SME Banking in Bangladesh Through

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SME Banking in Bangladesh Through BRAC Bank Ltd.

INTERN REPORT
An Internship Report Presented to the Faculty of Business Administration in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business Administration.

Submitted To
Professor Md. Musa Khan Department of Business Administration Asian Uni ersity Bangladesh

Submitted B
Ra!eya A"ter Program# BBA ID# $%%&'''() Batch# (*th

!ate o" Submission# %+th ,cto!er $%'(

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Letter o" Transmittal
Date# %+-'%-$%'( .o/ Professor Md. Musa Khan Department of Business Administration Asian Uni ersity of Bangladesh Sub# Submission o" Internshi' Re'ort. Dear 0ir/ I 1ould li"e to than" you for assigning me this su!2ect to prepare the internship report. .his tas" has !een gi en me the opportunity to e3plore one of the most important aspect of the BRA4 Ban" loan 1hich is "no1n as 0M5 loan. .he report contains a comprehensi e study on the small and medium enterprise loan in BRA4 Ban" 6imited. It 1as a great pleasure for me to ha e the opportunity to 1or" on this topic 70M5 !an"ing of Bangladesh through BRA4 Ban" 6imited8. I ha e endea or my !est to come out 1ith a good one. I 1ould !e ery happy to pro ide you 1ith any clarification regarding the report. 9ould you please "indly accept my paper and o!lige me there!y. .han" you. 0incerely :ours/ ;;;;;;;;;;;;. Ra!eya A"ter ID < $%%&'''() Program# BBA =Ma2or in Finance> AUB
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Bachelor of Business Administration

S$PER(ISOR)S CERTI*ICATIONS
.his is certifying that Ra!eya A"ter/ ID# $%%&'''()/ Batch# (*th/ Ma2or# Finance Program# BBA/ Asian Uni ersity of Bangladesh has undergone her internship under my super ision and guidance. 0he has prepared this report 1hich is origin in nature and not su!mitted else1here. I 1ish her e ery success.

;;;;;;;;;;;;;..

Md. Musa Khan Professor Department of Business Administration Asian Uni ersity of Bangladesh.

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D546ARA.I,?
I do here!y declare that the dissertation titled# 7 SME banking of BRAC Bank Limited (BBL) in Bangladesh8 su!mitted to the Asian $ni%ersit o" Bangladesh for completion of this is an original 1or" of mine. ?o part of it/ in any form/ has !een su!mitted to any Uni ersity or Institute for any degree/ diploma or for other similar purpose.

;;;;;;;;;;;;;; Ra!eya A"ter ID# $%%&'''() Program# BBA =Ma2or in Finance> AUB Batch# (*th Asian Uni ersity of Bangladesh

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A+kno,ledgement
I 1ould li"e to e3press my gratitude to all the people 1ho 1ere in ol ed !oth directly and indirectly in the preparation of this report. I apologiAe to the people 1hose names that I ha e not mentioned/ and their contri!ution is highly appreciated !y me. At first/ I 1ould li"e to than" my academic super isor Professor Md. Musa Khan/ Department of Business Administration/ BBA for guiding me and for gi ing me the opportunity to initiate this report. More specifically/ I 1ould li"e to than" him for imparting his time and 1isdom. I 1ant to than" all the officials of BRA4 Ban" 6imited that 1ere in ol ed. I 1ould specially li"e to than" Muhammad ?oor-5-Alam =Branch Manager>/ 0hah A!dullah Mo!in Ra2i! =40M>/ Bahid Cassan =B00,> and An1ar Cossain =400,> of 4DB Road/?arsingdi Branch for gi ing me time and sharing their thoughts and insights regarding their Ban"ing strategies and their !an" as a 1hole. I 1ould li"e to than" them for gi ing me the required information to commence this report and for pro iding the permission to do the required research 1or". Finally/ I 1ould li"e to than" my parents 1hose influence and inspiration has ena!led me to complete this report.

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0mall D Medium 5nterprises =0M5s> are important to almost all economies in the 1orld/ especially to the de eloping countries as they face ma2or employment and income distri!ution challenges. .here are a!out )% la"h 0M5s and microenterprises in Bangladesh/ according to Asian De elopment Ban". In recent times/ 0M5s ha e come into the forefront of de elopment agenda due to the recognition of their contri!ution in fostering gro1th/ sustaining glo!al economic reco ery/ generating employment and reducing po erty. Both micro-finance institutions and !an"s are !eginning to realiAe the potential of 0M5 mar"et and are designing ne1 financial products for it. 0ome !an"s and other financial institutions had !een pro iding loans to such enterprises for long/ though not in the classification of 0M5 Financing. ?o1/ almost all !an"s and non-!an" financial institutions =?BFI> in the country are pro iding loans to the sector/ under different go ernmental schemes as 1ell as through their o1n product portfolios. BRA4/ the largest pri ate de elopment organiAation of the 1orld/ !elie es that micro finance is an important tool in !rea"ing the cycle of po erty. BRA4 realiAed that there is a ast group of small and medium entrepreneurs in the country/ 1ho ha e no access to institutional credit. Upon realiAation BRA4 introduced a full-fledged commercial !an"- BRA4 Ban"/ in Euly $%%'.BRA4 Ban"Fs effort is noted in this regard for its complete focus on the credit needs of the small and medium enterprises. 0ince the initiation of 0M5 operations !y BRA4 Ban"/ it has !ecome the Ban"Fs largest and most profita!le enture. BRA4 Ban" is the largest 0M5 Ban" in the country and @th largest 0M5 Ban" in the 1orld in terms of outstanding loan amount. In its '' years of operations/ it has dis!ursed ." $$/%%% crore loans to @ la"h 0M5 entrepreneurs across the country through **( customer touch points =0M5 Unit ,ffices/ 0M5 0ales and 0er ice 4enters/ Krishi Branches/ and Branches. .he finance has created direct employment to '( la"h people and it has a 0M5 customer !ase of more than ( lac people. .his report aims at analyAing the current 0M5 financing status and BRA4 Ban"Fs contri!ution in 0M5 !an"ing. Moreo er a comparati e analysis had !een done to compare BRA4 Ban"Fs 0M5 !an"ing 1ith four other pri ate commercial !an"s 1hich also ha e good name in terms of ser ing 0M5s. .he comparison is done in terms of 0M5 Ban"ing esta!lishment period/ a aila!ility of 0M5 customer touch points/ 0M5 product differentiation etc. Although there can !e no comparison 1ith the largest 0M5 !an" of the 1orld/ BRA4 Ban" 6td !ut the report !rings out the e ol ing 0M5 !an"ing of these four !an"s 1hich has some special features 1hich can lead them in successfully attracting 0M5 customers.

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TABLE O* CONTENTS
E-e+uti%e Summar

C/APTER 0#Introdu+tion
0.0,rigin of the Report 0.1,!2ecti e of the Report 0.20cope of the Report 0.2.0 Broad ,!2ecti es 0.2.1 0pecific ,!2ecti es 0.3 Methodology of the Report 0.4 6imitation of the Report

. 56701 05 05 00 00 00 00 01

C/APTER 1# Organigational

O%er%ie,

1.0 Introduction 1.1 BRA4 Ban" 6imited 1.2 Business Di isions of BRA4 Ban" 6imited 1.2.0 Retail Ban"ing di ision 1.2.1 Premium Ban"ing 1.2.2 0upreme Ban"ing 1.2.3 53cel Ban"ing 1.2.4 5asy Ban"ing 1.2.. 4orporate Ban"ing di ision 1.2.8 0M5 Ban"ing Di ision 1.3 ,rganiAational 0tructure 1.4 Gision/ Mission/ 6ogo 1.4.0 Mission 1.4.1 Gision 1.4.2 4ore Galue 1.4.3 6ogo 1.. 0hare Colding 0tructure D 0u!sidiaries of BRA4 Ban" 6imited 1...0 0hareholding 0tructure 1...1 0u!sidaries of BRA4Ban"

02710 03 03 04 04 04 04 0. 0. 0. 08 08 09 09 09 06 06 15 15 15 1171. 12 12 13 13 13 14 1. 1.

C/APTER 2# Internshi'

E-'erien+e

2.0 Internship ,pportunity in Research D De elopment Di ision 2.0.0 My e3perience 2.0.1 Pro2ect I 1as In ol ed 9ith 2.0.1.0 Mo!ile 4redit 4ard 2.0.1.10M5 5mployment Heneration 2.0.1.2 Mystery shopping 2.0.1.3 ,ther acti ities 2.1 ,!ser ation
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C/APTER 3# SME

Banking through BRAC Bank

3.0 Introduction to 0M5s 3.0.0Definition of 0M5 3.0.1 5 olution of 0M5 Financing Importance 3.0.2 Initiati es ta"en for 0M5 Financing 3.0.3 4ontri!ution of 0M5s in Bangladesh 3.1 4urrent 0tatus of 0M5 Financing 3.2 BRA4 Ban"Fs 4ontri!ution in 0M5 Ban"ing 3.2.0 Cighlights of BRA4 Ban"Fs 0M5 Ban"ing 3..2.1 Important Features of BRA4 Ban"Fs 0M5 Di ision 3.2.2 BRA4 Ban"Fs A aila!ility

18735 19 19 16 25 22 23 28 29 29 35 30741 31 31 32 33 34 3. 38 39 36 36 40 42748 43 44 4. 4. 48

C/APTER 4# Anal

sis:*indings

4.0 Analysis of 6oan Repayment Beha ior 4.1 Relationship of reco ery rate 1ith age of the !orro1ers# 4.2 Relationship of reco ery rate 1ith education of the !orro1ers# 4.3 Relationship of reco ery rate 1ith e3perience of the !orro1er# 4.4 Relationship of reco ery rate 1ith amount of loan ta"en# 4.. Relationship of reco ery rate 1ith term of loan# 4.8 Relationship of reco ery rate 1ith income of the !orro1er# 4.9 Relationship of reco ery rate 1ith the personal asset of the !orro1er# 4.6 Relationship of reco ery rate 1ith the ?ature of !usiness# 4.05 Findings 4.00 09,. Analysis

C/APTER .# Con+lusion

:Re+ommendation

..0 4onclusion ..1 Recommendation ..2 Bi!liography ..3 0uggestions For Impro ement ..4 Hlossary

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INTRODUCTION OF THE REPORT

0.0 Ba+kground o" the Re'ort .his report is one of the ma2or parts of BBA Program offered !y Asian Uni ersity %f Bangladesh. In todayFs 1orld/ education is not 2ust limited to !oo"s and classrooms. 5ducation no1-a-days is understanding the real 1orld and applying "no1ledge and education for the !etterment of the society. 0o the Internship is such a 1ay that helps to apply the "no1ledge and understanding of the courses and to use them in a practical field. BRA4 Ban" 6imited gi es me this opportunity to !e engaged there to gather practical e3perience a!out the real !usiness 1orld and to o!ser e different practical aspects of education. Asian Uni ersity of Bangladesh has goals to produce 1orld-class graduates 1ithin the local en ironment/ 1ith "no1ledge and s"ills to pro ide leadership in enterprise/ pu!lic ser ice and 1elfare. Internship of Department of Finance is a step to1ards fulfilling this commitment !y gi ing the students an opportunity to get ready for the real 1orld !efore they enter into it. A !usiness report is defined as an orderly/ o!2ecti e communication of information that ser es some !usiness purpose. .herefore/ in order to ser e this !usiness purpose a topic of the report has to !e clearly stated. .he topic that has !een defined for studying in this report is in infiniti e phase. It means that there are further scopes to impro e and study on the topics that are discussed in this report. .he topic has !een defined as8 SME Banking !i%ision BRAC Bank Limited8.

