SWOT Mix and PESTEL Analysis: Effective Tools of Risk Management of Leasing Companies

The Millennium University Journal
Vol. 2, No. 1; 2017

ISSN 2225-2533
Published by The Millennium University
SWOT Mix and PESTEL Analysis: Effective Tools of Risk

Management of Leasing Companies
Dr. Md. Aminul Islam

Associate Professor of Accounting
Nawabganj Government College, Chapai Nawabganj, Bangladesh
E-mail: mdaminul1970@gmail.com
Abstract
SWOT mix and PESTEL scenario are considered to have impact on risk management practices of financial
institutions. Based on the data collected through questionnaire survey and annual reports of the sample companies,
the researcher has identified the strengths, weaknesses, opportunities and threats and also mentioned the possible
ways of addressing the weaknesses and countering the threats. Ways are indicated as to how strengths are matched
to opportunities to gain competitive advantage. The empirical study shows that an efficient SWOT and PESTEL
analysis will definitely help the companies develop an effective risk management framework that will keep all sorts
of risks within control.
Keywords: Formal Education, Non-Formal, Informal, Codification, Knowledge and Skills.
1. Introduction
As a developing country, Bangladesh needs huge investment in every sector of economy for achieving sustainable
growth. The commercial banks and stock markets had been the traditional sources of funds for investment in
Bangladesh. But these sources are not enough to meet the increasing demand of capital investment for industrial
development. In this backdrop, leasing companies came forward in 1980's to serve as an alternative source of
financing.
The Industrial Development Leasing Company Limited (IDLC) was the first leasing company of the Country
set up in 1985 under the regulatory framework of Bangladesh Bank. The company started operation in February
1986.1 IDLC was licensed as a financial institution by the Bangladesh Bank, following the enactment of the
Financial Institutions Act 1993. Another leasing firm, the United Leasing Company Limited (ULC), now called
United Finance Ltd., started its operation in 1989. Leasing companies, as organized in Bangladesh, are in operation
with the following objectives:
▪ To assist the development and promotion of productive enterprises by providing equipment lease financing
and related services;
▪ To assist in balancing, modernizing, replacement and expansion (BMRE) of existing enterprises;
▪ To extend financial support to small and medium scale enterprises;
▪ To provide finance for various agriculture equipment, and
▪ To activate the capital market by operating as managers to the issue, underwriters, or portfolio managers.2
Leasing companies in Bangladesh are now involved in wide range of activities in addition to conventional lease
financing. The functions performed are, Lease financing, Short-term financing, House-Building Financing;
Merchant Banking; and Corporate Financing. The products of leasing companies include lease finance, SME
finance, Term loan, revolving credit, bridge finance, project finance, working capital, syndication, consumer loan,
auto loan, women entrepreneur loan etc.3
1
IDLC Finance Ltd. , Annual Report 2012 (Dhaka :IDLC Finance Ltd.,2012), 9.
2
Sarahat S. Chowdhury, “Growth and Prospect of Leasing Industry in Bangladesh: A Study Based on
Performance Evaluation of Selected Leasing Firms,” International Journal of Advances in Management, Economics
and Entrepreneurship 1, no.05, (September, 2014): 01. Accessed July 25, 2015, online at: www.ijamce.info.
3
Ibid., 2.
1
www.themillenniumuniversity.edu.bd/journal/index.php/TMUJ The Millennium University Journal Vol. 2, No. 1; 2017
The leasing companies in Bangladesh are closely involved in stock market related activities such as issue management,
underwriting, trust management, private placement, portfolio management and mutual fund operations.4The industrial
sector of the economy depends quite heavily on leasing companies for different types of long- and short-term finances.
This contributed a lot behind robust growth of leasing business in Bangladesh. Leasing companies have been given
license and regulated under The Financial Institutions Act 1993 as Non-Bank Financial Institutions. Presently 32 NBFIs
are in operation, 3 are government owned, 10 are joint venture and the rest 19 are locally private-owned.5At the moment
out of 32 NBFIs, 23 are listed in DSE of which 20 are involved in leasing business. Leasing companies have been
providing diverse nature of financial services that involve different kinds of risk. SWOT and PESTEL analysis can play
important role in developing effective risk management mechanism for leasing companies in Bangladesh.
2. Risk Management Practices of Leasing Companies

