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BRAC Bank Limited is a scheduled Commercial Bank in Bangladesh.

It established in
Bangladesh under the Banking Companies Act, 1991 and incorporated as Private Limited
Company on May 20, 1999 under the Companies Act, 1994. Its operation started on July
4, 2001 with a vision to be the market leader through providing all sorts support to
people in term of promoting corporate and small entrepreneurs and individuals all over
the Bangladesh. BRAC Bank will be a unique organization in Bangladesh. The bank
consist of major divisions named 1) Corporate banking, 2) Retail banking, 3) Treasury, 4)
Small & Medium Enterprise (SME). At present the Bank operating its business by 147
Branches.
BRAC Bank is the first local commercial banks that proving online banking service to its
customers from the very beginning of its starts. BRAC Bank, for the first time among
local commercial banks, starts providing loan facilities to small and medium trading,
manufacturing and service oriented enterprises all over the country. The Bank has already
established its network in different area of the country with assistance of BRAC.
SME Banking Division is a business division of BRAC Bank Limited that deals with
Small and Medium sized Entrepreneurs involved in different types of business. SME
banking division primarily provides loans to small and medium sized trading,
manufacturing, service, agriculture, non-farm activities and agro-based industries located
across the country.
The loan products offered by SME Banking Division are ANONNO, PROTHOMA RIN,
PROSHAR, BIZNESS LOAN, TRADE PLUS and BUSINESS EQUITY LOAN (BEL).
The SME loan range is from BDT 2 lac to BDT 350 lac (Funded: BDT 2 lac to BDT 350
lac, Non Funded: BDT 1 lac to BDT 30 lac). SME banking division offers Term loan,
Continuous (Cash covered) loan and Letter of Credit. Short Term: up to 9 months, Long
Term: from 12 to 120 months. Moreover there is also a deposit product named PRAPTTI
CURRENT ACCOUNT for the SMEs.
To avail a funded SME loan 15 to 25 days are required and for Non Funded SME loan,
the timeframe is 1 to 2 days from the date of application, if all the necessary papers are in
order. At present, loans are only given to entrepreneurs who have a running business of at
least one year. The interest rate of SME loans ranges from 14% to 17.8% on the reducing
balance method, depending on the amount and the loan scheme. Collateral is necessary
for loan amounts of BDT 10 lac and above. Generally collateral is not necessary for loan
amounts ranging from BDT 2 lac to below BDT 10 lac.
The SME loans are usually given for working capital finance, fixed asset finance and
trade finance. Loan amount is decided based on the fund requirement calculation, not on
the basis of collateral value. However, Lawyers opinion is necessary for mortgage
purpose. Registry Mortgage is necessary generally when the loan amount is BDT 10 lac
or more. At present SME Banking Division has reach in all 64 districts of the country
through 428 unit offices. The functional designation of the loan officers who operate
at the unit offices is Customer Relations Officers (CROs).

A zone is comprised of 1-6 unit offices, where the person in-charge of the zone is known
as a Zonal Manager. The reporting manager of a CRO is the Zonal Manager (ZM) or
Associate Relationship Manager (ARM). Zonal Managers/ Associate Relationship
Managers have the authority to approve a loan up to BDT 6 lac. There are 144 Zonal
offices in SME Banking at present. A Territory is comprised of 6-12 zones. There are 15
territories at present. The reporting of a Zonal Manager is the Territory Manager. The
Associate Relationship Managers however report to the Relationship Managers.
For disbursement of any SME loan a clean CIB report is required. A Valid trade license,
rental deed, and any other authorization (if necessary) are the primary documents that are
needed to get an SME loan. A number of information is required along with the loan
application form i.e. Inventory list, Accounts Receivables list, Accounts Payables list,
Buyers list, Suppliers list, and Fixed Asset list.
Minimum two guarantors are required for an SME loan, one of whom must be a third
party guarantor and another from his /her own family. A third party guarantor may be a
businessman or a service holder from the private sector with minimum wealth of 125% of
the loan amount. However, for a family guarantor the net wealth condition is not
applicable. A guarantor of SME loan can not avail a loan from BRAC Bank as long as
he/she is a guarantor.
The core competence of the BRAC Bank is to provide the fastest loans to the clients in
this country. To retain this competitive advantage BRAC Bank would provide computer
and palmtop facilities whether they can give fastest services to clients than other banks.
Also to convey the customer focus, BRAC Bank is trying to reduce collateral securities
than other banks. It provides more collateral free secured loans to capture the market.
Regarding the services by the CRO, almost all clients are satisfied by getting these quick
facilities from them. Though it is pioneer division of this bank, I tried to give an in-depth
analysis for every factor, which relates the SME division from the perspective of
customer satisfaction and dissatisfaction.