0.1 S+o'e o" this Stud
Internship e3perience plays a ital role for e ery student to implement their theoretical "no1ledge and get a practical "no1ledge from any organiAation. A student can implement this internship e3perience in his future 1or" area. BRA4 Ban" Bangladesh 6imited gi es me the opportunity for gathering practical e3perience and preparation of the report. Finally I prepared this report under the super ision of Professor Md. Musa Khan/ 0enior 6ecturer of Asian Uni ersity of Bangladesh.

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0.2Ob;e+ti%e o" the Re'ort
.he o!2ecti e of the report is categoriAed into t1o parts/ one is !oard o!2ecti es and the other is specific o!2ecti es. .hese are gi en !elo1#

0.2.0 Broad Ob;e+ti%es
 .o re ie1 the importance of 0M5s and itFs financing.  .o re ie1 the 0M5 !an"ing o f Bangladesh.

0.2.1 S'e+i"i+ Ob;e+ti%es
 .o re ie1 the importance o f 0M5s in the economy and the current status of 0M5

financing in Bangladesh.
 .o re ie1 the present role of regulatory author it lies in 0M5 financing and

de elopment.
 .o re ie1 BRA4 !an"s contri!ution in 0M5 Ban"ing.  .o conduct a comparati e analysis of 0M5 !an"ing in BRA4 Ban" and four other

pri ate commercial !an"s.

0.3 Methodolog o" the Re'ort
.o conduct a research 1or" it is ery important to o!tain sufficient olume of data. Inter ie1s 1ere ta"en a!out 0M5 !an"ing in selected !an"s through a questionnaire. .he report 1as completed !y collecting !oth primary and secondary data through the follo1ing sources# Primary 0ource
 Inter ie1ing selected !an"sF 0M5 di isions.  Direct con ersation 1ith the BRA4 Ban" 6td 0M5 staffs.  ( days training program of BRA4 Ban" 6td.  Personal o!ser ation o er the internship period.

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0econdary 0ource
 9e!sites of selected !an"s.  Annual Reports of selected !an"s.  0M5 product !rochures of selected !an"s.  Eournals/ articles/ !oo"s/ BB6 ne1sletters and research papers.

0.4 Limitations o" the Re'ort
0ince this report is only for academic purpose/ there 1ere some limitations in this study such as the follo1ings#


Se+ondar

In"ormation# .here 1as a lac" of proper secondary information for

BRA4 Ban" 6td. and its products. Annual reports/ policy guidelines/ 1e!site and other related documents do not co er full and sufficient information.


Time Limitation# 9ithin such a short period of time/ it 1as not possi!le for me to study e erything a!out BRA4 Ban"/ 4DB Road Branch/ ?arsingdi. Con"identialit # In order to guard the secrecy of the !an"/ BRA4Ban" 6td. is not interested to disclose some certain information required for this report. Certaint # .here 1as some sort of differences !et1een the data collected from different sources of information of the same topic. La+k o" Co7o'eration# As the !an" officials are so much !usy that it difficult for them to co-operate 1ith me/ 1hich is also a constraint for this report. $nderstanding# .here 1ere some misunderstandings !et1een me and the !an" officials 1hile searching the some required information. E-'erien+e# .here 1as lac" of e3perience in collecting information/ doing analysis and ta"ing assessment of the related topics. Co1e er as time passed !y many of these limitations faded











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1.0 OR<ANI=ATION PRO*ILE
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For graduate students Internship is a ma2or requirement. Internship pro ides an unique opportunity for students to implement their "no1ledge and impro e their s"ill 1hile 1or"ing in a different en ironment. As a student of !usiness school from the ery !eginning/ I ha e al1ays !een aspiring to 1or" in a financial institution/ especially in !an"ing sector. In a de eloping country li"e Bangladesh/ for rapid progression in economic gro1th role of !an"ing sector is ery crucial. BRA4 !an"/ 1idely regarded as one of the fastest gro1ing !an"s in Bangladesh/ started its 2ourney 1ith an uncon entional ie1 of helping potential entrepreneurs in the country/ to strengthen national economy. .he core operation of the !an" 0M5 !an"ing has gone !eyond the entire con entional role of economic solution. Along 1ith its core operation of 0M5 Ban"ing BRA4 Ban" is offering almost all the !an"ing ser ices to the nation.

1.1 BRAC Bank Limited
BRA4 Ban" 6imited/ the youngest commercial !an" in Bangladesh !an"ing industry 1as founded in Euly %@/ $%%'/ !y Bangladesh Rural Ad ance committee =BRA4>/ one of the !iggest de elopment finance institutions founded !y 0ir FaAle Casan A!ed in '&I$. .hough it is an affiliation of BRA4/ it is partially o1ned !y International Finance 4orporation =IF4> and 0hore 4ap International. In its inception/ it 1as esta!lished 1ith an endea or to facilitate small and medium enterprises =0M5s> in the country. But later on it started pro iding ser ices for retail and corporate segment along 1ith the non-resident Bangladeshis. It has !een reported to !e one of the top !an"s processing remittance in1ard to the country. BRA4 Ban" 6td. is the leading 0M5 focused !an" in Bangladesh. After !eing esta!lished in $%%'/ BRA4 Ban" has pioneered the small and medium enterprise =0M5> !an"ing 1ithin a ery short period of time. It is the largest 0M5 !an" in the country in terms of num!er and co erage of 0M5 distri!ution channels/ amount of loan dis!ursements/ num!er of clients and so forth. BRA4 Ban" has gradually gro1n in to a large financial institution ha ing '*@ distri!ution outlets in total among 1hich +@ are !ranches/ @+ are 0M5 Krishi !ranches/ $$ are 0M5 0ales D 0er ice 4enter and '$ are Aapon 0omoy. .he num!er of 0M5 unit office is (&& at this moment 1hich are spread all o er the country. BRA4 Ban" o1ns a strong A.M net1or" of ('%J A.Ms across the country. All its net1or" distri!utions/ outlets/ !usiness segments are 1or"ing relentlessly led !y s"illed and enthusiastic 1or" force to e3tend organiAationFs gro1th. BRA4 !an" has !een 1or"ing diligently to reach !an"ing facilities to the furthest corner of Bangladesh/ to facilitate small-medium entrepreneur !y pro iding capital !ase and to aid the money transferring process !y non- resident Bangladeshi li ing a!road. .his organiAation has !een coming up 1ith ne1 products and is planning to roll in more products to ser e 1ide arrays of customers.

1.2 Business !i%isions o" BRAC Bank Limited
BRA4 Ban" 6imited consists of three ma2or !usiness di isions namelyBBL
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'. Retail Ban"ing Di ision $. 4orporate Ban"ing Di ision (. 0mall and Medium 5nterprise =0M5>

1.2.0 Retail Banking !i%ision
Retail Di ision offers a 1ide array of lucrati e and competiti e !an"ing products to the indi idual customers of the !an". It offers different types of term deposit scheme and attracti e 0.D D 0a ings deposit schemes gi ing interest on daily !alance. Retail Ban"ing Di ision has the follo1ing departments#
• •

Branch Ban"ing Alternati e Deli ery 4hannels =A.M/ Apon 0omoy/ 4ash deposit machine =4DM>/ Phone !an"ing/ e-statement> 4ards Department Retail Ris" Products and Mar"eting Galue 4enters

• • • •

4urrently BRA4 Ban" has re-organiAed its retail !usiness according to customer profile. .his segmentation has !een done to deli er more standardiAed ser ices and reduce operating costs as 1ell. .he ne1 segments are as follo1s-

1.2.1 Premium Banking
Huest 1ho maintains at least BD. *% laces =) month a erage> is called premium customers. .hey are highly prioritiAed. .hey also en2oy different gift and discount through BRA4 Ban". 4urrently BRA4 Ban" has around '%%% premium customers.

1.2.1 Su'reme Banking
Huests 1ho maintain a !alance !et1een BD. '% laces to !elo1 *% laces =) month a erage> are treated as supreme clients. .hey en2oy separate ser ice !ooth and cash deposit !ooth in the !ranch along 1ith many other ser ices.

1.2.3 E-+el Banking
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4lient 1ho maintains a !alance !et1een BD. *% thousand to !elo1 '% laces in an a erage of ) months are called e3cel group of guest.

1.2.4 Eas Banking# .hese are the general customers 1ho do day to day and traditional
!an"ing 1ith the !an". .hey only require a minimum !alance in the account =upto BD. *% thousand>.

