Venture Capital and Private Equity Association of Bangladesh (VCPEAB) today submitted a proposal to the finance minister seeking Tk 450 crore grant for salary payment of start-up business employees and office rent for six months.
The organisation's proposal came against the backdrop of reports that workers are being laid off due to the coronavirus situation.
In a press release, the VCPEAB said there are about 300 startups who are in distress over the anticipated more than Tk 450 crore loss, as selling of products and services is at a halt in the local market following the nationwide shutdown.
That is why they are seeking this support from the government, said Shawkat Hossain, general secretary of the organisation.
Earlier, two other leading trade bodies -- Bangladesh Association of Software and Information Services (BASIS) and Internet Service Providers Association of Bangladesh (ISPAB) -- sought Tk 660 crore and Tk 610 crore from the government for the employees' salary and office rent for six months.
The VCPEAB said almost 1.50 lakh people are directly employed in the startups of the country and their jobs are at risk.
Moreover, about seven lakh service providers who are associated with these startups are currently unable to provide their services, they said.
"Many startups have export-oriented income which has drastically fallen by at least 80 percent recently," reads the VCPEAB release.
Priority should be given to startups in government-based works and tenders so that the businesses can stay operational and their local market can be expanded, they said.
At the same time, they also sought a collateral-free loan at two per cent interest rate for the startups.
"Implementation of these proposals will ensure continuous revenue and cashflow for the startups and their ventures can be saved from the existential threat posed by the ongoing crisis," said Shawkat Hossain.
He said when the situation achieves stability, venture capital and private equity firms will be able to raise funds from local and foreign investors to support the startups with financing or re-financing to keep their businesses running.
VCPEAB Chairman Shameem Ahsan said the startup and venture capital ecosystem built over the years will collapse without government incentives and immediate action in this situation.