B rac Bank Limited is a scheduled commercial bank in Bangladesh. It established in


Bangladesh under the Banking Companies Act, 1991 and incorporated as private limited
company on May 20, 1999 under the Companies Act, 1994. Its operation started on July
4, 2001 with a vision to be the market leader by providing all sorts of support to people
in
term of promoting corporate and small entrepreneurs and individuals all over the
Bangladesh.
Brac Bank will be a unique organization in Bangladesh. The Bank consists of major
divisions named 1) Corporate banking, 2) Retail banking, 3) Treasury, 4) Small &
Medium Enterprise (SME). At present the Bank operating its business by 147 Branches.
BRAC Bank is the first local commercial banks that proving online banking service to its
customers from the very beginning of its starts.

Brac Bank, for the first time among local commercial banks, starts providing loan
facilities to small and medium trading, manufacturing and service oriented enterprises all
over the country.
An Overview of BRAC Bank Ltd.
B rac Bank Limited, one of the latest generations of commercial banks, which started its
journey on the 4th of July 2001 with a vision to be the absolute market leader. Brac Bank
is a commercial scheduled bank extending full range of banking facilities as per the
directives of Bangladesh bank. It intends to set standards as the absolute market leader by
providing efficient, friendly and modern fully automated on-line service on a profitable
basis. BRAC Bank in surviving in the large banking arena through its unique and
competitive products and it is the only local bank providing 100% integrated on- line
banking.
Brac Bank Limited, with institutional shareholdings by BRAC, International Finance
Corporation (IFC) and Shore cap International, has been the fastest growing Bank in
2004 and 2005. At the year end of 2005, BRAC Bank had recorded a 103 percent growth
in assets, and a 65 percent growth in liabilities, with an operating profit of 84 percent
over the previous year 2004.
A fully operational commercial bank, Brac Bank focuses on pursuing unexplored market
niches in the Small and Medium Enterprise Business, which hitherto has remained largely
untapped within the country. In the last four years of operation, the Bank has disbursed
over BDT 1200 crore in loans to nearly 32,000 small and medium entrepreneurs. The
management of the Bank believes that this sector of the economy can contribute the most
to the rapid generation of employment in Bangladesh.
The Bank is mainly owned by the largest NGO in Bangladesh- BRAC .The Bank has
positioned itself as a new generation Bank with a focus to meet diverse financial need a
growing and developing economy.
The Bank has embarked with an avowed policy to promote broad based participation in
the Banish economy through the provision of high quality banking service based on latest
information technology. The Bank will ensure this by increasing access to economic
opportunities for all individuals and businesses in Bangladesh with a special focus on
currently under served enterprises and households across the rural urban spectrum. We
believe that increasing the ability of under served individuals and enterprises to build
their asset base and access market opportunities will increase the economic well being for
all Bangladeshis.
2.2 Brand Promise
Astha Obichol.

2.3 Vision
Building a profitable and socially responsible financial institution focused
on
Markets and Business with growth potential, thereby assisting
BRAC and stakeholders build a just, enlightened, healthy, democratic and poverty
free Bangladesh. Breaking barrier within 2009.

2.4 Mission

Sustained growth in Small & Medium Enterprise sector.