1.2.. Cor'orate Banking !i%ision
4orporate Di ision pro ides full range of commercial !an"ing products and ser ices to any potential corporate clients including multinationals/ large or medium local corporate/ ?H,s/ institutional !odies. .he 4orporate Ban"ing Di ision has a centraliAed structure through on-line !an"ing system. Any credit facility is processed at the 4orporate Ban"ing Di ision/ Cead office. After sanctioning of the facility/ the limit is put on line and the customer can en2oy the facility from any of the BRA4 Ban" !ranches. 0trict adherence to internal control guidelines and other legal and statutory compliance are follo1ed. .he 4redit appro al process in ol es separate 4redit Di ision/ the Managing Director and finally the Board. ,ther departments li"e Foreign .rade/ .reasury/ and 4redit Administration etc. play the support role for a comprehensi e range of ser ice to the 4orporate Ban"ing Di ision. .reasury Di ision is one of the ma2or di isions of BRA4 Ban". .reasury Di ision deals 1ith money mar"et. All treasury related products are processed in conformity 1ith the Ban"Ks ,perational/ .rading/ Money mar"et/ , ernight/ .erm placing/ Deal settlement/ 4ommercial position "eeping/ .reasury/ 4redit/ Finance D other applica!le policies. .reasury ,perations calculates in estment figure/ prepares the auction application/ for1ards the application to Bangladesh Ban" for Bid and .reasury ,perations maintains and reconciles all accounts 1ith foreign and local !an"s.

1.2.8 Small and Medium Enter'rise >SME?
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0M5 is an additional and specialiAed horiAon of the !an" 1hich ser es the !an"Fs special focus on promoting !road !ased participation !y catering to the small and medium entrepreneur. .he net1or" of 0M5 has already !een esta!lished throughout Bangladesh. .he 0M5 mar"et in Bangladesh is large. BRA4 Ban" is the a!solute mar"et leader in the num!er of loans gi en to small D medium enterprises throughout Bangladesh.

1.3 Organi@ational Stru+ture
Board of Directors is the sole authority to ta"e decision a!out the affairs of the !usiness. ?o1 there are + directors including the 4hairman in the !oard of the !an". .he !oard of directors holds meetings on a regular !asis. .he current !oard of directors and management committee are gi en in the follo1ing ta!le# Board o" !ire+tors# Sir *a@le /asan Abed Chairman Mr. Shib Nara an Aair !ire+tor !r. /a"i@ <.A. SiddiBi !ire+tor Ms. Tamara /asan Abed !ire+tor Mr. Muhammad A. >Rumee? Ali !ire+tor Table# 0 Management Committee# Ms. Bahida Ispahani Director Ms. ?ihad Ka!ir Director =Independent> Mr. 0yed Mah!u!ur Rahman Managing Director and 45,

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1.4 (ision& Mission : Logo
1.4.0 (ision
7Building profita!le and socially responsi!le financial institution focused on Mar"et and Business 1ith Hro1th potential/ there!y assisting BRA4 and sta"eholders to !uild a 2ust/ enlightened/ healthy democratic and po erty free Bangladesh8.

1.4.1 Mission
Mission statement reflects 1hat organiAation is doing currently to achie e its ision. BRA4 !an" has num!er of missions/ 1hich are ery specific in their 1ay of achie ing the ision.
• • •

0ustained gro1th in 0mall D Medium 5nterprise sector. 4ontinuous lo1-cost deposit Hro1th 1ith controlled gro1th in retail assets. 4orporate Assets to !e funded through self-lia!ility mo!iliAation. Hro1th in Assets through syndications and in estment in faster gro1ing sectors. 4ontinuous endea or to increase non-funded income. Keep our de!t charges at $L to maintain a steady profita!le gro1th. Achie e efficient synergies !et1een the !an"Fs !ranches/ 0M5 unit offices and BRA4 field offices for deli ery of remittance and Ban"Fs other products and ser ices. Manage arious lines of !usiness in a full controlled en ironment 1ith no

• • •



compromise on ser ice quality.

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1.4.2 Core (alues
BRA4 Ban"Fs 0trength emanates from their o1ner - BRA4. BRA4 Ban" is determined to 1or" !y holding the follo1ing alues and 1ith the guidance of BRA4.
• • •

Galue the fact that one is a mem!er of the BRA4 family 4reating an honest/ open and ena!ling en ironment Ca e a strong customer focus and !uild relationships !ased on integrity/ superior ser ice and mutual !enefit 0tri e for profit D sound gro1th 9or" as team to ser e the !est interest of our o1ners Relentless in pursuit of !usiness inno ation and impro ement Galue and respect people and ma"e decisions !ased on merit Base recognition and re1ard on performance Responsi!le/ trust1orthy and la1-a!iding in all that 1e do.

• • • • • •

1.4.3 Logo
.he logo of BRA4 Ban" has !een prepared "eeping in mind the goal of the organiAation. .he square structure of the logo means solid and strong. .he Holden 4olor in the lo1er portion of the logo means that MHolden Bangladesh D her fertile landF. .he Blue color in the upper portion means Mthe s"y 1ith enormous D unlimited opportunityF. .he 1hite colored cur e means MHro1th and ProgressF. 9hite circles in the !lue color mean the flashing sun that gi es light to e ery1here.

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1.. Share /olding Stru+ture : Subsidiaries o" BRAC Bank Limited
1...0 Share /olding Stru+ture
.he shareholding structure of BRA4 Ban" 6imited consists of different group 1ith institutional shareholdings !y BRA4/ International Finance 4orporation =IF4>/ 0hore cap International and general pu!lic is also included through IP,. .he present shareholder structure of BRA4 Ban" 6td is as follo1s-

1...1 Subsidiaries o" BRAC Bank Limited
BRA4 Ban" has different su!sidiaries to support its !an"ing system. All those su!sidiaries are related 1ith financial acti ities and ser ing to reach a !road num!er of customers. .he su!sidiaries are as follo1s-

BRA4 5P6 0toc" Bro"erage 6imited is one of the leading stoc" !ro"ers in the country. BRA4 5P6 0toc" Bro"erage 6imited has mem!ership at !oth of the countryKs stoc" e3changesN the Dha"a 0toc" 53change =D05> and the 4hittagong 0toc" 53change =405>.

BRA4 5P6 In estment 6imited deli ers a 1hole range of In estment Ban"ing ser ices including traditional merchant !an"ing acti ities such as Issue Management/ 4orporate Ad isory/ 4orporate Finance/ Under1riting and Portfolio Management.
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BRA4 0aa2an 53change 6imited mainly pro ides remittance ser ices to the large Bangladeshi 4ommunities li ing in UK. Apart from its remittance ser ices the 4ompany also caters to the in estment needs of the ?RBs through its parent organiAation BRA4 Ban".

BKash 6imited =a su!sidiary of BRA4 Ban"> operates 1ith an o!2ecti e to ensure access to a !roader range of financial ser ices =mo!ile fund transfer facility> for the people of Bangladesh. It has a special focus to ser e the lo1 income masses of the country to achie e !roader financial inclusion !y pro iding ser ices that are con enient/ afforda!le and relia!le.

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3.1 Internship Opportunity in Research & Development Division
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Research and de elopment is of great importance in !usiness as the le el of competition/ production processes and methods are rapidly increasing. It helps a company to "eep an eagle eye on competitors and customers in order to "eep pace 1ith modern trends and analyAe the needs/ demands and desires of their customers. It is a system dri en !y mar"eting 1hich puts customer needs first/ and only produces goods that are "no1n to sell and create customer satisfaction. In an industry li"e !an"s that is changing fast/ firms must continually re ise their design and range of products. .his is necessary due to continuous technology change and de elopment as 1ell as other competitors and the changing preference of customers. .he Research and De elopment =RDD> 1ing of BRA4 Ban" 1as esta!lished in $%'% 1ith a ie1 to equip the Ban" 1ith constant inno ation and re-engineering in products and ser ices 1hich 1ould help to sustain the leading mar"et position in the industry. .a"ing the right !usiness decision at the right time in the right 1ay can result in a !etter competiti e edge o er the competitors. .hus research findings 1ill helps Management to pin point the fact and figures that 1ill ensure the highest Degree of 4orrectness of the decision in the shortest possi!le time .RDD is considered to !e an in estment for the Ban"/ as opposed to an e3pense and BRA4 Ban" 6td "no1s its alue !etter. .he Research and De elopment di ision of BRA4 Ban" mainly 1or"s 1ith the Follo1ing#
 Product De elopment  4onsumers Insight  Decision 0upport 0ystem

2.0.0 M E-'erien+e
I 1as luc"y to get opportunity to 1or" 1ith Research D De elopment di ision of BRA4 Ban" 6td. 1hich allo1ed me to learn different inno ati e strategies and face the real 1orld. .he challenges has created me a strong person and helped me in impro ing my s"ills. Moreo er I got opportunity of conducting a ( day .raining 1hich no !an" offers to its interns. .he training 1as ery interesting and informati e. .he first day session included presentation and discussion of o er ie1 of BRA4 Ban" and different di isions of the !an". .hese presentations 1ere done !y senior employees of the !an" 1ho 1ere ery smart and friendly. .he second day session included one day attachment in a !ranch under retail
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!an"ing. .he employees there 1ere ery cooperati e and informati e therefore the day ended 1ith gathering !asic and direct "no1ledge a!out !ranch operations. .he third day session included half day attachment under 0M5 !ranch 1hich 1ent on learning more a!out real 0M5 operations. .his last day also included assessment a!out the learning from this three day training 1hich 1ere ta"en through 5-learning assessment and 1ritten test. Upon successfully completing the training and getting the standard mar"s 1ill ma"e us eligi!le for ha ing a certificate at the end of the internship.

3.1.2 Projects that I was involved with
2.0.1.0 Mobile Credit Card .his pro2ect represents a ery inno ati e idea though I felt that there 1ere some faults too 1hich 1as needed to !e corrected to ma"e it a successful product. .he target group 1as people earning not more than ."*%%%-."'*%%% 1hich means it focuses on people 1ho cannot afford a credit card. .his 1as a field sur ey 1here 1e had to isit numerous of organiAations 1here a representati e of the organiAation 1as inter ie1ed and some target group of the organiAation 1as also inter ie1ed. I got the opportunity to isit !ig organiAations li"e PRID5/ .RA?04,M Foods/ Eaago Foundation/ URMI Harments/ Prestige Bengal/ Kohinoor 4hemicals and many others. I got to "no1 a!out the organiAations CR policies and a chance to create net1or"s. Most of the organiAations pro ided positi e response and some sho1ed negati e attitude to1ards the !an" or the product. .his pro2ect 1ent on for 1ee"s till 1e isited more than '@ organiAations and completes a sample of +% responses.