In general term, risk is the element of uncertainty or possibility of loss that prevails in any business transaction, in any
place, in any mode at any time. Risk is an integral part of every business. It is inherent in all types of commercial
operations. Risk is defined as the variability of returns from those that are expected.6It has a very close relationship with
returns. The greater the variability of the expected returns, the riskier the project. Risk exists because of the inability of the
decision maker to make perfect forecasts.7 So, it needs to be managed properly. All business enterprises are exposed to
risk. But financial institutions like banks and leasing companies face some special kinds of risks because of their nature of
activities. The risks that are usually faced by leasing companies are credit risk, market risk, liquidity risk and operational
risk.8The main objective of the leasing companies is to maximize the shareholders wealth by providing various financial
services mainly by managing risk. Risk management is said to be the cornerstone of prudent financial services.9
So, the leasing companies always follow some prescribed rules and procedures of risk identification, risk
assessment and risk control which help them become more shock absorbent and risk resilient.
The Bangladesh Bank under its prudential regulatory guidelines advised all the banks and financial
institutions in Bangladesh to follow a structured framework for risk management. In recognition of the importance
of an effective risk management system, Bangladesh Bank issued guidelines on ‘Managing Core Risk of Financial
Institutions’ Five Core Risks are-Credit Risk, Asset and Liability/Balance Sheet Risk, Foreign Exchange Risk,
Internal Control and Compliance Risk and Money Laundering risk.10Leasing companies follow the Bangladesh
Bank Guidelines for managing core risk in addition to their own practices.
Basel-I Accord was promulgated in 1988 by Basel Committee on Banking Supervision to address mainly
credit risk. But it failed to fully address credit risk. As a result, Basel committee decided to draft a new version of
accord in 1999 which is known as Basel- II accord. Basel-II is recommendatory framework for banking supervision,
issued by the Basel Committee on Banking Supervision (BCBS) on June 2004. The objective of Basel-II is to bring
about international convergence of capital measurement and standard in the banking system.11 To cope with the
international best practices and to make the financial institutions capital more risk sensitive as well as more shock
resilient, “Guidelines on Risk Based Capital Adequacy for Banks (revised regulatory capital framework in line with
Basel-II") was introduced by Bangladesh Bank from January 01, 2009. The guidelines of RBCA have come fully into
force from January 01, 2010. The guideline is compulsorily followed by all commercial banks in Bangladesh. Basel-II
has been implemented in the NBFIs since January 01, 2012. Prudential Guidelines on Capital Adequacy and Market
Discipline (CAMD) have been issued by the Bangladesh Bank to promote international best practices and to make the
4
H.K. Mohajon, “The Lease Financing in Bangladesh: A Satisfied Progress in Business and Industrialization,”
International Journal of Finance and Policy analysis 4, no.1, (January 2012): 3. Retrieved from http://mpra.ub.uni-
muenchen.dc/50862 on July 7, 2015.
5
Ibid., 59.
6
James C. Van Horne and John M. Wachowicz Jr. Fundamentals of Financial Management, 11th ed. (New
Delhi: Prentice Hall of India, 2005), 95.
7
I M Pandey, Financial Management, 8th ed. (New Delhi: Vikas Publishing House PVT. Ltd., 2005), 574.
8
IDLC Finance Ltd., Annual Report 2012 (Dhaka: IDLC Finance Ltd., 2012), 28.
9
Bangladesh Bank, Guidelines on Risk Based Capital Adequacy for Banks (Dhaka: Bangladesh Bank, 2008),
01.
10
A R Khan, Bank Management: A Fund Emphasis (Dhaka: Brother’s Publications, 2008), 342.
11
L.R. Chowdhury, A Text Book on General Banking, 2nd ed. (Dhaka: L.R. Chowdhury, 2015), 342.
2
capital of NBFIs more risk-based as well as more shock resilient.12 NBFIs have to follow the guidelines as statutory
compliance.13
The Basel-II framework was introduced to ensure that financial institutions maintain adequate capital to
cover all types of risks not just credit risk as required in Basel-I. Basel-II accord dictates that financial institutions
should maintain capital to cover credit risk, market risk and operational risk. The Basel-II accord is based on three
pillar approaches which are as follows:
Pillar-1: it is about minimum capital requirement (MCR) to control risk factors.
Pillar-2: It is about supervisory Review Process (SRP) which is aimed at maintaining adequate capital to
control risk and building a robust risk management framework.
Pillar-3: It is about market discipline/disclosure requirement which is aimed at disclosing overall risk
position of the financial institutions.14
This accord outlines the level of capital required by financial institutions against various types of risk
including credit, market and operational risk based on risk profile of the organization. To make the financial
institutions capital more risks sensitive as well as to build the industry more shock absorbent and stable, Prudential
Guidelines on Capital Adequacy and Market Discipline (CAMD) for financial institutions were developed. The
instructions regarding minimum capital requirement, supervisory review process and disclosure requirement as stated in CAMD
guidelines have to be followed by all leasing companies for the purpose of statutory compliance Pillar-1 (Minimum Capital
Requirement): This is a calculation of minimum capital requirement considering different risk such as credit risk,
market risk and operational risk. According to Bangladesh Bank’s instruction, all financial institutions have to
maintain regulatory Capital Adequacy Ratio (CAR) at minimum 10% of Risk Weighted Assets (RWA) with core
capital (Tier-1) not less than 5% of RWA15.
Pillar-II (Supervisory Review Process): This pillar is based on the principle that capital adequacy is not just a
compliance matter and it is equally important that the financial institutions should have a robust risk management
framework. It has two key elements:
▪ A financial institution should develop an Internal Capital Adequacy Assessment Process (ICAAP)
▪ Supervisory Review of the internal capital assessment and the robustness of risk management process,
system and controls.16
Pillar-III (Market Discipline): Market discipline focuses on the effective public disclosures to be made by financial
institutions and it is a complement of the other two pillars. Effective disclosure is essential to ensure that market
participants can better understand financial institutions risk profiles and the adequacy of their capital.17 Implementation
of Basel-II in leasing companies enhances their managerial capabilities in risk management. All the leasing companies
have already established Basel Implementation Committees. Basel-II framework completely ignored the necessity of
SWOT and PASTEL analysis as tools of effective risk management. The present study emphasizes on conversion of
threats and weakness into strengths and opportunities that ultimately will contribute a lot in strengthening Prudential
Guidelines developed by the Bangladesh Bank in line with Basel-II framework for effective risk management of
leasing companies.
3. Literature Review
Leasing companies can be thought of as an alternative source of financing to meet the demand of capital for
investment. So, the sector warrants extensive study to explore different dimensions of leasing business in Bangladesh.
There were quite a few numbers of studies regarding leasing business in Bangladesh. But those studies lack in terms
of giving exposure on risk management practices along with SWOT and PESTEL analysis of leasing companies.
Jahur and Quadir (1998)18 evaluated the performance of some selected leasing companies in 1998 in terms
of operational performance and financial performance. They found that the leasing companies need to develop their
12
Bangladesh Bank, Prudential Guidelines on Capital Adequacy and Market Discipline for Financial
Institutions (Dhaka: Bangladesh Bank, 2011) 1.
13
Bangladesh Bank, Annual Report 2014-2015 (Dhaka: Bangladesh Bank, 2015), 63.
14
Institutions (Dhaka: Bangladesh Bank, 2011) 1-2
15
Ibid.,5.
16
Institutions (Dhaka: Bangladesh Bank, 2011) 2.
17
Ibid., 2
18
Mohammad Saleh Jahur and S.M. Nasrul Quadir, “Performance Evaluation of some Leasing Companies in
Bangladesh,” The Chit6tagong University Journal of Commerce 14, (1998): 187-206.
3
professionals and should come in the market with new strategies. They suggested legal reforms in order to make
leasing more competitive and acceptable. Despite risk management has close relations with performance; it was not
discussed in the paper.
Islam (1999)19 in his study, attempted to explore the historical background of leasing business, the
advantages and disadvantages of lease financing in 1999. He also identified the strength and weakness of leasing in
his study. He advocated adopting IAS-17 to bring about harmonization in lease reporting. He opined that
competition in the leasing market would be the main challenge for leasing companies in future. He mainly used case
study method where he studied IDLC, ULC and PLC to comment about the strength, weaknesses and problems of
leasing companies in Bangladesh but impact of SWOT mix on risk management was not highlighted.
Chaudhury (1999)20 discussed non-bank financial institutions as the new trend in financial system of Bangladesh in
1999. He identified inadequacy of legitimate and regulatory structure as the main problem of the sector. He also
observed that lack of coordination among different regulatory agencies hampers development of the sector.
Islam, Bhuiyan and Rounak (2009)21 examined lease financing business in Bangladesh in 2009 with special
reference to IDLC Finance Ltd. They detailed types of leasing objectives, functions of leasing companies and
problems faced by leasing companies in Bangladesh. They also identified the factors contributing to the
development of leasing business in Bangladesh. But the study did not cover the risk management practices of
leasing companies. They mainly analysed ROA, ROE, NPAT, EPS etc. to show the performance of IDLC Finance
Ltd.
Ahmed, Pandit and Hossain (2013)22 undertook an extensive study on operational risk management in
banks in 2013 that explored different dimensions of operational risk. They identified that operational risk
management in Bangladeshi financial institutions was heavily dependent on capital maintenance rather than
focusing on other mitigation techniques such as insurance, disaster recovery systems, business continuity plans etc.
They also emphasize the need for a strong database to move from simpler approach to advanced approach of risk
management.
Chowdhury (2014)23 in his study analyzed the financial performance of some selected leasing companies in
Bangladesh in 2014 on the basis of growth percentage and ratio analysis of some company specific variables. He tried
to shed light on the determinants of net profitability of selected leasing companies. He used regression analysis between
net income and some variables like operating income, operating expense, lease and advances, deposits and branches.
He also tried to focus on the future prospects of leasing industry in Bangladesh. He observed that political stability and
overall economic development were the pre-condition for the smooth growth of the sector. His research was based on
published financial statements of selected companies, i.e., he used only secondary data. He purposively selected 7
companies out of the population of 22. He also used some information from Bangladesh Bank and Bangladesh
Securities and Exchange Commission. The collected data were analyzed through various statistical measures like
growth percentage, regression, correlation coefficient etc.
Rahman, Rahman and Azad (2015)24 that there are variations in understanding of risk (risk awareness), using
risk management techniques as well as mitigation techniques between conventional banks and Islamic banks. They
explored that conventional banks used advanced methods of risk identification, risk management, and risk mitigation
but the Islamic banks gave more emphasis on traditional methods as they have shortage of qualified bank officials. A
19
Muhammad Azizul Islam “Growth and Development of Leasing Business in Bangladesh: An Evaluation,”
Khulna University Studies 1 no. 2, (December, 1999):311-317.
20
Abdul Jalil Chaudhury, “An Appraisal of Non-Bank Financial Institutions in the context of Economic
Development of Bangladesh,” Bank Parikrama XXIV, no. 1 (March, 1999): 171-194.
21
Mohammed Nazrul Islam, Mohammad Badruzzaman Bhuiyan and Nafisa Rounak, “Lease Financing
Business in Bangladesh: A Study on IDLC Finance Ltd.,” The Bangladesh Account 63, no.34 (April-June, 2009):
21-29.
22
Md. Nehal Ahmed, Atul Chandra Pandit, and Md. Zakir Hossain, “Operational Risk Management in Banks:
Issues and Implications,” Banking Research Series 2013, A Compilation of Research Workshop Keynote Papers,
Bangladesh Institute of Bank Management, (July 2014), 67.
23
Sarahat S. Chowdhury, “Growth and Prospect of Leasing Industry in Bangladesh: A Study Based on
Performance Evaluation of Selected Leasing Firms,” International Journal of Advances in Management, Economics
and Entrepreneurship 01, no.05 (September, 2014):01-13. Accessed July 25, 2015, online at: www.ijamce.info.
24
Muhammad Mahbubur Rahman, Md. Azizur Rahman, and Md. Abul Kalam Azad, “Risk Management
Practices in Islamic and Conventional Banks of Bangladesh: A Comparative Analysis,” Asian social science 11, no.
18 (June, 2015): 153-163. doi:10.5539/ass.v11n18p153
4
total of 14 commercial banks were purposively selected, 7 each from conventional and Islamic banks for study. Only
people associated with risk management were made the respondents and data were collected by structured
questionnaire. The sample size was 140. The collected data were analyzed to know risk management practices, risk
management techniques and risk mitigation procedures.
Chowdhury (2015)25 emphasised the necessity of risk management and risk-based supervision in financial
institutions in Bangladesh perspective. According to him, risk-based supervision is an important part of overall risk
management of a banking or financial system. Risk-based supervision is a process used by the regulatory authority
to evaluate the ability and success of financial institutions to identify measure, monitor and control credit risk,
interest rate risk, liquidity risk, operational risk, foreign exchange risk, compliance risk and reputational risk. He
mentioned that in the framework of risk-based supervision, the supervisors needed to identify the key risks that
financial institutions face and assess the significance of those. He argued for strong corporate governance system for
effective risk-based supervision. He also advocated for risk-based supervision as an integral part of overall risk
management of financial institutions that can make financial sector sound, stable and risk resilient.
Alam and Mahmud (2015-16)26 evaluated the performance of some selected NBFIs in 2015-16 based on
annual report data over a six-year period of time. They examined the trends of investments, lease & loans, total
assets, total liabilities, profit after tax, return on equity and return on assets as the indicators of performance. They
found Profit after Tax was not as good as expected; the ROE and ROA were not also as good as expected.
Performance has close relationship with risk management which was not highlighted in the paper.
Ahmed (2016)27discussed in detail different dimensions of business risk management of enterprises.
According to him, awareness of risk needs to be increased as the business environment has become less stable these
days. Since, consequences of risk management failure can be dire, it is necessary to develop and incorporate a
strong, consistent, effective and a holistic risk management programme in the strategic planning and control which
can mitigate and manage risk. He emphasized on risk identification, risk assessment and finding ways of avoiding
and reducing risks. He mentioned that business risk management should form an integral part of strategic planning
and control.
SWOT mix of leasing companies and their probable impact on risk management and financial performance
of leasing companies was not considered in any of the literature reviewed. The present study emphasizes on
identification of proper success factors, weakness factors, opportunities available and challenging issues thereon
along with possible impact on risk management practices of leasing companies of Bangladesh.
4. Theoretical and Conceptual Framework