Continuous low cost deposit growth with controlled growth in Retained Assets.
Corporate Assets to be funded through self-liability mobilization. Growth in
Assets through Syndications and Investment in faster growing sectors.
Continuous endeavor to increase fee based income.
Keep our Debt Charged at 2% to maintain a steady profitable growth.
Achieve efficient synergies between the banks Branches, SME Unit offices and
BRAC field offices for delivery of Remittance and Banks other products and
services.
Manage various lines of business in a fully controlled environment with no
compromise on service quality.
Keep a diverse, far flung team fully motivated and driven towards materializing
the banks vision into reality.

2.5 Objective of the bank

To provide wide range of financial services professionally, efficiently and


competitively to achieve per-eminent position in chosen market.
Diversity revenue stream through product innovation.
A Well-diversified credit portfolio, which produces a reliable and consistent return
to investment.

2.6 Business Units


There are five different business units generating business BRAC Bank Limited:

Small & Medium Enterprise (SME)


Corporate Banking
Retail Banking
Treasury
Remittance Services

All the units are being operated in a centralized manner to minimize costs and risks.

Basic Appraisal of Small &Medium Enterprise


B usiness or project appraisal is a technique of evaluating and analyzing Business from
various aspects, primarily the risks associated with that business enterprise. At the time of
appraisal of any manufacturing, trading or service related organization, factory or
industry; one has to perform a feasibility study on the different aspects. These are:

Management and Personal Aspects


Technical Aspects
Marketing Aspects
Financial Aspects
Social Economic Aspects
Security Aspect

Management and personal aspects


During the appraisal prosecute the Customer Relation Officer (CRO) should endeavor to
obtain details about the prospective borrowers, some of which are:

Business related information


Credit History
Liquidity Information
Management Background

In considering the above, one should look at the business is managed. CRO should also
consider clients previous credit history like facilitates sought and availed, loan repayment
an overdue record, if anyone checks the clients bank account and amount of balance
maintained. Managements qualification, experience, successor and maintenance of
records should provide insight in to the business.

3.2 Products & Services


SME Banking Division is a business division of BRAC Bank Limited that deals with
Small and Medium sized Entrepreneurs involved in different types of business. SME
banking division primarily provides loans to small and medium sized trading,
manufacturing, service, agriculture, non-farm activities and agro-based industries located
across the country.
The loan products offered by SME Banking Division are ANONNO, PROTHOMA RIN,
PROSHAR, BIZNESS LOAN, TRADE PLUS and BUSINESS EQUITY LOAN (BEL).
The SME loan range is from BDT 2 lac to BDT 350 lac (Funded: BDT 2 lac to BDT 350
lac, Non Funded: BDT 1 lac to BDT 30 lac). SME banking division offers Term loan,

Continuous (Cash covered) loan and Letter of Credit. Short Term: up to 9 months, Long
Term: from 12 to 120 months. Moreover there is also a deposit product named PRAPTTI
CURRENT ACCOUNT for the SMEs.
To avail a funded SME loan 15 to 25 days are required and for Non Funded SME loan
the timeframe is 1 to 2 days from the date of application, if all the necessary papers are in
order. At present generally, loans are only given to entrepreneurs who have a running
business of at least one year.
The interest rate of SME loans ranges from 14% to 17.8% on the reducing balance
method, depending on the amount and the loan scheme. Collateral is necessary for loan
amounts of BDT 10 lac and above. Generally collateral is not necessary for loan amounts
ranging from BDT 2 lac to below BDT 10 lac.
It is compulsory for a borrower to have a current A/C either with BBL or with a
correspondent bank branch if there is no BBL branch or SME sales & service center in
the locality. The City Bank Ltd, Janata Bank, Bangladesh Krishi Bank, Pubali Bank Ltd,
Agrani Bank, Rupali Bank Limited are the correspondent banks of BRAC Bank. Bank
transaction record is mandatory for Anonno (Ovedraft), Bizness Loan, Trade Plus &
Business Equity Loan (BEL) only.
The SME loans are usually given for working capital finance, fixed asset finance and
trade finance. Loan amount is decided based on the fund requirement calculation, not on
the basis of collateral value. However, Lawyers opinion is necessary for mortgage
purpose. Registry Mortgage is necessary generally when the loan amount is BDT 10 lac
or more.
Working capital finance can be maximized up to 100% of the net required working
capital or 75% of the sum total of inventory, advance payment and receivables whichever
is lower. Fixed asset finance cannot be more than 90% of the purchase price, but the debt
equity ratio in fixed assets investment in the projected year (after purchase of new fixed
assets) cannot be more than 1 (one). A customer can apply for a repeat loan when 80% of
the previous loan tenure has passed and made a satisfactory repayment. If all installments
are paid on due dates, they will also get a concession on the existing interest rate.
Generally SME only provides business loans in the enterprises name. However, loan can
be sanctioned in the personal name of the borrowers, if the tenant borrower cannot obtain
trade license showing his name as owner of the business due to the conditionality
imposed by the market committee/owner. Fire insurance is mandatory to avail a loan
except for a few concerns like poultry, fishery, farming & wood business (preserve under
water).
Process:
For disbursement of any SME loan a clean CIB report is required. A Valid trade license,
rental deed, and any other authorization (if necessary) are the primary documents that are