2.0.1.1 SME Em'lo ment <eneration
.his pro2ect made me realiAe that BRA4 Ban" 6td spend huge amount of money in Research D De elopment. .he sample siAe of this pro2ect 1as +%% 1hich 1ere randomly ta"en in I di isions from +% unit offices 1here the !an" ser es 0M5s. .he responses 1ere conducted !y agents of BRA4 Ban" 6td 1ho then mailed the responses through posting and emails. .hrough this pro2ect/ I understood a!out types of 0M5s/ 0M5 siAe/ 0M5 source of funds/
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0M5 employment/ and perspecti es of the respondents. I 1as not responsi!le of conducting the responses !ut my in ol ement in data entry and analysis made me feel a part of it. I found out that ma3imum percentage of respondents agree that BB6‟s loan has created impact in 0M5 employment generation !ut in e idence ery fe1 respondents themsel es had hired more employees. ,n the other hand/ I found out that the loan has created !usiness gro1th in terms of re enue and profit for many 0M5s. Many respondents had not only ta"en loan from BB6 !ut also from other organiAations li"e Hrameen Ban"/ BRA4 ?H,/ Progoti Ban"/ Krishi !an" etc. .his detail gi es an idea that 0M5s that too" loan for more than once might had !een a!le to e3pand !usiness 1ith positi e results. Moreo er 1hene er I had tal"ed 1ith 0M5 centers/ they had said that it is hard to generate employment if someone ta"es loan for the first time as many 0M5s use the loan in increasing asset or paying lia!ilities. .he 0M5s do not generally thin" a!out increasing employment till it can increase profit to @%-*%L. .his information had made me clear a!out the state of 0M5s. 2.0.1.2 M ster sho''ing .his pro2ect is a ne er ending one as the o!2ecti e of the mystery shopping is to trac" and assess ser ice standards of selected !ranches of the BRA4 Ban" 6td. .his e3perience 1as a ery interesting one and it made me understand that for any !usiness it is important to sustain relationship 1ith customers. BRA4 Ban" 6td alues their customers for 1hich they chec" the ser ice standard of their employees from time to time. .he !an" spend huge amount of money in this sector. Agents are hired 1ho act as customers and chec" employees‟ ser ice standard and attitude to1ards customers. BRA4 Ban" 6td has set of rules for their employees 1hom they strictly need to follo1 such as 1earing name plate/ greet the customers/ pro ide adequate information etc. .herefore the agents "eep record of the !ranches performance in terms of customer satisfaction/ 1or" en ironment. My responsi!ility 1as to cross chec" the agentsN to see 1hether they are doing their 1or" properly or not/ coming on right time or not/ pro iding right information or not etc. therefore I had to isit se eral !ranches of the !an" and o!ser e the ser ice quality of the employees and the 2o! part of the agents. I got to see !oth positi e and negati e attitudes of the !an"Fs employees.

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2.0.1.3 Other a+ti%ities I had to collect data from the Bangladesh Ban" 1e!site to ma"e analysis on the financial mar"et outloo" and BRA4 Ban"Fs 4ontri!ution in the matter. .his acti ity related 1ith internet and Microsoft 53cel. I had to do data entries of different pro2ect responses using Microsoft Access and also create coding manuals for analysis of the data. .he three month e3perience in this di ision has made me learn a lot li"e ho1 to persuade people/ ho1 to !e tric"y/ ha ing patience/ !eing courteous and using different Microsoft tools effecti ely. All this 1ould !e ery helpful in my near future.

2.1 Obser%ation
 0trong internal control of BRA4 Ban". 5 erything is cross-chec"ed/ employees are

chec"ed 1hether they are pro iding standard ser ice or not. Agents are chec"ed 1hether they are doing their 1or" properly or not.
 5fficient Information .echnology di ision of BRA4 Ban". .hey systematically

chec"s if there is any illegal soft1areFs installed in any computer and then they ta"e action. .hey e en "eep record of 1hich computer has tried to enter to restricted 1e!sites.
 BRA4 Ban" 6td ma"es sure that its employees are getting good facilities. BRA4

Ban" 6td has a child day care centre named O4RP4C5‟ 1ithin the premises/ a canteen containing reasona!le foods/ a medical centre/ a li!rary/ prayer rooms and many other facilities. .he corporate culture of BRA4 Ban" limited the employees can only lea e the office after their !oss lea es.
 .he 5n ironment of BRA4 Ban" is ery friendly and people addressed their seniors

as 7Bhai8 and 7Apa8.
 All the employees here ma"e sure that papers are not getting 1astedN used papers that

ha e other side !lan" are utiliAed. .his refers that they are ta"ing green !an"ing initiati es.

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.1 Introduction o! "#$s
0mall and medium enterprises are referred to as the Omissing middle‟/ !ecause its siAe is neither small enough for microcredit from microfinance institutions nor !ig enough to !e considered ia!le to finance in the formal financial sector. .herefore In most of the de eloping countries/ including Bangladesh/ lac" of adequate access to finance is considered one of the ma2or constraints to the gro1th of the 0M5 sector. 0mall DMedium 5nterprises are important to almost all economies in the 1orld/ especially to the de eloping countries as they face ma2or employment and income distri!ution challenges. .here are a!out )% la"h 0M5s and microenterprises in Bangladesh/ according to Asian De elopment Ban". In recent times/ small and medium 5nterprises =0M5s> ha e come into the forefront of de elopment agenda due to the recognition of their contri!ution in fostering gro1th/ sustaining glo!al economic reco ery/ generating employment and reducing po erty.

3.0.0 !e"inition o" SME >Small and Medium Enter'rises?
.he definition of 0M5s aries from country to country and sometimes from authority to authority. 4ertain countries define small and medium enterprises through the siAe of their 1or"force only. But in Bangladesh/ li"e many other countries/ 0M5 s are defined through the num!er of 1or"ers andQor fi3ed assets =e3cluding land and !uilding>. Bangladesh Ban" has reset the definitions of small and medium enterprises =0M5> as per the ?ational Industrial Policy ,rder $%'%. According to the latest circular of Bangladesh Ban" =Date R $%Q%)Q$%''>/ the definition of 0mall D Medium 5nterprise sector is gi en !elo1# Categor Attributes under the Medium Enter'rise +ategories 0er ice 4oncern .rading 4oncern Manufacturing Mi+ro Enter'rise
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Total Assets >at +ost?

AndCor total number o" em'lo ees *% to '%% *% to '%% '%% to $*% '% or less '% or less
$+

.". ' 4rore to '* 4rores .". ' 4rore to '* 4rores A!o e .". '% 4rores to (% crores .". * lac or less .". * lac or less
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Manufacturing Cottage Enter'rise 4oncern 0er ice 4oncern .rading 4oncern Manufacturing Domen Enter'rises .". * lac to .". *% lac .". * lac or less .". * lac or less .". * lac to .". *% lac '% or $@ less '% or less '% or less '% or $@ less

4oncern ,1ner of at least *' percent of a partnership or a pri ate company registered under 2oint stoc" companies. Sour+e# bdne,s.+om& Eune 1500

3.0.1 E%olution o" SME "inan+ing im'ortan+e
Financing is the foremost o!stacle for 0M5s follo1ed !y ta3es/ regulation and inflation.0M5 enterprises in Bangladesh essentially require financing for three purposes for start-up/ for 1or"ing capital/ and for fi3ed capital. Una aila!ility of 1or"ing capital from formal financial institutions has !een recogniAed as one of the ma2or complaints of 0M5s in Bangladesh =Meagher/ '&&+>. Cigh percentage of 0M5 entures in Bangladesh 1as depended on personal sa ings/ family or other informal credit sources. In recognition of this failure of the financial mar"et/ attempts had !een ta"en !y fe1 of the more esta!lished MFIs =Microfinance Institutions> 1ho had scaled up to tap this mar"et. A0A 1as one of the first ?H,s to introduce its 0mall 5ntrepreneur De elopment Program 1ith a loan limit of .a"a (%/%%% =S+I%> in '&&$. Proshi"a commenced its 0mall 5conomic 5nterprise De elopment Program in '&&) 1ith loans as large as .a"a @%%/%%% =S)/I%%>. ,ther MFIs such as Buro .angail and .M00 also scaled up their microcredit operations. BRA4 scaled up chiefly to cater to the needs of its micro-finance graduates. BRA4‟s credit programs include Unnoti =loans siAe S'))RS+((> and M56A =loans siAe S*+%RS*/+%%> along 1ith the standard microfinance =loans siAe S'IR S(@*>. Co1e er/ these scaling-ups !y MFIs 1ere not large enough to meet the fund requirements of the 0M5s. 0ome specialiAed financial organiAations such as Basic Ban" also started pro iding financial ser ices to the 0M5 sector. 0ince the 0M5 segment of the mar"et 1as relati ely underser ed/ a num!er of formal financial institutions 1ere gradually scaling do1n and designing financial products for them.
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.he Bangladesh Ban" has then started ta"ing a num!er of policy measures to increase 0M5 access to institutional finance. In Ean $%%*/ Bangladesh Ban" had introduced S') million refinancing scheme to promote lending to 0M5s !y !an"s and financial institutions and made agreement 1ith si3 !an"s and eight financial institutions. As a result a!out $/%%% 0M5s ha e !enefited from the scheme up to the end of Eanuary 0mall and Medium 5nterprise 0ector De elopment Programmed/ a S(% million pro2ect of Ho ernment of Bangladesh and ADB/ is also in progress. Cistorically/ the selection of the siAe group and acti ities of 5nterprise Financing has !een decided in Bangladesh in an ar!itrary manner. In all earlier Fi e :ear Plans the emphasis 1as limited to small and cottage industries =04I>. PR0 P-I/ initiated in $%%*/ replaced the e3pression small and cottage industry =04I> !y small and medium enterprises =0M5>/ !ut did not pro ide any e3planation 1hich raised many pro!lems in understanding this concept. .he lac" of o!2ecti e !asis in determining the co erage of 0M5/ policy measures aimed at promoting 0M5s ha e often yielded distorted results. .he e3tension of the pur ie1 of 0M5 to include non-manufacturing acti ities has led to large num!er of trading enterprises of specified siAe to claim policy support earmar"ed for 0M5s. .herefore/ an o er1helming proportion of credit pro ided to 0M5s under Bangladesh Ban"Ks refinance scheme has gone to the trading sector. .here 1as confusion amongst the policy ma"ers regarding 1hether micro enterprise =cottage industries and enterprises 1ith less than '% 1or"ers> should !e included in the co erage. Finally/ in the Po erty Reduction 0trategy Paper =PR0P>-II/ 1hich is currently in force/ de elopment of 0M5 has !een identified as a critical element of the 0trategic Bloc" for propoor gro1th. 0M5 is li"ely to !e an important component of inclusi e gro1th strategy underlying the upcoming 0i3th Fi e-:ear Plan =$%''-$%'*>.