SWOT is the acronym of strength, weakness, opportunity and threat. SWOT analysis is a technique of analysing the
business in terms of its strengths, weaknesses, opportunities and threats. It is basically performed for the products
and services produced by the organisation and for the markets it operates in for future growth. The SWOT analysis
helps the business identify its strengths & weaknesses and opportunities & threats present in the sector it operates in.
Strengths and weaknesses are internal factors over which the business has control and these can be managed by the
organisation to attain the objectives and to survive in the industry it belongs to28.Strength is the characteristic of
business that has huge favourable implications. It gives the business a kind of competitive edge over others.
Strengths should be exploited properly for achieving growth and objectives of the business. It includes adequacy of
capital, efficient human resources, loyal customer base, technology and other precious resources. Weaknesses are
the factors associated with the products and services of the organisations that have adverse impacts on the growth
and profitability of the business. Weaknesses put the business at disadvantageous situations as compared with the
competitors. High employee turnover, high cost of funds, ineffective risk management, lower productivity etc. are
the weaknesses of the business. Opportunities and threats are external factors on which the organisations have no
control.29
Opportunities are the external factors that arise due to the changes in market, technology, government
policies etc. These factors can have positive implications on growth and therefore, should be exploited properly for
25
Shitangshu Kumar Sur Chowdhury, “Risk Management and Risk-based Supervision: Some selected Issues and
Bangladesh Perspective,” Magazine of the Ansar –VDP Unnayan Bank, September 2015, 54-60.
26
Shah Alam and Appel Mahmud, “Performance Evaluation of Non-Bank Financial Institutions of Bangladesh:
A Trend Analysis,” Journal of Business Research 1, no.1 (December 2015-16): 55-64.
27
Md. Mustaq Ahmed, “Importance of Business Risk Management (BRM) to Strategic Planning and Control,” The
Bangladesh Accountant (January-March, 2016): 72-79.
28
Philip Kotler, Marketing Management, 11th ed.(New Jersey: Prentice Hall., 2003), 104
29
Ibid 102
5
the growth and profitability of the business30. Ample investment opportunities, availability of market information,
competitions in the market etc. can be regarded as the opportunities of the business.
Threats refer to the possible risks that originate from external factors which are out of control of the organisation.
These elements can cause havoc for the business31. Every business organisation need to have contingency plans to counter
these threats. Changes in government policies, emergence of new technologies, economic recession, political unrest, drastic
price reduction by the competitors etc. can be regarded as threats for the business. For attaining the objectives of the business,
it is absolutely necessary to incorporate the SWOT mix in the strategic plans of the business. Two methods are in use for
applying the results of SWOT analysis to strategic decisions. Those are referred to as “Matching” and “converting”32.
Matching: In this method, strengths are matched to opportunities to gain competitive advantage. For
example, surplus funds of a company can be efficiently allocated for new investment opportunity that helps the
company grow further.
Converting: Here, threats and weaknesses are converted into strengths and opportunities respectively.
PESTEL analysis is a framework or tool used for analysis of various macro-economic factors which have
impact on the performance of the organisation. The result of PESTEL analysis is of use to identify threats and
weaknesses of the organisation which are important factors considered in SWOT analysis. Every business
organisation has to operate in an external environment which is composed of several dimensions like political,
economic, social, technological, environmental and legal dimensions33. PESTEL analysis encompasses all these
dimensions. PESTEL is the acronym of the previously mentioned dimensions of external environment within which
a company has to operate. It is used when the company launches a new product or explores a new route to a market
or sells product or services in a new country or region.
5. Statement of the Problem