needed to get an SME loan. A number of information is required along with the loan
application form i.e. Inventory list, Accounts Receivables list, Accounts Payables list,
Buyers list, Suppliers list, and Fixed Asset list.
Guarantors:
Minimum two guarantors are required for an SME loan, one of whom must be a third
party guarantor and another from his /her own family. A third party guarantor may be a
businessman or a service holder from the private sector with minimum wealth of 125% of
the loan amount. However, for a family guarantor the net wealth condition is not
applicable. A guarantor of SME loan can not avail a loan from BRAC Bank as long as
he/she is a guarantor.
3.3 Fees & Charges
Stamp cost:
It is the cost that will be needed in future for legal procedures. For an SME loan the
stamp cost is BDT 620 only.
Loan Application Fees:
The borrower has to pay BDT 200 and 15% VAT thereon as the loan application fees at
the time of loan disbursement.
Loan Processing Fees:
Loan Processing Fee of SME loan ranges from 1% to 2.5% plus VAT of the loan amount.
Early Settlement Fees:
Early settlement fees of 1% to 5% plus VAT thereon will be charged on the outstanding
amount for early settlement of EMI loans of SME Banking. There is no early settlement
fee for Non EMI loans. If a client misses the installment date, he/she will have to pay
day-wise interest on the outstanding amount.

3.4 Repayment
EMI:
EMI stands for Equated Monthly Installments. It is the system where installments are
paid in equal amount on a monthly basis.
Single payment system:

It is the system where interest is paid monthly and the total principle is paid at maturity
(except for Anonno loan). For Anonno loan 70% repayment of the principal will be
realized in the following month of the highest sales/cash collection and the rest 30% will
be realized in the following second month.
Distribution:
At present SME Banking Division has a reach in all 64 districts of the country through
429 unit offices. The functional designation of the loan officers who operate at the
unit offices is Customer Relations Officers (CROs).
A zone is comprised of 1-6 unit offices, where the person in-charge of the zone is known
as a Zonal Manager. The reporting manager of a CRO is the Zonal Manager (ZM) or
Associate Relationship Manager (ARM). Zonal Managers/ Associate Relationship
Managers have the authority to approve a loan up to BDT 6 lac. There are 144 Zonal
offices in SME Banking at present.
A Territory is comprised of 6-12 zones. There are 15 territories at present. The reporting
of a Zonal Manager is the Territory Manager. The Associate Relationship Managers
however report to the Relationship Managers.

SME Sales and Service Center:


SME Sales and Service Center is a distribution point of BRAC Bank Limited to render
banking services to the SME sector across the country by reaching them quickly,
effectively, conveniently & in a focused way.
Objectives of SME Sales and Service Center are attached below:
Rendering banking services to SMEs in a cost effective way

Allowing SMEs to systematically withdraw loan amount


Smooth recovery of SME loans
Receive & deliver foreign remittance to concerned payees
Reduce dependency on correspondent banks to disburse loans through & collect
repayment

SME Sales and Service Center has added new dimensions in catering SMEs with both
loan and deposit products i.e. a complete banking solutions.
3.5 Units of SMS Banking Division
Small Business

