Term Paper

Course Title: Business Statistics

Course Code: EIB 504

Submitted to,
Prof. Dr. Md. Kamal Uddin
Professor, Dept. of International Business
Faculty of Business Studies,
University of Dhaka

Submitted by,

Tasnim Shahriar (ID: 801929001)

Ridwan Bayezid (ID: 801928003)

Ananna Zaman (ID: 801929010)

Faysal Alam Khan (ID: 801929030)

Sajeeb Sakhawat Anindo (ID: 801929052)

Date of Submission: 13th December 2019

 LETTER OF TRANSMITTAL

13th December 2019

To
Prof. Dr. Md. Kamal Uddin
Professor, Dept. of International Business
Faculty of Business Studies,
University of Dhaka

Subject: Letter of Submitting the Term Paper

Dear Ma‘am:

With due respect and humble submission, we would like to mention that, we are submitting the
Assignment and would like to take the opportunity to thank you for your guidance and
supervision in its completion. We believe we have completed the term paper accordingly. Sir,
we have tried our best to organize all the necessary information related to the topic along with
upcoming relevant events and figures. And of course, with your guidance, it was completed in
the best possible manner.

We, therefore, pray and hope that you would be kind enough to accept the term paper and with
your kind appreciation will glorify my endeavor.

Best Regards,

Tasnim Shahriar (ID: 801929001)

Ridwan Bayezid (ID: 801928003)
Ananna Zaman (ID: 801929010)
Faysal Alam Khan (ID: 801929030)
Sajeeb Sakhawat Anindo (ID: 801929052)

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 ACKNOWLEDGEMENT

Alhamdulillah, we have completed the assignment by the grace of the Almighty Allah. The
Heartiest gratitude goes to the respected Supervisor; Prof. Dr. Md. Kamal Uddin,
Professor, Dept. of International Business, Faculty of Business Studies, University of
Dhaka for providing me with enough support to prepare this assignment. We appreciate his
wonderful co-operation and the sacrifice of his valuable time. For the endless ideas, the
internet, few journals from Google scholar also contributed in the completion of the
Assignment. We would love to thank some supportive and helpful individuals, family and
friends to whom we have come across to complete this assignment as well.

Received by,

………………………………..

Prof. Dr. Md. Kamal Uddin

Professor, Dept. of International Business,
Faculty of Business Studies
University of Dhaka

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 EXECUTIVE SUMMARY

The whole report has been focused on the Credit card banking of Mercantile Bank Ltd.,
the plausible reasons of choosing that bank, explanation of the decisions. Also, some
behavioral analysis of the customers. We have tried our best to portray the customer
thinking, requirements and expectation from the MBL credit card and also the performance
of MBL credit card in the light of customers opinion.

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 CONTENTS

1. Introduction 6

2. Consumer survey objectives and coverage 6

3. Questionnaire 7

4. Finding & Analysis 10

5. Conclusion 11

References 12

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 Credit card banking of Mercantile Bank Ltd.

1. Introduction

The report has been focused on Credit card banking of Mercantile Bank Ltd. The largest cost
for credit card companies is generating while customers are not paying their debt.
Consequently, providing credit card is a risky process from the bank’s side. One of the largest
businesses carried out by the Mercantile bank is foreign trading but it has recently extended its
operation largely in credit card banking. The main focus behind working on the topic was also
to find out whether the credit card members are getting what they expect from the Credit Card
facilities provided by Mercantile Bank Ltd. Thus, the data used in this report were very
important in regard to finding out the key facts in fulfilling the research objectives. Some
suggestive remarks were also provided keeping in mind the trends and operations process of
credit card business along with its weak points and limitations.

A positive relationship has been found between the income level of a person and his/her
possession of the credit card. While making the choice of a credit card, the trust in a particular
brand name seems to hold a very significant importance in the selection of a credit card, instead
of the logo of Visa or Master card.
In today’s consumer economy, credit cards have become a necessity for many consumers. This
has made credit card banking one of the most profitable types of banking. Credit card
companies primarily earn their money in three ways. They charge merchants around 2% to 3%
of every transaction made using their credit card. They charge customers interest on unpaid
balance carried from month to month. And they charge a variety of fees, including annual and
late fees. For these reasons, credit card companies earn more money depended on the more
customers they have and are always looking for more people to use their services.

2. Consumer survey objectives and coverage

The primary research objective of the consumer survey was to enhance the understanding of
consumer behavior in relation to using credit cards of Mercantile Bank Ltd.
The following sub-sections give the sub samples of our survey:
Sub-samples
Different versions of the questionnaire were envisioned for three subsamples of respondents:
• Active users – anyone who uses a credit card regularly/ has used a credit card in the last 12
months for purchase, cash advance and/or made are payment
• Inactive users – anyone who has a credit card or cards but has not used it/ any of them in the
last 12months
• Non-users – people with no credit cards, would include people who never had a credit card
The main questionnaire would be for active users.