3.0.2 Initiati%es taken "or SME *inan+ing
.he success of microfinance for a num!er of decades has smooth the 1ay for more formaliAed 0M5 lending in Bangladesh. .he interest of the go ernment and regulatory !odies here is also admira!le. 9ith esta!lishment of the 0M5 Foundation and incorporation of the 0M5 credit policy and programs !y Bangladesh Ban"/ a ne1 era has !een en isioned. It 1as
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not until $%'% that the go ernment and policyma"ers recogniAed the importance of pro iding e3tensi e credit facilities to small and medium sector entrepreneurs to promote arious initiati es/ especially start-up enterprises as 1ell as ones loo"ing to scale up.

Regulator bodies : its 'oli+
A special programmed department has !een esta!lished to promote the 0M5 sector such as 0M5 Foundation. 0u!sequently/ the Department of Ban"ing Inspection-( 1as also constituted for onsite super ision of 0M5-sector credit. 0M5 credit policy and programmed 1as put in place requiring the !an"sQnon-!an" financial institutions to commit adequate fund prioritiAing the manufacturing and ser ice sector and to ensure increased access of small and 1omen enterprises to institutional finance. Tuarterly meetings are arranged at the Bangladesh Ban" on a regular !asis to re ie1 the performance status and correcti e measures/ if any/ ta"en !y the participating !an"s and non!an" financial institutions under the 0M5 credit policy and programmed.

Re"inan+ing s+heme
.he Bangladesh Ban" has come up 1ith a siAea!le amount of re ol ing refinance fund for the !an"s and non-!an" financial institutions primarily using e3ternal resources =e.g. the International De elopment Association/ the Asian De elopment Ban">. .his is a 1in-1in solution. It facilitates pro-poor gro1th and not adding to the reser e money. 0o this does not fuel inflation. .he total amount of re ol ing refinance 1indo1 1as ." '/)'+ crore =Daily 0tar/ ,cto!er $%''>. .he central !an" in assistance from Eapan International 4ooperation Agency has recently started a ." @'* crore refinancing scheme =?e1 Age/ ,cto!er $%'$>. .he o!2ecti e of the refinance 1indo1 is not to fully support the 0M5 sector lending requirements. 9e pro ide the refinance 1indo1 to moti ate and create a1areness of the !enefits of financing to this sector. Ban"s and non-!an" financial institutions should not fully depend on this refinance 1indo1 for their 0M5 portfolio. Although the ris" profile for 0M5 lending is said to !e a !it higher !ut in many countries including India and also many other Asian countries !an"s ha e come up 1ith lending models that pro ed to !e 1or"a!le and also profita!le. .hrough this 1indo1 so far a total of ." '/&(' crore has !een refinanced to $'/'&' entrepreneurs.
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Broadening SME "inan+e se+tors BB and 0M5 Foundation are trying to pro ide integrated support to 1omen entrepreneurs in pre-in estment consultation/ planning and implementation of pro2ects. In $%'%/ '&/'&@ 1oman entrepreneurs 1ere pro ided 1ith 0M5 loans 1orth .". $/'%( crore. It has !een focusing on e3panding facilities in rural areas and gi ing loan assistance to traditional industries li"e handicraft/ 1ea ing/ pottery and !outique etc. .he loans 1ill !e mainly gi en to more than )% categories of operations in the 0M5 sector such as light engineering/ handicraft/ flo1er/ fish processing/ handloom/ rice -mill/ Eamdani/ Ra2shahi sil" etc. Promoting SME *inan+e Road sho1/ trade fairs/ 1or"shops and other initiati es 1ere ta"en to ma"e the !an"ers/ entrepreneurs and other sta"eholders a1 are of the need for easy access of 0M5s to institutional finance. BB go ernor formally handed o er sanction letters for loans 1orth .". @.'& crore to $( entrepreneurs from across the country. ?ineteen !an"s pro ided the loans.0M5 fairs in rural areas and include poultry/ fishing and flo1er farming under the 0M5 category has !een planned.
Interest Rate : In"lation

.he interest rate had already !een !rought do1n to support the countryKs entrepreneurs !ut no1 the go ernment considers a further cut in !an" interest rates/ especially for small and medium enterprises =0M5s> to help the sector gro1 faster. Bangladesh Ban" has emphasis on cluster and area-approach methods for dis!ursement of such loans 1ith the aim of easing inflationary pressures on the economy through creation of 2o!s across the country.

3.0.3 Contribution o" SMEs in Bangladesh
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Positi%e im'a+ts o" SMEs
 Em'lo ment <eneration  Enhan+ed Li%ing Standard  <!P <ro,th  Po%ert Redu+tion  Redu+tion in $rban Migration  Creation o" Entre'reneurshi'  Domen em'o,erment  Creation o" Market "or  Indigenous <rou'  <ro,th in International Business  Inno%ation

In Bangladesh/ po erty alle iation through economic gro1th/ as 1ell as employment generation on mass scale is hea ily dependent on the de elopment and e3pansion of 0M5s. 5mpirical studies find that the share of 0M5s in HDP is significantly higher in high income countries. A cross country study =Ayyagarieal/ $%%(> sho1s that 0M5s account for o er *' percent of HDP and *I percent of employment in high income countries 1hile the corresponding figures for lo1 income countries are ') and '+ percent. .his re eals the importance of 0M5 in gro1th and employment generation According to the Bangladesh 5conomic Re ie1 $%%&/ around ) percent of the countryKs S&% !illion economy comes from 0M5s. De eloping countries li"e 4hina are getting $% to (% per cent of their HDP from 0M5s 1hereas this sector in Bangladesh is contri!uting $* per cent to HDP 1ith )% percent of employment generation. As of recent research =Daily 0tar/ $%''>/ the 0M5s account for a!out @* percent of manufacturing alue addition/ +% percent of industrial employment/ &% percent of total industrial units and a!out $* percent of total la!or force. .heir total contri!ution to e3port earnings ranges from I* percent to +% percent/ according to a recent economic census. .he 0M5s ma"e up I* percent of the domestic economy. Bangladesh is a de eloping nation/ rich in human resources 1here 1omen constitute slightly less than half the population. .he ma2ority of them are underpri ileged/ under nourished/ illiterate and poor. Moreo er/ there are not enough employment opportunities for 1omen. .herefore/ economic acti ities/ through self-employment ha e !ecome essential for potential

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1or"ing 1omen. As a matter of fact/ 1omen entrepreneurship or 71omen in !usiness8 has gained importance and acts as a ery recent phenomenon in Bangladesh. 0M5s can play a significant role in esta!lishing gender equality and !ridge the 1idening the gap !et1een rural and ur!an income. It is said that introduction of 0M5 to rural areas 1ould result in a large-scale de elopment that 1ould put the countryFs economy in a high gro1th tra2ectory.

3.1 Current Status o" SME *inan+ing
0M5 has !een considered as the thrust sector in the economic de elopment of the country and su!stantial increase in 0M5 and Retail 4redit portfolios along 1ith commercial/ corporate and institutional lending/ 1ould lead the !an"s to its higher tra2ectory of gro1th/ minimiAing the ris" of lending through portfolio di ersification. As such/ most of the !an"s ha e ta"en up aggressi e mar"eting policy to augment their e3posure in 0M5 and Retail 4redit. Possible Sour+es o" *unds .here are huge num!ers of financial institutes of Bangladesh- ($ Pri ate Ban"s/ I ?ationaliAed Ban"s/ '% Foreign Ban"s/ (% ?BFIs and & 0pecialiAed Ban"s till no1.

Both micro-finance institutions and !an"s are !eginning to realiAe the potential of 0M5 mar"et and are designing ne1 financial products for it. 0ome !an"s and other financial institutions had !een pro iding loans to such enterprises for long/ though not inthe classification of 0M5 Financing. ?o1/ almost all !an"s and non-!an" financial institutions =?BFI> in the country are pro iding loans to the sector/ under different go ernmental schemes as 1ell as through their o1n product portfolios.
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SME *inan+ing Status o" 1505 =?e1 Age/ $%''> .he !an"s and non-!an" financial institutions had a self-fi3ed target of ." (+/+@*.** crore for dis!ursement in the 0M5 sector and the total actual dis!ursement stood at ." *(/*@(.&+ crore e3ceeding the target !y ." '@/)&+.@( crore or !y '(+ per cent.

.he total trading sector recei ed ." (*/%@%.*% crore 1hich is )) per cent of the total dis!ursement. .he total manufacturing sector recei ed ." '*/'@I.I@ crore or $+ percent. .he total ser ice sector recei ed ." (/(**.)+ crore or ) percent. .he small enterprises recei ed an amount of ." $(/%((.@* crore 1hich is @( percent of total dis!ursement against the set target of @% per cent. .his states that the needy and small entrepreneurs are getting loans. Moreo er the 1omen entrepreneurs gained access to finance increasingly in each successi e quarter in $%'% 1hich totaled to ." '/+%I.%$ crore or (.(+ per cent. .he total 0M5 outstanding increased to ." )&/*$).** crore only in Decem!er $%'% from ." *'/'@I.*+ crore in Decem!er $%%& indicates a strong reco ery performance during $%'%. SME *inan+ing Status o" 1500 =Financial 53press/ $%''> .he central !an" had set the target for dis!ursement of loans at o er .". )$* !illion for the small and medium enterprise =0M5> sector for the year $%'' 1hich is a )@.*) per cent increase o er that of the pre ious year.