This largest business unit of SME Banking Division has long been providing loans to
Small entrepreneurs. This business wing offers varying products. SME entrepreneurs
mostly require small finance that this business unit has successfully been offering to all
level of SME borrowers.
Medium Business
This business unit meets the financing requirements of medium entrepreneurs. Special
products have been designed to serve the customers of this segment.
Product Development
This unit develops customized and need based products for small and medium
entrepreneurs. Product Development wing also develops campaign and takes initiative to
design merchandises, with the help of the creative and communication division.
SME Administration
This unit is comprised of several wings one of which is Compliance Reporting which
ensure compliance of internal policies & Bangladesh Bank regulations to the unit offices,
deals with client requests and queries. Another wing named Coordination maintains
liaison of SME Head office with SME unit offices & other departments. Legal guidance
and assistance is also extended to personnel at SME unit offices through this unit.
Monitoring unit reviews prevailing processes of SME Banking Division & ensures
meticulous business reporting for smooth operation.

3.6 Products of SMS Banking


ANONNO: A collateral free business loan to one year going concern i.e. small and
medium sized trading, manufacturing, service, agriculture, non-farm activities, agrobased industries etc. all over Bangladesh.
PROTHOMA RIN: An asset product offered to women entrepreneurs to expand their
businesses. This products main objective is to help women entrepreneurs to meet their
short-term cash flow shortages or bridge the fund-flow gaps.
PROSHAR: Proshar is a loan facility for Small and medium sized manufacturing
industries located in the surrounding areas of unit offices across the country. It is
primarily meant for working capital finance/ fixed asset purchase for the business.
BIZNESS LOAN: This loan facility caters cash flow requirement of medium sized
enterprises located around the unit offices which are at proximity of the BRAC Bank
Branches. To avail this loan facility healthy banking track record is required and medium
sized entrepreneurs can avail this loan facility against 30% to 50% cash security.

TRADE PLUS: This product offers both funded & non funded loan facility to import
oriented Small & Medium Entrepreneurs and constantly supports them to smoothly
operate their import activities.
Business Equity Loan (BEL): Business Equity Loan is the loan facility for SME
entrepreneurs to meet their short or long term cash flow requirement or bridge the fund
flow gaps.
3.7 Organizational Layout of BRAC Bank SME Loan

Credit Division
Business Development Division
MIS Division

SME Loan process flow is shown belowWhen a client comes for a loan request, first he meets a CRO, then the following process
take

place:
5.3 Terms and Conditions of SME Loan
The SME department of BRAC Bank will provide small loans to potential borrower
under the following terms and condition:

The potential borrowers and enterprises have to fulfill the selection criteria
The loan amount is between Tk. 2 lacs to 30 lacs.
SME will impose loan processing fees for evaluation / processing a loan proposal
as following;

Loan Amount
2 lacs to 2.99 lacs
3 lacs to 5 lacs

Loan Processing Fee


Tk. 5000
Tk. 7500

5.01 lacs to 15 lacs


Tk. 10,000
15.01 lacs to 30 lacs

Tk. 15,000
Loan can be repaid in two ways:

a)

In equal monthly loan installment with monthly interest payment, or

b)

By one single payment at maturity, with interest repayable a quarter end


residual on maturity

Loan may have various validates, such as, 3 months, 4 months, 6 months, 9
months, 12 months, 15 months, 18 months, 24 months, 30 months and 36 months.
The borrower must open a bank account with the same bank and branch where the
SME has its account
Loan that approved will be disbursed to the client through that account by account
payee cheque in the following manner: Borrower name, Account name, Banks
name and Branchs name
The loan will be realized by 1st every months, starting from the very next months
whatever the date of disbursement, through account payee cheque in favor of
BRAC Bank Limited A/C . With Banks named and branches name
The borrower has to issue an account payable blank cheque in favor of BRAC
Bank Limited before any loan disbursement along with all other security.
The borrower will install a signboard in a visible place of business of
manufacturing unit mentioned that financed by BRAC Bank Limited.
The borrower has to give necessary and adequate collateral and other securities
as per banks requirement and procedures.
SME, BRAC Bank may provide 100% of the Net Required Working Capital but
not exceeding 75% of the aggregate value of the Inventory and Account
Receivables. Such loan may be given for periods not exceeding 18 months. Loan
could also be considered for shorter periods including one time principal
repayment facility, as stated in loan product sheet.
In case of fixed asset Financing 50% of the acquisition cost of the fixed asset may
be considered. While evaluating loans against fixed asset, adequate grace period
may be considered depending on the cash generation after the installation of the
fixed assets. Maximum period to be considered including grace period may be for
36 months.