Additional segmentation
The questionnaire would be required also to allow for additional segmentation by:
• Demographic profiles
• Number of credit cards held
• Credit card limit
• Credit card usage
• Repayment patterns
• Types of cards held/ types of card usage

3. Questionnaire

I. For active credit card users, the questionnaire would be required to cover:
• Why they chose the card?
• Consumers’ motivation to switch/ not to switch
• Consumers’ views on product complexity and transparency and their understanding of
product features
• Repayment behavior

II. For inactive credit card users, questioning would address:

• Why they do not use the card(s)
• Do they like the terms offered?
• Do they understand the terms of the credit card?
• Do they intend to use it in future?

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III. For non-credit cards users, questioning would cover:
• Reasons for not having a card
• Likelihood of applying for a credit card in the future

Due to the limitation of time and resources, we were only able to work with the active credit
card users.

Design principles
It was essential that the questionnaire was suitable specifically for a quantitative study
implemented online. In particular, this required:
• Questions to be unambiguous (i.e. capable of accurate interpretation by respondents without
any supportive input or clarification by an interviewer)
• Questions to be structured rather than open-ended
• Overall questionnaire length to be viable for on the go surveying

Implementing modules
It was decided to implement two groups of ‘modules’ to accommodate the desired questioning
within the target maximum interview length around `4 to 5 minutes’
The few questions with responses of the questionnaire is given below:

Q. Why did you chose the card?

Number of people marked the option(s)

Options given in the survey
(out of the 30 who took part in the survey)
I had looked at information about credit cards price
0
comparison & decided to get it
I had seen advertisement by telephone or online &
3
decided to get it
I had received an invitation or offer to apply for
1
specific credit card
It was easy for me to have a credit card from
15
Mercantile bank Ltd as I am their regular customer

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 I liked the offers & services provided by
5
Mercantile bank Ltd
A friend, family member or adviser suggested to
5
get the credit card
Other 1

Q. What is your main purpose of having the credit card?

Number of people marked the option(s)

Options given in the survey
(out of the 30 who took part in the survey)

Getting the access to offers 8

Social value 5

Easy cash credit facility 1

EMI, e-commerce & other services 10

Payment security 5

Other 1

Q. How much satisfied you are with your Mercantile bank Ltd Credit Card?

Number of people marked the option(s)

Options given in the survey
(out of the 30 who took part in the survey)

Highly satisfied 15

Satisfied 5

Neutral 2

Dissatisfied 3

Highly dissatisfied 5

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Q. Do you wish to switch to any other bank’s Credit card?

Number of people marked the option(s)

Options given in the survey
(out of the 30 who took part in the survey)
Yes 7
Maybe 3
No 20

Q. What improvement would you like to see from the below list?

Number of people marked the option(s)

Options given in the survey
(out of the 30 who took part in the survey)

Service provided from the card department 5

Service provided from the branch 2

Credit card billing services 10

Complexity of the usage or features 5

Complexity of the offers 6

Other 2

4. Finding & Analysis

Reason for selecting MBL Card

It has been clear that the main reason behind the customer’s selection of MBL card is they are
regular customer of the bank, so they preferred a credit card from that bank. An assumption
can be made that the selection is a behavioral approach as 50% customers think the same.

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Purpose of having a card
The main purpose for a customer having a card is EMI, E-commerce & other services. Also
getting access to various offers are another big reason of having a card.

Satisfaction
Most of the customers think that they are Highly satisfied with the MBL card services.
According to the data, around 66% customers are satisfied or Highly satisfied.

Possibility of switching to another bank

The possibility of switching to another bank is very unlikely. According to the data we have,
The probability of switching to other banks is:

7/30 = 0.23, which means, it is significantly less.

Places of improvement
The most required place for improvement is the billing services. According to the data, as the
50% of the customers are highly satisfied with the services, but here we see, 33.33%
customers seek improvement in the billing services.

5. Conclusion
The usual caveats concerning generalizations from regionally-generated research is relevant
here. Because the data are limited both by geography and sampling frame, there is no
inherent guarantee that the same findings would be obtained in all the branches of MBL
bank.

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 Reference

1. “Differences in Consumer Purchase Behavior by Credit Card Payment System”,

ELIZABETH C. HIRSCHMAN, 2016
2. Website: www.mblbd.com
3. Website: mycashmbl.com
4. https://www.assignmentpoint.com/business/banking/genaral-banking-of-mercantile-
bank-limited.html

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