Since leasing companies operate in the financial service industry, they are exposed to several risks both internally as
well as externally. To safeguard the organization’s resources from these risks, the companies need to develop proper
risk management framework as a strategic response which requires detailed SWOT and PESTEL analysis. Very few
leasing companies are found to use SWOT and PESTEL analysis to develop risk management framework to address
the threats of different types of risk. The present study is expected to contribute a lot in this regard.
6. Objectives of the Research

The general objective of the study is to assess the practices of the sample companies regarding use of SWOT and
PESTEL analysis as tools of risk management. The specific objectives are:
▪ To trace the major challenges of leasing companies along with their inherent strength, weakness and
opportunities;
▪ To analyses the impact of SWOT mix on the risk management of leasing companies;
▪ To assess the PESTEL scenario of the sample companies;
▪ To assess the perceptions of the executives of the sample companies regarding SWOT mix;
▪ To develop the strategic response for addressing the weaknesses and countering the threats;
7. Methodology of the Research

Both purposive and random samplings were followed in the study. 11 Companies were selected purposively and
branches of the companies were selected randomly by using Probability Proportional to Size (PPS) sampling. 11
selected companies have 94 branches. To ensure adequate representation, 47 branches of the selected companies
were chosen through Probability Proportional to Size (PPS) sampling (50% of the total number of branches).
The study used both primary and secondary data. Primary data were the opinions and ideas of the executives
and branch managers. Secondary data were the publications of the companies (mainly annual reports). Four executives
from Head Office of each company and two officials including the branch manager of each of the branches were
requested to respond to the questionnaire. The respondents were 138 in number.
Since leasing companies operate in the financial service industry, they are exposed to several risks both
internally as well as externally. To safeguard the organisation’sresources from these risks, the companies need to
develop proper risk management framework as a strategic response which requires detailed SWOT analysis. The
30
Ricky W. Griffin, Management , 7th ed. (Boston, New York : Houghton Mifflin Company, 2002), 233
31
Ricky W. Griffin, Management , 233
32
P. Kotler, K.L. Keller, M. Brady, M. Goodman and T. Hansen, Marketing Management (New Jersey: Pearson
Education Inc., 2009), 125.
33
Ricky W. Griffin, Management, 72-75.
6
perceptions of the executives of the sample companies regarding SWOT mix are statistically shown in the following
pages. Data regarding this were collected from primary sources by questionnaire survey. The respondents were
requested to specify their level of agreement on each statement in a five-point Likert scale, being 1=Strongly Disagree,
2=Disagree, 3=Neutral, 4=Agree, 5=Strongly Agree. Some secondary information was also taken from the annual reports
of sample companies.
8. Techniques of Analysis
The collected data were analysed by using SPSS and results were presented in terms of mean, standard deviation and
coefficient of variation. One of the major objectives of the study is to trace the major challenges of leasing companies
along with their inherent strength, weakness and opportunities. The researcher has identified strengths, weaknesses,
opportunities and threats of leasing companies by rigorous study of related literature and by holding discussions with
the high officials of the sample companies.
9. Major Findings of the Study

Table 1: Responses to the strengths
Items Mean Maximum Minimum Standard Ranking on the
Score Deviation basis of mean
Score
Strength
The company has adequate funds to 4.22 5 2 .82 1
undertake new ventures.
The company has a very effective 4.21 5 2 .68 2
internal control system.
The company practices participatory 3.85 5 2 .85 4
management approach that ensures
cordial working environment.
Reduced rate of interest on loan and 3.68 5 2 .94 5
deposits.
Adequate refinancing facilities of 4.11 5 2 .70 3
Bangladesh bank
Average 4.01
Source: Questionnaire survey
Identification of strengths of companies is a crucial issue as it helps optimum utilization of resources. The
researcher identified a total of five strengths of leasing companies which were listed in the personally administered
questionnaire and the respondents were asked to give their responses. Table1 shows that the mean scores of
responses to the strengths are in between 4.22 to 3.68 and the average of the mean scores is 4.01 which is more than
the mid-point of five-point Likert scale. It indicates that the respondents also acknowledge the points mentioned in
Table-1 as the strengths of leasing companies. Highest mean score of responses of 4.22 is found with the company’s
adequacy of funds to undertake new venture. So, it is the major strength of leasing companies. The second highest
mean score of 4.21 is found with the existence of effective internal control. So, effective internal control is the next
important strength of leasing companies as it plays pivotal role in risk management. Then the respondents prioritized
adequate refinancing facilities of Bangladesh Bank, participatory management practices for cordial working
environment and reduced rate of interest on loans and deposits as the strengths of leasing companies which is clearly
reflected in the rank column of Table1. Standard deviations of responses to the identified strengths are less than one
indicating less variation from the mean as well as greater stability in strength.
Table 2: Responses to the Weaknesses