5.4 Monitoring
Monitoring is a system by which a bank can keep track of its clients and their operations.
So monitoring is an essential task for a CRO to know the borrowers activities after the
loan disbursement. This also facilitates the buildup of an information base for future
reference.

6.3 Micro Environmental Analysis


Marketing management job is to attract and build relationship with customers by creating
customer value and satisfaction. It depends on other factors in the organization
microenvironment- suppliers, customers, competitors; various publics that make up the
organizations value delivery system. The company needs to study its customer marketer
closely in terms of Small and Medium Enterprise of BRAC Bank Limited and their
customers group is specified. Their target group is only Small and Medium Enterprise
client. The CRO closely monitor and try to build good report with clients. On the other
hand corporate clients are different to have the loan. Each market type has special
characteristics that call for careful study by the marketer.
In terms of SME, most clients are carrying out trading business rather than manufacturing
business. Few clients are attached with service business like pharmaceutical, hospital,
homeopath etc. In the trading business clients want loans to meet their working capital
requirement. On the other hand, clients want 10-15 for purchasing fixed assets.
In our country mostly 35-40 years old clients are carrying out loans regarding the type of
their business. The clients who interested to take the loan of SME then they have
maintained at least one year running business. It is a policy of this bank because in the
mean while client can understand his business and can set a future plan.
The educational qualification of our clients is very poor. Clients are under graduate but
carry out good business. SME support their clients who are carrying out good business
and also give suggestions and guidelines to develop their business. If any client has
maintained loans with other banks then SME is restricted to provide loans for those
clients. The client needs clearance certificate to get the loan from the BRAC bank.
It has been found out that in our country most clients need small loans to develop their
own business. The world is being globalizes and modernized. Therefore, client takes risks
to enhance and develop their business and BRAC bank is a good helping hand to help
them. In our country, clients want more time to repay the loan. BRAC bank gives
adequate time for the client to repay the loan whether they can get benefit from it.
Clients are very happy to repay the loan by equal monthly installment. Clients know the
right time to repay the loan at the right place. But in the pick season, most client wants
short fund requirement to carry out good business. Regarding interest rates, clients are
not talk about more because clients get the loan at the right time from the BRAC bank.
Clients are also happy by the issuance of security preferences because they do not have to
provide any collateral security for hypothecation or unsecured loans. SME of BRAC
bank networks has everywhere in Bangladesh. So clients can have the SME loans
wherever his business exists in the country. In addition, clients get the fast service from
the BRAC bank.

The purpose of this loan is the economic development in our country, which might divert
the clients mind after having the loans for expansion. Many clients have ambition to
expand from trading to manufacturing business to generate more profit. When a CRO
would visit a business, the client must provide the proper and right information and show
the right documents for justifying a good client. If any CRO feel bad smell in the
business then the CRO reject that client without concerning the management. So clients
should be feel comfortable to provide proper information to have the loan. Regarding the
service by the CRO, getting these quick facilities from them satisfies almost all clients.
Though it is pioneer division of the bank, client should be fully satisfied by having this
facility.