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According to the a!o e chart/ the pri ate !an"s has pro ided 0M5 loan of )(.$$L 1here the target 1as I$.$@L. .he state o1ned !an"s co ered 0M5 loan of $*.)+L against the target of $'.*+L 1hich indicates an increase. .he ?on-!an"ing financial institution pro ided 0M5 loan of (.'%L against the target of (.)$ L. .he foreign commercial !an"s andQ or specialiAed !an"s had a target of $.*@L and it achie ed $.@%L. During the first half of $%''/ there 1as an increasing trend in the loan dis!ursement compared to the corresponding period of $%'%. Dis!ursement of 0M5 loan during this period 1as ." $)/')(.(( crore compared to ." $@/@*'.(( crore of the same period of $%'%. .herefore/ this sho1s a su!stantial rise of ." '/I'$ crore or I percent. .he manufacturing sector recorded a @ per cent gro1th 1ith a total amount ." I/++*.%* crore in the first half of $%'' compared to ." I/*&).@@ crore of Eanuary-Eune $%'%. .he small enterprises has recei ed good amount of loan during this period similar to that of $%'%.

3.2 BRAC Bank)s Contribution in SME Banking
BRA4 Ban" 1as set up 1ith the gro1ing need for capital mo!iliAation and the need for formal contracts for a 1ider range of clients of the country. 9hen it came to 0M5 financing/ instead of approaching the pro!lem !y scaling do1n its regular operations/ a separate program designed especially for 0M5 financing 1as launched !y BRA4 Ban" in $%%$. BRA4 Ban"Fs effort is noted in this regard for its complete focus on the credit needs of the
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small and medium enterprises. 0ince the initiation of 0M5 operations !y BRA4 Ban"/ it has !ecome the Ban"Fs largest and most profita!le enture. BRAC Bank)s (ision# Remain the leader in 0M5 !an"ing/ respected locally and glo!ally 1hile focusing on people/ profit/ and planet. Target Market# *isheries ManualCauto ri+e mill BoutiBues and 'arlors Restaurant !istributor o" *MC< 'rodu+tsCothers *ish ,holesaler *ood grain ,holesaler Dood 'ro+essingCsa, mills Trading o" gro+er item /ard,are Chemi+al 'rodu+ts Sanitar ,are !air "arm BRA4 Ban" 0M5 finances co ers a many non-traditional sectors - agriculture/ food processing/ light engineering/ plastic/ handicrafts/ poultry/ dairy/ fishery/ feed mill/ 1ood processing/ !outique D garments/ 1hich helps in !oosting rural economy and generating employment. Large tailoring business Dea%ing mills Baker Printing house *eed mill Poultr Ele+tri+al and ele+troni+ items Building materials Im'orted "oods Light ma+hiner And man more.......

3.2.0 /ighlights o" BRAC Bank)s SME Banking
 .he 0M5 di ision has captured ).(+L mar"et share 1ithin 0M5 Ban"ing arena of

Bangladesh and a!o e &L of the mar"et 1ithin Pri ate Ban"s of Bangladesh in $%'$ 1hereas the percentage of total mar"et share 1as *.+IL in $%''. =BRA4 Ban" 6td>
 In its '' years of operations/ it has dis!ursed ." $$/%%% crore loans to @ la"h 0M5

entrepreneurs across the country through **( customer touch points =0M5 Unit
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,ffices/ 0M5 0ales and 0er ice 4enters/ Krishi Branches/ and Branches>. =Daily 0tar/ Decem!er $%'$>
 BRA4 Ban" is the only !an" in the country to ha e a plan to dis!urse near a!out I%

percent of its loan portfolio to 0M5.
 BRA4 Ban"Ks 0M5 credit portfolio has crossed ." */%%% crore as of ?o em!er $%'$

for the first time/ up !y ." I'$ crore from the last yearKs dis!ursement. =Daily 0tar/ Decem!er $%'$.
 BD. @&/(%$ million 0M5 assets 1ere fuelled !y BD. ')/))& million 0M5 deposits

and deposit from other sources in $%'$=BB6 Annual Report/$%''>.
 BRA4 Ban"Fs 0M5 customers ha e increased their fi3ed asset !y $$( percent/ equity

capital !y '%& percent/ sales !y '(@ percent and profit !y &' percent in !y ?o em!er $%'$. =Daily 0tar/ Decem!er $%'$>.
 .he finance has created direct employment to '( la"h people in '' years 1here $ la"h

people got employed in $%'' alone. .he !an" also e3tended support to +/%%% 1omen entrepreneurs 1ith ." ()% crore loans till date.=Daily 0tar/ Decem!er $%'$>.
 BRA4 Ban" has achie ed )(L gro1th in 0M5 financing at the end of first si3 month

of $%'$.
 In $%''/ the deposit gro1th 1as of @IL and asset gro1th 1as of 'IL It made a

record !rea"ing dis!ursement of BD. @)(% Million in ,cto!er $%'' and the asset gre1 !y BD. $'$% Million in that month alone.=BB6 Annual Report/$%''>
 Portfolio at Ris" =PAR> has !een !rought do1n slightly in $%'' D $%'$.

3.2.1 Im'ortant *eatures o" BRAC Bank)s SME !i%ision E""e+ti%e CROs
.he unique feature of BRA4 Ban" is that it is the only !an" that approaches prospecti e clients/ 1hile other !an"s 1ait for them to apply for loans 1hen required. 0M5 units of BRA4 Ban" are located in all districts of the country. 5ach unit has t1o to fi e 4ustomer Relations ,fficers =4R,s>. .he role of 4R,s is instrumental in not only selecting and approaching clients/ !ut also in maintaining regular interaction 1ith each client/ monitoring the use of the loan and ensuring regular repayment. 5ach 4R, conducts informal sur eys of the area around his office to identify potential clients. Ce has a monthly target of dis!ursement/ 1hich is determined !y the Cead ,ffice in Dha"a/ !ased on the 4R,‟s years
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of e3perience and mar"et potential of the areas. .he geographical reach of each unit is restricted !y the 4R,‟s capacity to tra el to each enterpriseFs site of operation. ,nce a client ma"es an application for loan/ the 4R, sends a detailed report of the enterpriseFs financial status along 1ith the application to the Cead ,ffice for appro al. .he Cead ,ffice see"s clearance from the 4redit Information Bureau =4IB> and !ased on the ris" rating/ either appro es or re2ects the loan application. After appro al from the Cead ,ffice/ loan dis!ursement is carried out !et1een the Cead ,ffice and the clients directly through the ser ices of another assigned !an" =Pu!ali Ban"/ in most cases>. *inan+ing SMEs Dorking Ca'ital BRA4 Ban"Fs 0M5 loans in the form of 1or"ing capital are one of the useful and important factors for 0M5s. +& percent of the clients reported that they used their loan for increasing 1or"ing capital. 9or"ing capital has direct impact on the olume of sales and this ena!les to increase stoc"s and arieties and !enefit from a ailing mar"et opportunities. Many retailers e3pand !usiness !y starting up 1holesale transactions as it can !e facilitated due to the a aila!ility of cash. .his allo1s entrepreneurs to purchase ra1 materials and goods for sale at lo1er prices/ and also impro e their relations 1ith their !uyers !y offering sales on credit. As a result/ 53pansion of !usiness and cash purchasing increases 1hich facilitates future !usiness deals. A%ailabilit o" !e'osit Produ+ts .here are a num!er of 0M5 deposit products 1hich helps in !uilding sa ing ha!it among the small entrepreneurs 1hich is an important factor for their sur i al at time of difficulty.

3.2.2 BRAC Bank)s SME Banking A%ailabilit
0mall Business department of the di ision 1or"s through @%% unit offices all throughout the country. .he department is di ided into three regions-Dha"a/ 4hittagong and Ra2shahi. 5ach region comprises of ) to I territories. .erritories are di ided into Aones and Aones are further di ided into unit offices. 4urrently there are $% territories and '$) Aones. .he frontline

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employees of small !usiness are called 4ustomer Relations ,fficer =4R,>. More than '/'%% 4R,s are 1or"ing in the department as of Eune $%'$. Small Business department is organiAed into regions/ territories/ Aones/ and unit offices all throughout the country. Cistorically the department pro ided small loans to entrepreneurs. ?o1 it is fully equipped to pro ide all "inds of products and ser ices to small entrepreneurs. It is the !iggest department of the di ision in terms of asset/ deposit/ and nation1ide presence. Medium Business department is currently located in Dha"a and 4hittagong city to loo" after the mid siAe !orro1ers of 0M5 Ban"ing arena. It is loo"ed after !y 0enior Relationship ManagersQRelationship Managers.

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4.0 Anal sis o" Loan Re'a ment Beha%ior
0M5 loan is gi en to small or medium enterprises not for initiating the !usiness !ut for the purpose of 1or"ing capital management or for purchasing any long term asset. Any sound organiAation after three years of their starting of !usiness can apply for this loan. From the o!ser ation of (I 0M5 loan !orro1ersF personal and repayment information I find the follo1ing results# • A erage age of 0M5 !orro1ers is (& • A erage education of most of the 0M5 !orro1ers is 4lass IU or U.
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• • • • • • • • • • •

A erage 53perience =As a promoter of the !usiness> is '' years =along 1ith some e3treme alues A erage 53perience=As an employee of the same !usiness> is + years Monthly income and e3penditure of the 5ntrepreneur is around .K. (%%%% and .K. $(%%% respecti ely. A erage personal and family assets are around .K. '*%%%% and .K. $@%%%% respecti ely Almost all of the !orro1ers are **L retailer and @*L 1hole seller A erage num!er of employees they ha e is ( A erage Amount of loan ta"en !y them is around .K. (I&I$&.I A erage time period of loan they ta"e to repay is $) months A erage amount of loan suppose to !e paid is $I*('@.@I A erage amount of loan currently repaid is .K. $+)+@I.)$ per person. A erage amount of loan due for reco ery is .K. ))I&.)$ per person.

I ha e gathered + aria!les to analyAe the relationship of each aria!le 1ith reco ery rate. .hese aria!les are# • Age of the !orro1ers • 5ducation of the !orro1ers • 53perience of the !orro1ers related to their !usiness. • Amount of loan ta"en !y the !orro1ers • .erm of loan • Income of the !orro1ers • Personal Asset of the !orro1ers • ?ature of !usiness 9e can analyAe the relationship sequentially#

4.1 Relationshi' o" re+o%er rate ,ith age o" the borro,ers
.he relationship of reco ery rate 1ith the age of the customers can !e descri!ed from the follo1ing charts#

Table 9# Relationshi' o" re+o%er rate ,ith age o" the borro,ers

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*igure .# Re+o%er Rate Based on Age <rou' From the a!o e chart 1e can see that reco ery rate increases as the age of the !orro1ers increases. Cere the reco ery rate is lo1est at the age group of $'-$* for the lac"ing of e3perience and "no1ledge in the related !usiness. .hey canFt ma"e the proper use of funds. And thatFs 1hy their !usiness fails. At the age of ('-(* reco ery rate is '%%L. At that age group people li"e to !eha e professionally and control e erything 1ith strict discipline. .hey are highly concerned a!out their career 1hich !rings success to their !usiness. 0o at that time reco ery rate is the highest. Again at the age of *% and a!o e reco ery rate is also '%%L !ecause of their huge e3perience and success in !usiness.