Weaknesses Mean Maximum Minimum Standard Ranking on the
Score Deviation basis of mean Score
Cost of funds of your company is 3.87 5 1 1.24 1
high.
Your company has high employee 2.10 4 1 .80 5
turnover.
7
Workers and employees of your 1.75 3 1 .52 7

company are not very cooperative.
Productivity of your company is not 1.76 3 1 .58 6
high.
Risk management of your company 2.18 5 1 .96 4
is not that much effective.
Inadequate publicity and 2.80 4 1 1.09 3
advertisement.
Provision for controlling director’s 3.30 5 1 1.34 2
loans is inadequate.
Average 2.54
The researcher identified seven weaknesses of leasing companies and those were listed in the questionnaire.
The respondents were asked to provide their responses to the weaknesses in a five-point Likert scale. It is evident in
Table-2 that the mean responses to the weaknesses are in between 3.87 to 1.75 and the average of the means is only
2.54 which is much lower than the mid-point of the five-point Likert scale. It indicates that the respondents do not
agree fully with the researcher regarding the weaknesses of leasing companies. The findings clearly show that only
two weaknesses namely cost of funds of leasing companies are high and provisions of controlling director’s loans is
inadequate have got mean scores of responses of more than 3. It indicates that the above mentioned two weaknesses
are the most visible among the leasing companies.
Table 3: Responses to the opportunities

Opportunities Mean Maximum Minimum Standard Ranking on
Score Deviation the basis of
mean Score
There is ample investment 3.96 5 2 .93 4
opportunity.
Availability of trained human 4.08 5 2 .86 3
resources in the market.
Market information is available. 3.71 5 2 .77 5
Demand of funds is very high. 3.59 5 1 1.05 6
Fair competition in the market. 4.28 5 3 .75 2
The country has perfect capital 2.16 5 1 1.01 7
market.
Prospect of further growth is 4.32 5 3 .72 1
high.
Political stability in the country. 1.90 5 1 .67 8
Average 3.50
Every business organisation need to identify opportunities that can be explored for achieving wealth
maximisation objective of the business. Leasing companies are no exceptions. The researcher identified a good
number of opportunities of leasing companies that can be tapped for the profit and wealth maximisation. The
opportunities were listed in the questionnaire for the responses of the company executives in a five-point Likert
scale. The mean scores of responses to the opportunities mentioned in Table-3 are in between 4.32 to 1.90 and the
average of the mean scores is 3.50 which is well above the mid-points of five-point Likert scale. It indicates that the
respondents are in agreement with the researcher regarding opportunities of leasing companies. The highest mean
score of responses of 4.32 is found with prospect of further future growth which is really compatible with the
national growth rate of the economy. Since, the economy has been growing at the rate of more than 6%, the leasing
companies will definitely have various new investment opportunities which will help the sector grow further. The
second and third highest mean scores of responses of 4.28 and 4.08 are found with market competition and
availability of trained human resources respectively. Other opportunities are prioritized as ample investment
opportunities, availability of market information, high demand of funds etc. The respondents do not admit that the
8
capital market in Bangladesh is perfect and the country has political stability which is reflected from their responses
shown in Table-3. So, those two items are not in a position to be accepted as the opportunities for leasing companies at
the moment. The standard deviations of responses to all the opportunities indicate less variation from the mean scores
which indicates greater stability in opportunities.
Table 4: Responses to the threats

Threats Mean Maximum Minimum Standard Ranking on the
Score Deviation basis of mean
Score
Vulnerable risk environment. 3.71 5 1 3.41 5
Unfavourable monetary 3.38 4 1 .73 7
policy.
Diversion of funds to the 3.99 5 1 1.01 2
sector which is not meant for.
Unfair competition. 3.94 5 1 .75 3
Natural calamities. 3.94 5 1 .73 4
Lack of congenial investment 4.19 5 1 .73 1
climate.
Unfavourable fiscal policy. 3.41 5 1 .79 6
Average 3.79
The leasing industry as a whole is faced with some challenges/threats which are pointed out and set in the
questionnaire by the researcher for responses of the respondents in a five-point Likert scale. The results of responses
are shown in Table -4. The mean scores of responses to the threats are in between 4.19 and 3.38 and the average of
the mean scores is 3.79 which is more than the mid-point of five-point Likert scale. It is an indication that the real
threats of leasing companies have been identified. The highest mean score of responses of 4.19is found with lack of
congenial investment climate followed by diversion of funds with a mean score of 3.99. These two are the biggest
challenges faced by the leasing companies. Other threats according to ranking are unfair competition, natural
calamities, vulnerable risk environment, and unfavorable fiscal and monetary policies.
Table 5: Indicators of Strength and Weakness of Leasing Companies Based on Secondary Data
Strengths Weaknesses
Indicators of Strength 10 Year Average Result Indicators of 10 Year Average
Weakness Result
Equity Growth 25.46% Growth of Classified Loans 53.98%
Asset Growth 25.57% NPL Ratio 6.67%
Deposit Growth 33.94% Cost of Fund 12.41%
Investment Growth 74.99%
Value Added Growth 65.25%
Avg. ROA 3.07%
Avg.ROE 16.12%
Avg. Operating Ratio 32.36%
Source: Researcher’s own calculation from data provided in annual reports of sample companies.
Table-5 demonstrates the indicators of strength and weakness of sample companies based on 10-year data.
Average investment growth for the study period was 74.99% which indicates ample investment opportunities. Other
indicators show very good figures representing stability of strengths for the sample companies. On the other hand,
average growth of classified loans for the sample companies is 53.98% which is extremely high indicating high
credit risk for the sector as a whole. The average non-performing loan ratio and average cost of fund are 6.67% and
12.41% respectively which are very high indicating weakness of sample companies in credit risk management.
9
10. SWOT Analysis of IDLC Finance Ltd as the Bench-mark

IDLC Finance Ltd. holds the top position among the sample companies in respect of most of the dimensions in
general and risk management in particular. So, SWOT analysis of IDLC Finance Ltd. as a strategic response to risk
factors can be regarded as the bench-mark for the other companies in the industry. In this segment of the study, the
SWOT analysis of IDLC Finance Ltd. is discussed in detail as follows
Table 6: Factors Narrating the Strengths