6.4 Industry Analysis: SME facility of BRAC Bank Limited


a. Threat of New Entrant
In every industry, there is a threat of new entry, which varies according to industry.
Similarly, the banking sector of Bangladesh also faces the threat of new entrants.
However, the threat comes from two directions. The first threat comes from the arrival of
the multinational banks and their branch expansion particularly due to the booming
energy sector. For example, Standard Chartered Bank already inaugurates the SME loan.
Another threat comes from the emergence of new private commercial banks. For
example, Southeast Bank, Dhaka Bank & others, the countries traditional banks are
facing the treat of further competition and better quality service. Similarly, the potential
banks that may emerge in the next few years will further enhance the intensity of
competition and may pose further threat to the existing banks. At the same time, arrival of
the foreign banks is posing threat and pressure on the existing banks.
At the same time, arrival of the foreign banks is posing threat and pressure on the existing
banks. Already Standard Chartered Bank and Hong Kong Sanghai Banking Corporation
(HSBC) have started to provide small loans to clients and they are also going to start door
to door services to clients.

b. Growth in the Industry


The rivalry among the competitors and the growth in the industry depends upon the
intensity of competition. If the industry has a high intensity of competition then the
industry will have a high growth rate, as all the firms will try to beat the others in order to
grab the market share. Similarly, the banking sector of Bangladesh is growing
considerably and at the same time competition is increasing. Currently BRAC bank SME
division is a pioneer one and carrying out Digital Technology Management Systems.

SME History of BRAC Bank Ltd:


He wants to see poverty banished forever. This has been his single-minded pursuit in
life. Ever since a devastating cycle wreaked havoc on the lives of the people and property
in the coastal regions of pre-independence Bangladesh 1970, everything changed for a
young chartered accountant. The young man was so moved by the death and destruction
that he, along with some friends, dedicated to set up HELP to carry out relief and
rehabilitation efforts. Later after the independence of Bangladesh the young man sold his
flat in London and decided to set up a relief and rehabilitation center in the war ravaged
Bangladesh. He never looked back.
He is Sir Fazle Hasan Abed, the founder and chairperson of BRAC, the worlds largest
NGO, arguably in terms of size and operation. BRAC has been working relentlessly to
realize the hidden potential of mankind, especially the ones who are most deprived of
opportunities.
It is this same vision that motivated him to come up with a bank that could realize the
untapped potentials of this country. Traditionally banking in Bangladesh has mainly
addressed the mid to large sized businesses or the professionals. When Sir Fazle Hasan
Abed established BRAC Bank he did it with the goal to serve the highly motivated group
of entrepreneurs who wanted to break out of the vicious cycle of poverty and take control
of their own future. We call them the Missing Middle. His long cherished dream of
availing quality finance services to these small to medium businesses finally come to
reality. BRAC Bank proud to be the pioneering and largest SME bank in Bangladesh,
discharging over 10,000 core taka in SME loan and helping fulfillment of more than
256,000 dreams that change hundreds and thousands of lives every day.
SME banking division of BRAC Bank Limited has successfully made a mark in creating
platform for small and medium entrepreneurs in Access to Finance, the key to the
prime obstacle towards growth of SMEs. Since inception BRAC Bank upholds the motto
to finance the Missing Middle the underserved market segment of SMEs. Years of
market knowledge and understanding, committed resources, countrywide coverage and
well aligned strategies have made the bank an expert in SME financing and the bank has
successfully developed an examined and successfully model in SME financing in
Bangladesh.
The strengths of BRAC Banks SME Banking Division behind the success of growth are
as follows:

Dynamic human resource


Country distribution network and coverage
Continuous development in creating innovative products
Unique loan approval process and monitoring
Robust risk management system

The bank has incorporated double bottom line approach in its operation -

1) Making profit by mobilizing fund from urban to rural areas.


2) Performing social responsibility by creating an entrepreneurial class.
Along with Small & Medium Enterprise financing, SME banking division is also actively
working in creating awareness and imparting knowledge to SMEs about financial record
keeping, dealing with modern banks and industry best practices in SME operation. In an
attempt to ensure customer awareness and to strengthen the relationship with customers,
SME banking division arranged informative campaigns and road shows for SMEs located
across the country.
3.2 Importance of SME
The main focus of BRAC Bank is to develop human and economic position of a country.
Its function is not limited only to providing and recovering of loan but also try to develop
the economy of a country.
So reasons for this program from the viewpoint of BBL:

3.2.1 Support Small Enterprise


The small enterprise, which requires BDT 2 to 30 lacks loan, but they have no easy
access to the banks/financial institutions. For example: In case of Anonno loan, an
amount of 3 to 8 lacks is provided without any kind of mortgage.
3.2.2 Economic Development

Economic development of a country largely depends on the small and medium seal
enterprises. Such as, if we analyze the development history of Japan, the development of
small & medium scale enterprises expedite the development of that country.
3.2.3 Employment Generation
The bank gearing employment opportunities by two ways: Firstly, by providing loan to
the small enterprises expanding, these businesses require more workers. Secondly, Small
& Medium Enterprise (SME) program requires educated and energetic people to provide
support to entrepreneurs.
3.2.4 Profit Making
SME program is a new dimensional banking system in the banking world. Most of the
CROs are providing door-to-door services to the entrepreneurs. Entrepreneurs are
satisfied by the service of the bank and make profit.
3.2.5 Encourage Manufacturing
The focus of BRAC Bank is to encourage manufacturing by the entrepreneurs who
produce by purchasing various types of materials. CRO try to educate them to produce
material if possible because if they can produce in line of purchase profits will be high.
3.2.6 Spread the Experience
Another reason of BRAC Bank is to spread the knowledge on the importance of SME
banking regarding various businesses. The customer services officer share their
knowledge from various businesses and tries to help the entrepreneurs who have shortage
of the gathered knowledge. CROs who are the driving force of SME division of BRAC
Bank also gather knowledge about various businesses and make stronger knowledge
base.
3.3 SME Products
BRAC Bank, being the youngest bank, took a step to break away from usual tradition and
tapped into the true suburb entrepreneurial initiatives.
Today, with over 10,000 cores of loans disbursed till date, BRAC Bank is countrys
largest SME financier that has made more than 265,000 dreams come true!
If you have a dream on which you trust, let us make it true together.
Loan products
Annono RinApurbo RinAroggo Rin

Deposit Products
Prapti Current Account

Digoon Rin
Prothoma Rin
Trade plus
Business Equity Loan
Proshaer Rin
Business Loan
Supplier Finance
3.3.1 Anonno Rin
This is a small scale loan designed to finance small scale trading, manufacturing and
service ventures, especially to aid the purchase of fixed assets and to finance working
capital.
Eligibility

Entrepreneurs aged between 18 to 60 years


o Entrepreneurs with minimum 2 years experience in the same line of
business
o
A business which must be a going-concern with more than 1 year in
operation

Maximum Amount

From minimum BDT 3 lac up to maximum of BDT 8 lac

Features

Loan without mortgage


For excellent borrowers who have paid or paying in due times, we offer
discounted rates
o Quick, quality banking throughout the country
o Potential women entrepreneurs will also get the facilities of this loan

3.3.2 Apurbo Rin


In order to help our SME borrowers for financing working capital or to purchase fixed
assets,

BRAC Bank offers APURBO. It caters to the need of entrepreneurs who are operating in
trading, manufacturing, service, agriculture, non-farm activities, agro- based industries
and other sectors of our economy.
Eligibility

Entrepreneurs having a minimum of 3 years of some business activities


A business which must be a going concern for 3 years
Age minimum 25 years and maximum up to 60 years

Maximum Amount

Starting from BDT 8 lac to maximum of BDT 30 lac Features


Without mortgage loan below 10 lac
o Simple loan processing for expanding your business
o Quick disbursement
o Disbursement in one or two installment
o
Flexible monthly repayment loan

3.3.3 Pathshala Rin


This is a loan designed to meet the needs of small and medium sized private educational
institutions, such as kindergartens, schools and colleges etc.
Eligibility

A small & medium educational institute that is in operation for minimum 3 years
The institution should be sole proprietorship, partnership, private limited
company or society
The educational institute must be a profit making concern

Maximum Amount

Minimum BDT 3 lac to maximum BDT 30 lac Features


Without mortgage for loan below 10 lac
Loan for fixed assets purchase & civil construction 9 Loan repayment can be
spread up to 4 years
o
Minimum documentation
o Monthly repayment loan
o Quick disbursement
o Flexible interest rate based on security

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