4.2 Relationshi' o" re+o%er rate ,ith edu+ation o" the borro,ers
.he relationship of reco ery rate 1ith education of the customers can !e descri!ed from the follo1ing charts#

Table 6# Relationshi' o" re+o%er rate ,ith edu+ation o" the borro,ers

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*igure 8# Re+o%er Rate Based on Edu+ation From the a!o e chart 1e can see that 0mall and medium !usinesses are not highly affected 1ith the educational !ac"ground of the !orro1ers. .hatFs 1hy reco ery rate also is not much affected 1ith the education of the !orro1er. .here should !e some other aria!les affecting it as 1ell.

4.3 Relationshi' o" re+o%er rate ,ith e-'erien+e o" the borro,er

Table 05# Relationshi' o" re+o%er rate ,ith e-'erien+e o" the borro,ers

*igure 9# Re+o%er Rate Based on E-'erien+e
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From the a!o e graph 1e see that reco ery rate is highly affected 1ith the e3perience of the !orro1ers in the !usiness he is engaged 1ith. In fact/ it is all out true that a !usiness and its success is greatly affected !y the e3perience the entrepreneur ha e on the same line of !usiness. At the initial periods of the !usiness lac" of e3perience can cause the !usiness to fail 1hich ultimately results in the default of loan repayments. 0o BRA4 Ban" is al1ays concerned a!out the related e3perience of the entrepreneur. .hey donFt gi e 0M5 loan to any!ody ha ing no e3perience or for initiating any !usiness. And here also 1e see that reco ery rate is lo1est at the e3perience of ' to * years.

4.4 Relationshi' o" re+o%er rate ,ith amount o" loan taken

Table 00# Relationshi' o" re+o%er rate ,ith loan amount o" the borro,ers

*igure 6# Re+o%er Rate Based on Loan Amount From the a!o e chart 1e see that itFs tough to ma"e a relationship 1ith !oth the reco ery rate amount of loan ta"en !y the !orro1ers. But still it can !e said that loan amount ranging from $*%%%% to @%%%%% ha e a good reco ery rate on an a erage. .hatFs 1hy ma3imum amount or siAe of 0M5 loan the authority li"e to dis!urse is (%%%%%.
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4.. Relationshi' o" re+o%er rate ,ith term o" loan

Table 01# Relationshi' o" re+o%er rate ,ith term o" loan

*igure 05# Re+o%er Rate Based on Term o" Loan .he a!o e graph sho1s that/ as the loan duration increases the rate of reco ery decreases. .his may !e the inherent reason of 1hy the authority of BRA4 Ban" li"es to dis!urse loan at a shorter term of '+ to $@ months.

4.8 Relationshi' o" re+o%er rate ,ith in+ome o" the borro,er
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Table 02# Relationshi' o" re+o%er rate ,ith in+ome o" the borro,ers

*igure 00# Re+o%er Rate Based on In+ome In fact/ income of a !orro1er can !e a ital factor to repay his loan. And the a!o e graph is a replica of this truth. Cere 1e see that people 1ith higher income group li"e (%%%% to *%%%% or a!o e ha e the highest reco ery rate. 5ntrepreneurs ha ing a good s"ill/ "no1ledge and e3perience in !usiness can ma"e success in their !usiness 1hich ultimately increases their income as 1ell. 0o their reco ery rate is good than those group of people 1ho ha e lo1er income.

4.9 Relationshi' o" re+o%er rate ,ith the 'ersonal asset o" the borro,er
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Table 03# Relationshi' o" re+o%er rate ,ith 'ersonal asset o" the borro,ers

*igure 01# Re+o%er Rate Based on Personal Assets 5ntrepreneurs 1ho ha e sufficient personal assets and mortgage them for ta"ing the loan ha e the record of higher reco ery rate. .hey donFt ha e the tendency to ma"e a default in paying the installments. BRA4 Ban" li"es to pay 0M5 loans after collecting title deeds of those personal or family assets. People 1ho donFt ha e much personal asset must sho1 that they ha e sufficient family asset. Cere from the a!o e chart 1e see that entrepreneurs ha ing lo1est personal asset ha e the lo1est reco ery rate of &@L.

4.6 Relationshi' o" re+o%er rate ,ith the Nature o" business
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Table 04# Relationshi' o" re+o%er rate ,ith nature o" business o" the borro,ers

*igure 02# Re+o%er Rate Based on Nature o" Business From the a!o e chart 1e see that entrepreneurs ha ing retail !usiness ha e a less reco ery rate than the entrepreneurs ha ing 1hole sale !usiness. .his may happen !ecause 1hole sale !usiness transactions happen at a large scale. 0o they can con ert their stoc"s as 1ell as accounts recei a!les into cash ery quic"ly !efore the occurrence of any misfortune. ,n the other hand/ retail !usiness transactions happen at a small lot. 0o they cannot ma"e s1ift con ersion of their current asset in to cash.

4.05 *indings
BRA4 Ban"/ as 1e "no1/ is one of the fastest gro1ing !an"s in Bangladesh. 0M5 !an"ing 1hich has made the performance of this !an" so enlightened is its core product to offer to the small and mediocre !usiness entrepreneurs. In fact no !usinessman could thin" e er !efore that they could ta"e loan so easily/ 1ithout any collateral and 1ithout going to !an". But BRA4 Ban" has made this impro!a!le process so successfully through 0M5 !an"ing. Co1e er from the analysis of 0M5 loan repayment !eha ior I can ma"e the follo1ing findings# Relationshi' o" re+o%er rate ,ith age o" the borro,ers# Age has a significant impact on the reco ery of 0M5 loan. :oung entrepreneurs ha e a lo1er rate of reco ery. ,n the other hand as middle aged and e3perienced entrepreneurs are ery loyal 1ith their loan repayment they can ma"e proper and timely repayment of their loans. And thatFs 1hy most of the 0M5 loan !orro1ers age rages from (% to @%.
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Relationshi' o" re+o%er rate ,ith edu+ation o" the borro,ers# 5ducation does not ha e any direct relationship 1ith the reco ery rate. In fact/ Most of the entrepreneurs of retail and 1hole !usiness =small or medium in siAe> are not highly educated. Most of them studied up to class & or '%. 0ometimes there are some entrepreneurs 1ho ha e only alpha!etic "no1ledge or 1ho can gi e their signature only. But still they are running their !usiness so 1ell for many years. In this case e3perience ma"es them successful in their !usiness. 0o/ education does ha e much impact on these small and medium enterprises and also on the reco ery rate of 0M5 loans. Relationshi' o" re+o%er rate ,ith e-'erien+e o" the borro,ers# 53perience is the most significant aria!le 1hich has a great impact on any "ind of !usiness and reco ery rate as 1ell. 53perienced entrepreneurs run their !usiness so tactfully/ identify the e3act time 1hat is their pic" time of sales and 1hen they need fund. .hey ta"e the loan in the pic" season 1hen they ha e e3cess demand !ut short of capital. .hen they ensures the !est use of the loan and finally they reach to success and ma"e the dully installments. 0o their reco ery rate is good and thatFs 1hy BRA4 !an" loo"s al1ays for e3perienced entrepreneurs. Relationshi' o" re+o%er rate ,ith number o" installments o" the borro,ers# ?um!er of installments =term of loan> and amount of loan ta"en do affect reco ery rate slightly. But trends sho1 that BRA4 !an" prefers to dis!urse loan of an amount of (%%%%% and at a term of '+ to $@ months. Relationshi' o" re+o%er rate ,ith in+ome o" the borro,ers# Another aria!le affecting reco ery rate ery much is the income of the !orro1ers. .he higher the e3isting income of the !orro1ers must the lo1er the rate of default. Cigher income groups ma"e the !est use of the loan they ha e ta"en and get success. ,n the other hand lo1er income group may misuse the loan and ultimately may default in paying installments. Relationshi' o" re+o%er rate ,ith asset o" the borro,ers# Personal or family asset might ha e some impact 1hile sanctioning the loan as 1ell as 1hen reco ering the loan installments. 0uppose if a !orro1er fails to pay one of his installments/ !an" can find his personal assets as !ac" up for the reco ery of the installments. Relationshi' o" re+o%er rate ,ith t 'e o" business o" the borro,ers# Retail !usiness and 1hole sale !usiness !oth types of !usinesses get loans from BRA4 Ban" !ut 1hole sellers ha e a higher reco ery rate as their !usiness transactions occur at lot siAe and their collection is much quic". Finally 1e can say that 0M5 loan is a loan gi en especially to entrepreneurs 1ho are e3perienced small or medium !usinessmen/ more or less middle aged/ at least moderate income generated and 1ho ha e reasona!le personal or family asset. .hatFs 1hy their reco ery rate is so high that is &IL. And their default rate is so small compared to other loan categories. 0ometimes !orro1ers go for early settlements of their loans.

4.00 SDOT Anal sis
09,. analysis is an important tool for e aluating the companyFs 0trengths/ 9ea"nesses/ ,pportunities and .hreats. It helps the organiAation to identify ho1 to e aluate its
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performance and scan the macro en ironment/ 1hich in turn 1ould help organiAation to na igate in the tur!ulent ocean of competition.