Strengths Strategic Response
The IDLC as a brand. IDLC continues to invest in the brand to strengthen
its image as a responsible and reputed NBFI.
Need based products and superior service Continues innovation in products and services.
standards.
Quick decision making. Investment in process and technology for achieving
stronger efficiency in this regard.
Transparent and ethical. Train the new recruits on the code of ethics and
values.
Training, counseling and business facilitation Launch new non-financial services and expand the
services. horizon for existing business facilitation services.
Strategically located branches. Continue to expand strategically by covering
unreached regions and populations.
Uninterrupted service delivery infrastructure Continue investments in process and technology to
achieve superior efficiency; enable higher levels of
process automation.
Stringent regulatory adherence Continue to abide by the law of the land in both letter
and spirit.
Collaborative and proactive approach towards Continue to collaborate with the regulators, peers and
regulatory and industry reform initiatives. other industry participants and adopt best practices.
Respectable institutional shareholding; experienced Continuous efforts to make best use of experience of
and professional Board of Directors and visionary the Board and management.
management.
Competent and empowered human resources. Continue investing in people as they are the principal
driving force of the company.
Focused on continuous training and development. Continue need-based training programmes and
promote leadership from within.
Highest levels of integrity. Educate new employees on IDLC moral codes, values
and ethics.
A wining culture fostered through years of Continue to innovate and improve; continue to
embracing best-in-class practices. uphold the culture of trying new things without the
fear of failure.
Solid capital base. Increase capital through the right issue to further
strengthen the capital base which will strengthen the
growth platform.
Efficient asset-liability management. Continue good practices, utilise bonds to minimise
asset-liability mismatch.
Sound and steady ROA and ROE. Continue to deliver superior financial results and
maintain shareholder return.
Table 7: Indicators of Basic Weaknesses

Weaknesses Addressing the weaknesses
Dependence on interest income as a major Introduce fee-based services. Continue to diversify through
revenue source- a limitation of being an NBFI. subsidiaries –IDLCIL, IDLCSL and IDLCAML. Introduce
fee-based products like “Easy Invest” among others.
Dependence on term lending in the absence of Continue innovating new products and focus on the
transactional accounts- a limitation being an niche market.
10
NBFI.
Portfolio concentration in Dhaka and adjacent Continue to grow the loan portfolio in the distant
areas as most of the distant branches are branches. Continue to focus on SME. Reach new areas
established in the last 4-5 years. with home loan products to build a sustainable portfolio.
Table 8: Available Opportunity Factors

Opportunities Capitalising on opportunities
Providing 360-degree financial services With the establishment of asset management business, IDLC will
to all customer segment- deposit have full range of wealth management services to offer through
products, loans, brokerage, investment its subsidiaries. IDLC also expect to capitalise on the reputation
management and advisory. of the IDLC brand to offer customers customised and
comprehensive financial solutions.
Green financing Endeavour is on to tap the benefits of this new concept of
financing. IDLC has already established Green Banking Unit for
ensuring sustainable development and preservation of
environment.
Opportunity for co-branding and IDLC always emphasize on building partnership with competent
business partnership. parties to reap the benefits for the shareholders.
Table 9: Exposure of Threats

Threats Countering threats
Intense competition in corporate lending driving Continue providing best-in-class services to all
commercial banks to focus more on SME and customers.
consumer financing.
New industry entrants providing stiff competition Innovate, automate and invest to reduce loan TAT
further.
Excess liquidity and lack of investment Chose customer/market segments carefully by
opportunities driving sector participants towards identifying niche opportunities.
unhealthy price wars to grab the best customers. Extend the presence of IDLC to all parts of the
country. Create a market for home loan and continue
to invest in supplier finance.
Promote fee-based products like “Easy Invest” more.
Source: Annual Report (2015) of IDLC Finance Ltd.
By going through the SWOT analysis of IDLC Finance Ltd. it is clear that various risk factors associated
with the business of IDLC can be reduced to a considerable extent by using the analysis. So, the experience of IDLC
can be of immense value for other companies in the industry.
Table 10: SWOT Mix and Its Impact on operational Performance of Leasing Companies
(Based on analysis of primary data and practices of IDLC Finance Ltd)
Strengths Impacts
Adequate funds to undertake new venture. May help the company grow further and maximise
shareholder’s value.
Effective Internal Control May help reduce credit and operational risk to great extent.
Adequate refinancing facilities of Bangladesh Reduce reliance on costly bank financing.
Bank.
Participatory management approach for May help achieve organisational goals smoothly.
cordial working environment.
Reduced rate of interest on loan and deposit. May help increase spread and maximise return.
Stringent regulatory adherence. May minimise all kinds of risks.
Training, counseling and business facilitation May help increase fee-based income and expand the
services. business.
Continuous training and development. May help reduce risks and improve performance.
11
Efficient asset-liability management. May enable the companies reduce liquidity risk and market
risk.
Uninterrupted service delivery infrastructure. May enable the companies to render efficient services and
maximise return to the shareholders.
Quick decision making May help the companies reap the benefits of new
opportunities.
Need based products and superior service May help capture greater market share and maximise
standards. shareholder’s value.
Transparent and ethical. May help develop good image as well as good brand.
Weaknesses Impacts
Cost of funds is high. Spread will be lower and therefore profitability will also be
lower.
Provisions for controlling director’s loans are May result in excess credit risk.
inadequate.
Dependency on interest income as a major May increase credit risk.
revenue source.
Dependency on term lending. May increase credit risk as the loans given may become
bad.
Portfolio concentration in Dhaka and adjacent The company cannot take the benefits of investing in other
areas. areas of the country.
Opportunities Impacts
Prospect of further growth is high. May help expand the business and increase
shareholder’s value.
Competition is there in the market. May help the company increase efficiency.
Availability of trained human resources in the The companies can reduce operational risk to
market. considerable extent by recruiting trained human
resources.
There are ample investment opportunities. The companies can grow further by diversifying
investment portfolio.
Market information is available. May help the companies make correct investment
decisions.
Demand of funds is very high. May promote term lending and increase interest
income.
Providing financial services to all customer segment- May help achieve diversifications and maximise
deposit products, loans, brokerage, investment return to the shareholder’s value.
management and advisory.
Green financing May ensure sustainable development, preservation
of environment and harness the benefits of that new
concept of financing.
Threats Impacts
Vulnerable risk environment. May create adverse impact on performance.
Diversion of funds to the sector which is not meant for. May aggravate credit and liquidity risk.
Unfair competition. May result in adverse impact on performance.
Natural calamities. May result in loss of investment and loss of
income.
Lack of congenial investment climate. May prevent the companies to grow further.
Intense competition in corporate lending driving The leasing companies are supposed to lose
commercial banks to focus more on SME and consumer market share to commercial banks and
financing. experience reduction in income.
New industry entrants providing stiff competition Older companies are supposed to lose market
12
share to the new entrants.

