.

Banks could work together around local clusters, identify promising activities, arrange training and help entrepreneurs overcome practical barriers such as documentation, licensing and other formalities.

Linking UDYOG with local products

There is another potentially powerful dimension: One Village One Product (OVOP).

Rahman recalled that the thinking around the initiative was connected to the OVOP concept — identifying products or economic activities that have a natural connection with particular localities.

This could give UDYOG a stronger commercial foundation.

Instead of financing hundreds of unrelated ideas scattered across rural areas, banks and local authorities could identify promising local clusters — such as food processing, agricultural products, handicrafts or other locally viable activities — and build financing, training and market support around them.

UDYOG’s design also recognises that money alone won’t solve problems. 

To mitigate this, the programme includes financial literacy, training, mentoring and assistance relating to business registration, business plans and market linkage.

The financing can cover not only equipment and raw materials but also areas such as branding, marketing, technology and skills development.

Still, the real test will come after selection.

A young entrepreneur who receives financing but cannot obtain a trade licence, complete necessary registrations, understand taxation, maintain basic accounts or find customers can quickly run into difficulties.

This is why Rahman's proposal for a one-stop service at the upazila level deserves attention.

Such a centre, potentially linked with the UNO office, could bring together information and facilitation for requirements such as trade licences, DBID, BIN, fire-safety clearances and other relevant certificates.

The idea is not necessarily for banks to become government licensing offices.

Rather, an entrepreneur should not have to move from one office to another simply to understand what documents are required, where to apply and how to complete the process.

A genuine one-stop support mechanism could therefore reduce one of the less visible barriers to formal entrepreneurship.

But it’s not all doom and gloom.

Md Iqbal Hossain, Chief Financial Officer and Head of Treasury at Sonali Bank PLC, said the UDYOG programme could become a highly effective initiative for developing young entrepreneurs and generating employment if participants are able to bring viable business ideas and properly manage their operations.

He stressed that financing alone would not guarantee success. Banks would need to ensure that the funds are properly utilised for the intended business activities and that the financed enterprises are actually operating. 

“Central bank, commercial banks and regulators — all three parties have to execute the programme properly,” he said.

Hossain also suggested that financing should be accompanied by technical and vocational training so that young entrepreneurs have the skills required to run their businesses. He further supported a one-stop service mechanism to reduce the tax, licensing and other administrative hurdles faced by new entrepreneurs.

The programme currently targets 5,000 young entrepreneurs annually, drawing from a pool of grants – for youth, for women, for farmers – and tailoring it as needed. 

On the amount, Bangladesh Bank spokesperson Arif Hossain Khan said UDYOG does not have a separate dedicated fund or new refinancing pool. 

Instead, financing will be arranged through existing government-supported funding windows according to the type of applicant — including the startup fund for startups, the SME fund for women entrepreneurs and existing incentive schemes for other applicants.

He said fund availability would not be the main constraint if a project is commercially viable and approved, as it can be linked to the appropriate existing refinancing scheme. 

Khan also said Bangladesh Bank would work with agencies such as the NBR to address regulatory or tax-related hurdles if concessions or policy adjustments are required for successful implementation.

But the number of loans or grants disbursed should not be the only measure of success.

The more meaningful questions will emerge one year later, when the businesses’ profitability, job creation, sales, entrepreneur transformation and graduation to SME financing can be measured.

How candidates are rejected or approved will also be a factor, according to experts, who believe the real challenge would lie in the attempt to bring banks, young entrepreneurs, local government and business-support institutions into the same local ecosystem.