Strengths
Com'an re'utation# BRA4 !an" has already esta!lished a fa ora!le reputation in the !an"ing industry of the country particularly among the ne1 comers. 9ithin a period of '' years/ BB6 has already esta!lished a firm footing in the !an"ing sector ha ing tremendous gro1th in the profits and deposits. All these ha e leaded them to earn a reputation in the !an"ing field. S'onsors# BB6 has !een founded !y a group of eminent entrepreneurs of the country ha ing adequate financial strength. .he sponsor directors !elong to prominent resources persons of the country. .he Board of Directors headed !y its 4hairman Mr. Muhammad A. =Rumee> Ali. .herefore/ BB6 has a strong financial strength and it !uilt upon a strong foundation. To' Management# .he top management of the !an" is also ma2or strength for the BB6 has contri!uted hea ily to1ards the gro1th and de elopment of the !an". .he top management officials ha e all 1or"ed in reputed !an"s and their years of !an"ing e3perience/ s"ills/ e3pertise 1ill continue to contri!ute to1ards further e3pansion of the !an". At BB6/ the top management is the dri ing force and the thin" tan" of the organiAation 1here policies are crafted and often cascaded do1n. *a+ilities and eBui'ment# BB6 has adequate physical facilities and equipments to pro ide !etter ser ices to the customers. .he !an" has computeriAed and online !an"ing operations under the soft1are called MB0 !an"ing operations. 4ounting machines in the teller counters ha e !een installed for speedy ser ice ant the cash counters. 4omputeriAed statements for the customers as 1ell as for the internal use of the !an"s are also a aila!le. Intera+ti%e +or'orate +ulture# BB6 has an interacti e corporate culture. Unli"e other local organiAation/ BB6Fs 1or" en ironment is ery friendly/ interacti e and informal. .here are no hidden !arriers or !oundaries 1hile interacting among the superior or the su!ordinate. .he en ironment is also li ely and since the nature of the !an"ing 2o! itself is monotonous/ BB6Fs li"ely 1or" en ironment !oosts up the spirit and moti ation of the employees.

Deaknesses
Ad%ertising and 'romotion o" SME loan# .his is a ma2or set!ac" for BB6 and one of its 1ea"est areas. BB6Fs ad erting and promotional acti ities are satisfactory !ut it 0M5 loan is not ad ertised 1ell. It does not e3pose its 0M5 product to general pu!lic and are not in lime light. BB6 does not ha e neon sign or any ad ertisement for 0M5 loan in the city. As a result people are not a1are of the e3istence of this !an". N<O name >BRAC?# BRA4 is one of the largest ?H, of the 1orld and it is operating its acti ities in Bangladesh. BRA4 !an" is not a ?H, !an" !ut many people of them country consider it as a ?H, !an" li"e Hrameen !an" 1hich is not correct.
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Lo, remuneration 'a+kage# .he remuneration pac"age for the entry and the mid le el management is considera!ly lo1. .he compensation pac"age for BB6 entry le el positions is e en lo1er than the contemporary !an"s. Under the e3isting lo1 payment structure/ it 1ill !e ery difficult to attract and retain high performing employees in BB6. 0pecially 4R,Fs are not satisfied 1ith compensation pac"age pro ided to them. O''ortunities <ro,ing Market# .he 0M5 sector in Bangladesh is still gro1ing and the Ho ernment of Bangladesh is focusing strongly on this sector. .his ample mar"et gro1th opening is a !ig opportunity for BRA4 Ban" 6td. Mobile Banking# Mo!ile !an"ing or money transfer ia mo!ile phone is already a popular choice among the mass. BRA4 Ban" also 1ith its su!sidiary !Kash doing good/ !ut there is a huge opportunity to gra! the untapped mar"et to !ring it 1ithin their !an"ing net1or". ATM# .his is the fastest gro1ing modern !an"ing concept. BB6 should gra! this opportunity and ta"e preparation for launching A.M. 0ince BB6 is a local !an"/ they can form an alliance 1ith other contemporary !an"s in launching the A.M. Large Customer Base# BRA4 Ban" 6td has an e3isting large customer !ase 1hich gi es them a clear head start against their competitors.

Threats
$'+oming banks# .he upcoming pri ate local !an"s can also pose a threat to the e3isting pri ate commercial !an"s li"e BB6. It is e3pected that in the ne3t fe1 years more local pri ate !an"s may emerge. If that happens the intensity of competition 1ill rise further and !an"s 1ill ha e to de elop strategies to compete against an on slaughter of foreign !an"s. Contem'orar banks# .he contemporary !an"s of BB6 such as Dha"a !an"/ prime !an" and Dutch Bangla are its ma2or ri als. Prime !an" and other !an"s are carrying out aggressi e campaign to attract lucrati e clients as 1ell as !ig time depositors. Inherent Risk o" Business# .he 0M5 consists )%L of BRA4 Ban" 6tdMs acti ity 1here other Ban" and financial institutions generally prefer large enterprise clients !ecause of lo1er .ransition costs/ and greater a aila!ility of collateral.

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..0 CONCL$SION
BRA4 Ban" 6td has pro ed that a !an" can alue People/ 5n ironment and also ma"e Profit. It is famous 1orld1ide for its sustaina!le !an"ing and its fast mo ement to1ards prosperity. BRA4 Ban"Fs contri!ution in 0M5 !an"ing is immense and uncompetiti e. Being the
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youngest !an"/ BRA4 Ban" has managed to !ecome the largest 0M5 !an" in Bangladesh and @th largest 0M5 !an" in the 1orld. 4onsidering the report/ BB6 has the highest 0M5 outlets/ 0M5 portfolio/ 0M5 outstanding loan and 0M5 customer !ase. .he findings and analysis sho1s that other !an"s are focusing on 0M5s and trying to e3pand their 0M5 portfolio 1hich means in the long run BRA4 Ban" might ha e competitors in terms of getting ne1 potential 0M5 customers. ABB6 has !een pro iding loans to 0M5s from long !efore and no1 it has an attracti e loan siAe. DBB6 is in a good shape in terms of 0M5 outlets/ 0M5 customer !ase/ 0M5 outstanding loan etc. It has standard loan siAe 1ith attracti e features including lo1est interest rate 1hereas 5B6 has attracti e product features li"e ariety of products/ arieties of loan siAe/ fle3i!le tenor period etc. ,n the other hand/ PB6 needs to focus more on 0M5s in order to compete 1ith other !an"s. In case of 0M5s/ more doors of finance are !eing opened for their !usiness prospect and they ha e more choices in terms of loan arieties/ loan siAe/ loan tenor/ loan interest rate etc.

..1 Re+ommendations
.o o ercome challenges faced !y 0M5 is not easy. Both the go ernment and indi idual organiAation need to concern a!out it. 0ome general instructions already discussed pre ious section. .his section 1ill recommend some policy could !e adapted !y BRA4 Ban" 6td specifically.
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.o o ercoming the !arriers discussed in pre ious section follo1ing policies can !e implemented. V Reduce the interest rate- Because many of their competitors are pro iding loans at a lo1er rate. For e3ample most of the competitors !an"s pro iding loan at '+-$$L interest rate. Cigh inertest rate is the result of high cost of fund/ so they must source fund at lo1er cost. V .rain the 4ustomer Relationship officers more comprehensi ely and realistically so that customers may not face any trou!le 1hile getting and repaying the loan. V 0ometimes 4R,s/ !an" staffs or direct sales tem select potential !orro1ers in order to meet sales target. ItFs a ma2or reason of defaulter. 0o BRA4 !an" should not put e3cessi e pressure on employees !ecause at the end of the day it hampers !an" reputation. V ,rganiAe entrepreneurs meeting to train them up according to the !usiness type. V Prepare retail di ision staffs specially front line employees a!out 0M5 astly. Because most people do come to retail !ranch in order to get informationFs. V A loan appro al procedure is lengthy. .his should !e reducing. V Borro1erFs assessment and monitoring system should !e stricter. 4urrent defaulter rate says that there are some 1ea"ness in loan appro al and monitoring system. V More media con erge is needed to inform potential !orro1ers a!out products and ser ices. .here .G ad ertisement and radio co erage could !e strong media. V BRA4 !an" can share common platform in order to pro ide 0M5 loan. It can 2ointly 1or" 1ith other financial institutes 1ithout hampering profits. For e3ample entrepreneur training season could !e arranged 2ointly 1ith 0M5 Foundation. V Increase mar"eting acti ities in the ur!an area !ecause other competing industries are gi en huge ad in ur!an area 1hich helps them to increase their customer !ase. V BRA4 !an" should ha e separate !an"ing di ision for 1oman. .his 1ill encourage 1oman in !a"ing acti ities. V AnalyAe customersF !eha ior that 1hat type of customer ma"es default and stop gi ing them 0M5 loan. V Ris" Management departmentFs audit report should !e more strict and relia!le so that possi!le defaulter may not get the loan.

..2 BIBLIO<RAP/F
http#QQ111.thefinanciale3press-!d.comQmore.phpWne1sXidY'@*+'+DdateY$%''-%+-'' http#QQ111.!dne1sli e.comQ$%''Q%+Qdecision-on-amendment-to-!oo"-!uilding-methodmutual-funds-rules-ta"enQ
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http#QQ111.dse!d.orgQdisplay4ompany.phpWnameYRAK45RAMI4 http#QQ111.dse!d.orgQdisplay4ompany.phpWnameYMI45M5?. http#QQ111.sec!d.orgQla1supdated.html http#QQ111.sec!d.orgQprospectus.html http#QQ111.!!s!angladesh.comQinde3.2sf

..3 S$<<ESTIONS *OR IMPRO(EMENT
'. Internship program duration should !e e3tended/ !ecause in this short period of time many things are not possi!le to do. $. .here are many information 1hich !an"s not share 1ith the intern/ Ban" should share those information is not 1hich is not ery confidential (. ,ur com!ined ma2or courses should !e clear ery much !ecause in many situations it confused me a lot. @. In !an"s/ internship program should !e treating ery professionally. *. 5mployee should ha e the mentality to help intern !y gi ing information. ). Ban" should pro ide all reports and documents 1hich is essential for the intern for ma"ing their report.

..4 <lossar
 BM-Branch Manager BBL
Asian $ni%ersit *)

2013
 AUB-Asian Uni ersity ,f Bangladesh  BB6-Brac Ban" 6imited  ?H,-?on Ho ernmental ,rganiAation  BM-Branch Manager  CRD-Cuman Resource De elopment  B00,-Branch 0alesD 0er ice ,fficer  400,-4ustomer 0ales D 0er ice ,fficer  40M-4ustomer 0er ice Manager  D05-Dha"a 0toc" 53change.  405-4hittagong 0toc" 53change.  RP,-Repeat Pu!lic ,ffering.  IP,-Initial Pu!lic ,ffering.  B5I6-BRA4 5P6 In estments 6imited.  ?RB-?on Residential Bangladeshi.  4DB6-4entral Depository Bangladesh.  054-0ecurities and 53change 4ommission.

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Asian $ni%ersit

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