Excess liquidity and lack of investment opportunities May result in Opportunity cost, reduction of
driving sector participants towards unhealthy price wars interest spread and loss of profitability.
to grab the best customers.
Source: Questionnaire Survey and Annual Reports of Sample Companies.
11.Addressing the Weaknesses and Countering the Threats

Weaknesses Addressing the weaknesses
Cost of funds is high. The leasing companies need to introduce low cost deposit products to
mobilise funds.
Provisions for controlling director’s Stringent regulatory guidelines should be framed to control director’s
loans are inadequate. loans.
Dependence on interest income as a Introduce fee-based services.
major revenue source.
Dependence on term lending. Continue innovating new products and focus on the niche market.
Portfolio concentration in Dhaka Continue to grow the loan portfolio in the distant branches. Continue
and adjacent areas. to focus on SME. Reach new areas with home loan products to build
a sustainable portfolio.
Threats Countering Threats

Vulnerable risk environment. Follow regulatory guidelines and adopt risk mitigation
techniques.
Diversion of funds to the sector which is not Frame new rules to prevent this practice.
meant for.
Unfair competition. Regulators like Bangladesh Bank and BSEC need to
provide necessary guidelines to ensure level playing field
for the banking companies as well as leasing companies.
Natural calamities. Take sufficient insurance coverage to compensate direct
loss and consequential losses.
Lack of congenial investment climate. Government need to ensure political stability and
discipline in financial sector that will create proper
investment climate.
Intense competition in corporate lending Continue providing best-in-class services to all customers.
driving commercial banks to focus more on
SME and consumer financing.
New industry entrants providing stiff Innovate, automate and invest to reduce loan TAT further.
competition
Excess liquidity and lack of investment Chose customer/market segments carefully by identifying
opportunities driving sector participants niche opportunities.
towards unhealthy price wars to grab the best Extend the presence of the company to all parts of the
customers. country. Create a market for home loan and continue to
invest in supplier finance.
Promote fee-based products like “Easy Invest” more.
12.PESTEL Scenario of Sample Companies

PESTEL is the acronym of political, economic, social, technological, environmental and legal dimensions within
which a company has to operate. It is used when the company launches a new product or explores a new route to a
market or sells product or services in a new country or region.
13
Table 11: PESTEL Analysis for Sample Leasing Companies

Macro-economic Factors Impact on the Industry Strategic Responses
Political Factors: The business of sample leasing The sample companies need to focus on
Political stability ensures congenial companies gets momentum for good loan portfolio, continuous loan
investment climate which is a pre- stable political environment and monitoring, and investment friendly
requisite for growth and credit and operational risk may environment.
development of every business reduce. But all the companies
organisation. should put efforts to keep non-
performing loans within tolerable
limit.
Economic Factors: Credit growth in private sector The sample companies need to grow in new
Bangladesh consistently maintained will increase and leasing areas like SME financing, IT sector and agro
over 6% growth rate of GDP during companies will be able to get rid based products to take the advantages of
last five years. In spite of political of excess liquidity by strong GDP growth. Expansionary monetary
turmoil, the country’s GDP grew diversifying their investment policy of the government will create new
6.55% in 2014-2015 fiscal year. A portfolio. The companies will avenues for financing and the sample
strong growth of GDP is expected get the benefits of investments companies need to capitalise on that. But they
in the coming years. made in the prior years. have to make sure that there is adequate
system to control risks.
Social Factors: The business of leasing The rise of the middle-class with strong
Bangladesh has already crossed the companies will be greatly purchasing power will create ample
threshold of lower middle-income affected as it is necessary to take opportunities for consumer financing
status in 2015 and is on the track of into account the customer needs including home-loans. The sample
becoming middle income country and demands and accordingly, companies need to capitalise on this
by 2021. The standard of living has quality of financial services opportunity with wide range of products
improved a lot and a huge market is need to be improved. and services.
on the making for the newly
achieved purchasing power.
Technological Factors: To cater the needs of the The companies must develop efficient
With the emergence of internet and sophisticated customers, huge human resource so that they can reap the
digitised service facilities, investment will be required in benefits of digitisation to the fullest
customers have become much more technology to keep pace with extent. Capable internal control system
sophisticated globally as well as in the competitors. Operational risk needs to be developed to reduce the
Bangladesh. may originate for the failure of operational risks that exist in the digitised
the technology. world.
Environmental Factors: The regulators like Bangladesh Some of the NBFIs like IDLC have
Financial service industry around Bank, BSEC etc. Will frame already established green banking units
the globe is increasingly new regulatory guidelines for for ensuring sustainable development in
emphasizing on green and the financial institutions for this regard. Other companies also need to
environment friendly business. sustainable financing. respond positively to this new concept of
Bangladesh Bank has already financing.
earmarked separate funds for
green financing offers that can
be availed of by the sample
companies.
Legal Factors: The leasing companies will have The companies need to employ separate
Financial service industry is faced to focus on adequate compliance team to look after different
with tighter rules and regulations provisioning of loans and compliance issues. They also need to keep
and their applications these days. ensuring capital adequacy to continuous contact with the regulators for
The regulators are applying absorb the shocks of various ensuring compliance.
stringent rules to ensure level risks.
playing field and to guard against
financial frauds.
Source: Researcher’s own analysis by going through annual reports of sample companies and other published
materials.
14
13. Conclusion
Adequacy of funds and effective internal control were identified as the main strengths whereas high cost of funds
and inadequate provision of controlling director’s loans were the main weaknesses. Prospect of future growth,
market competition and availability of trained human resources are the opportunities and lack of congenial
investment climate and diversion of funds are the biggest threats of leasing companies. From the discussions made
so far regarding SWOT Mix and PESTEL analysis of leasing companies it is clear that SWOT Mix and PESTEL
both analyses have considerable impact on risk management practices of leasing companies. Based on the data
collected through questionnaire survey and annual reports, the researcher has mentioned the possible ways of
addressing the weaknesses and countering the threats. An efficient SWOT and PESTEL analysis will definitely help
the companies develop an effective risk management framework that will keep all sorts of risks within control.
References
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Islam, Muhammad Azizul. “Growth and Development of Leasing Business in Bangladesh: An Evaluation.” Khulna
University Studies 1 no.2 (December 1999): 311-317.
IDLC Finance Ltd. Annual Report 2010-15. Dhaka: IDLC Finance Ltd. 2010-15.
International Leasing and Financial Services Ltd. Annual Report 2010-15. Dhaka:2010-15.
Jahur, Mohammad Saleh, and S.M. Nasrul Quadir. “Performance Evaluation of some Leasing Companies in
Bangladesh.” The Chit6tagong University Journal of Commerce 14, (1998): 187-206.
Khan, A.R. Bank Management A Fund Emphasis. Dhaka: Brothers Publication, 2008.
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Education Inc., 2009.
Kotler, Philip.Marketing Management. 11thed. New Jersey: Prentice Hall, 2003.
Lanka-Bangla Finance Ltd. Annual Report 2010-15. Dhaka:2010-15.
Mohajan, H.K. “The Lease Financing in Bangladesh: A satisfied Progress in Business and Industrialization”.
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Premier Leasing and Finance Ltd Annual Report 2010-15. Dhaka: 2010-15.
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Rahman, Muhammad Mahbubur, Md. Azizur Rahman, and Md. Abul Kalam Azad. “Risk Management Practices in Islamic and
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Appendix
Questionnaire
On
SWOT mix and PESTEL Analysis: Effective Tools of Risk Management of Leasing Companies
For Executives (Head office & Branch Level)
(Assalamu-alaikum, I the undersigned, associate professor, accounting ,Nawabganj Govt. College, Chapai Nawabganj,
requests for your kind cooperation for providing information on the above mentioned research topic. Assurance is
given that the information will be used only for academic purpose and strict secrecy will be maintained.)
1. Respondents Particulars:
a) Name of the respondent:
b) Designation:
c) Education:
d) Experience:
e) Training:
f) Division/Department and name of the company:
Information regarding SWOT mix:(Please put tick mark in the box.)
SN Items SD D N A SA
1➢ Strength
a) Your company has adequate funds to undertake new ventures.
b) Your company has a very effective internal control.
c) Your company practices participatory management approach that ensures cordial
working environment.
d) Reduced rate of interest on loan and deposits.
e) Adequate refinancing facilities of Bangladesh bank
2➢ Weakness
a) Cost of funds of your company is high.
b) Your company has high employee turnover.
c) Workers and employees of your company are not very cooperative.
d) Productivity of your company is not high.
e) Risk management of your company is not that effective.
f) Inadequate publicity and advertisement.
g) Provision for controlling director’s loans are inadequate.
3➢ Opportunities
a) There are ample investment opportunities.
b) Availability of trained human resources in the market.
c) Market information is available.
d) Demand of funds is very high.
e) Competition is there in the market.
f) The country has perfect capital market.
g) Prospect of further growth is high.
h) Capital market is efficient.
16
4➢ Threats
a) Vulnerable risk environment.
b) Unfavourable monetary policy.
c) Diversion of funds to the sector which is not meant for.
d) Unfair competition.
e) Natural calamities.
f) Lack of congenial investment climate.
g) Unfavourable fiscal policy.
Note: SD=Strongly Disagree, D=Disagree, N=Neutral, A=Agree, SA=Strongly Agree
DR. MD. AMINUL ISLAM
Associate Professor, Accounting
Nawabganj Govt. College, Chapai Nawabganj.
Cell No. 01715081755, Email: mdaminul1970@gmail.com
Tables Showing Analysis of Data
Table 1: Mean values, standard deviations, maximum values and minimum values of ROA of sample companies.
Name of companies Mean (In Std. Maximum Minimum
%) Deviation
IDLC FinanceLimited 2.55 1.23 5.35 1.52
United Finance Ltd. 2.30 .77 4.09 1.75
Uttara Finance and Investment Ltd. 3.43 1.72 5.27 .26
MIDAS Financing Ltd. 1.92 3.46 5.06 -5.61
First Finance Ltd. 5.76 3.92 14.26 .74
Bay Leasing and Investment Ltd. 3.26 2.94 10.65 1.15
International Leasing and Financial Services Ltd. 1.63 1.05 4.05 .40
People's Leasing and Financial Services Ltd 3.72 1.87 7.37 .88
Premier leasing and Finance Ltd. 1.55 1.01 3.08 .27
BD Finance and Investment Company Ltd. 3.22 3.60 12.59 .40
Lanka-Bangla Finance Ltd 4.32 2.51 9.52 1.26
Total 3.07 2.63 14.26 -5.61
Source: Annual Reports of sample companies.
Table 2: Mean values, standard deviations, maximum values and minimum values of ROE of sample companies.
%) Deviation
United Finance Ltd. 15.47 4.50 26.20 12.20
Uttara Finance and Investment Ltd. 19.77 10.60 33.74 1.19
MIDAS Financing Ltd. 1.34 33.49 29.77 -87.00
First Finance Ltd. 16.79 7.95 32.61 4.86
International Leasing and Financial Services Ltd. 14.37 11.16 31.00 -2.87
People's Leasing and Financial Services Ltd 20.19 9.24 30.59 4.78
Premier leasing and Finance Ltd. 12.25 4.71 20.88 4.98
BD Finance and Investment Company Ltd. 14.05 10.18 33.16 2.03
Total 16.12 14.77 49.69 -87.00
Table3: Mean values, standard deviations, maximum values and minimum values of operating ratio.
Name of companies Mean (In %) Std. Deviation Maximum Minimum
MIDAS Financing Ltd. 68.84 74.70 236.06 19.63
17

International Leasing and Financial Services Ltd. 37.88 17.25 72.34 14.43
Total 32.36 27.99 236.06 1.57
Table 4: Mean values, standard deviations, maximum values and minimum values of Non-Performing Loan ratio of
sample companies.
%) Deviation
IDLC FinanceLimited 2.61 .84 3.97 1.63
United Finance Ltd. 3.58 .61 4.61 2.86
Bay Leasing and Investment Ltd. 5.19 .49 5.91 4.60
Total 6.67 4.92 32.86 1.56
Table 5: Mean values, standard deviations, maximum values and minimum values of cost of funds of sample
companies.
Name of companies Mean (In %) Std. Deviation Maximum Minimum
Total 12.41 2.53 22.00 6.70
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The Millennium University Journal

Vol. 2, No. 1; 2017

SWOT Mix and PESTEL Analysis: Effective Tools of Risk

Dr. Md. Aminul Islam

Keywords: Formal Education, Non-Formal, Informal, Codification, Knowledge and Skills.

2. Risk Management Practices of Leasing Companies

4. Theoretical and Conceptual Framework

5. Statement of the Problem

6. Objectives of the Research

7. Methodology of the Research

9. Major Findings of the Study

Source: Questionnaire survey

Table 2: Responses to the Weaknesses

Workers and employees of your 1.75 3 1 .52 7

Table 3: Responses to the opportunities

Table 4: Responses to the threats

10. SWOT Analysis of IDLC Finance Ltd as the Bench-mark

Table 6: Factors Narrating the Strengths

Table 7: Indicators of Basic Weaknesses

Table 8: Available Opportunity Factors

Table 9: Exposure of Threats

Source: Annual Report (2015) of IDLC Finance Ltd.

share to the new entrants.

11.Addressing the Weaknesses and Countering the Threats

Threats Countering Threats

12.PESTEL Scenario of Sample Companies

Table 11: PESTEL Analysis for Sample Leasing Companies

First Finance Ltd. 29.67 14.97 57.83 10.98

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