SME BANKIING

OF

BRAC BANK LIMITED

 REPORT

On

SME BANKING OF

BRAC BANK LIMITED

Submitted To

Ms. Manna Akter Lina

Assistant professor

Department of Business Administration

Dhaka City Collage

Submitted By

The Group 09

Sec-Management (B), Batch- 18th , Session: 2015 -16

Department of Business Administration

S.N. Name Id No.

1 Tasnim Nur Maisha 313
2 Moushumy Roy 318
3 Samia Rahman 379
4 Sumaya Fardous 369
5 Md. Sibgat Ullah 389
6 Fairuz Sadaf Aishwarya 408

Date of Submission: February 09, 2020.

 LETTER OF TRANSMITTAL

February 09, 2020

Ms. Manna Akter Lina

Assistant professor

Dhaka City Collage

Dhanmondi R/A, Dhaka-1205

Subject: Submission report on “SME Banking of BRAC Bank Limited”

sir,

With great pleasure we hereby submit our report on “SME Banking of BRAC Bank Limited”
The report has been completed by the information that we gathered from the major courses on
Comparative Management which we have completed during our BBA as well as from our report
in Brac Bank Limited. As a requirement of preparing a report based on the practical knowledge
in an organization, we have tried our level best to complete this report meaningfully and
correctly, as much as possible. We hope this report will reflect on the contemporary issues on
the SME Banking that are being Practiced by this organizations in our country.

We would like to convey our tributes to you and thank you for giving us the opportunity to work
on this topic. Your queries in this aspect will highly be expected.

Sincerely yours,

___________________

Tasnim Nur Maisha -313

Moushumy Roy-318
Samia Rahman -379
Sumaya Fardous -369
Md. Sibgat Ullah -389
Fairuz Sadaf Aishwarya -408
 Acknowledgement

We would like to thank Dhaka City Collage for giving us the opportunity to do this report. We
would like to thank BRAC Bank Limited for help us to prepare this report. We’d like to thank
Ms. Manna Akter Lina mam, for guiding us with the completion of this report. We’d also like to
thank Mr. Imam Rasul Mohammed, SAVP & DCIO, and Investment Manager & Md. For had
Rahman from SME Banking Division to provide us with all the necessary information which has
helped us in the completion of this report. We would also like to thank all the officials of BRAC
Bank SME Banking Department for allowing us at their organization and help with necessary
information.
 Executive Summary

As the part of BBA program, this report is made on SME Banking of BRAC Bank Limited. To
examine the overall SME financing of BRAC Bank Limited was the prime motive of this report.
I focus on the types of SME, sector of SME allocation of BRAC Bank Limited. Major
information were collected through with respective officer, Manager operations, credit in
charge,web side and Bank’s annual report, But we have faced some problems doing the report
like lack of data resources and time constrains.

At first we briefly discussed about primary objective that is to fulfill the partial requirement of
BBA degree and secondary objective is to apply theoretical knowledge in the practical field. The
report is prepared by the help of respected mam . To prepare this report several tools are
analyzing qualitative data by comparing and qualitative data are analyzed rationally and in
comparison with current market position. All this are prepared by using MS office. The study is
limited to BRAC Bank Limited.

Then it come about the overview of BRAC Bank Limited. In 2001 BRAC Bank did not start its
journey like any other conventional bank. The visionaries who led the bank realized that the
previously neglected Small and Medium Enterprises (SME) sector plays significant role in
generating growth and creating employment in the country. Over the past few decades,
traditional banks were reluctant to invest in this sector. At a time when it was almost impossible
for the SME entrepreneurs to get financing from the banking sector in Bangladesh, BRAC Bank
stepped forward and came to finance these unbanked SME entrepreneurs.

Here, it describes the background of BBL, their various products and services, organizational
structure, various division, values, different organograms and tables. Their corporate mission and
vision. How they execise their key management profile. Here, described about the product and
services of the BRAC Bank Limited.

After that we include analysis of SME Banking of BRAC Bank Limited in which shown SME
guideline provided by Bangladesh Bank, terms and conditions of SME loan, application
procedure, loan procedure, monitoring and recovery, competitive benefit analysis and business
earning growth of BBL.

At last we have discussed my findings, recommendations and conclusion. In findings BRAC

Bank SME authority should carefully choose the proprietors while disbursing the SME loan.
Because overly aged persons cannot pay the SME loans. Inexperienced proprietors are not
encouraged to gain the SME loans. It has been found that it took less than 1(one) month between
loan application and section. And it took around one month to get the loan which is quite well in
terms granting the SME loan. Processing time sometimes become even longer due to delay
submission of CIB report. Compared to other banks BRAC Bank Ltd has been successful in
increasing their SME portfolio over the years, the growth they are showing is good.
 Table of contents

Chapter No. Sl. Contents Page No.

LETTER OF TRANSMITTAL I
Acknowledgement II
Prefatory Executive Summary III
part Acronyms IV,V
List of Tables VIII
List of Figures IX
Introduction 1-5
1.1 Origin of the report 2
1.2 Objective of the report 2
Chapter One 1.3 Scope of the report 2
1.4 Methodology 3
1.5 SME Loan Exposer 4
1.6 Limitations 5
Organization Overview 7-14
2.1 Origin and Growth of Banking system 7
2.2 History and Background 7
2.3 Better Equipped for Tomorrow 7-8
2.4 Profile of Brac Bank Limited 8
2.5 Logo and Slogan 8
Chapter- Two
2.6 Vision 9
2.7 Mission 9
2.8 Core Values 9
2.9 Major Achivement of BRAC Bank Ltd 9-11
2.10 Core Business Units of BRAC Bank Ltd 11
2.11 Management Aspects 11-12
2.12 Division 12
 2.13 Organization Structure 12
2.14 Board of Directors 12
2.15 Share Holding patern 13
2.16 SWOT Analysis 13-14
Analysis and Evaluation 15-39
3.1 SME Banking 16
3.2 Definition of SME 16-17
3.3 Minimum requirements for SME financing in Bd 17
3.4 SME products of BRAC 18-20
3.5 SME Loan Process 20
3.6 SME Loan Process 21
3.7 SME Loan Coverage 22
Chapter Three
3.8 Loan disbursement manual activities 22-23
3.9 Terms and condition of SME Loan 23-25
3.10 Economic mapping survey of BRAC 25-26
3.11 Selection of Potential Enterprise for SME Banking 26-27
3.12 Terms and Conditions of SME Loan 27-28
3.13 Procedure of SME Banking in BRAC Bank Limited 29-31
3.14 Loan Disbursement of SME Banking 31
3.15 Security Documentation against Loan 31-34
3.16 Financial Performance- Portfolio Analysis 34-37
3.17 Analysis of SME Loan from Year 2017 to 2018 37-39
Findings, Recommendations and Conclusion 40-43
Chapter Four 4.1 Findings 41
4.2 Recommendations 42
4.3 Conclusion 43
Bibliography 44
Appendices

Accronyms
SME Small and Medium Enterprise
GDP Gross Domestic Product
CIB Credit Information system
UN United nations
CSR Corporate Social Responsibility
NGO Non-Government Organizations
SBCB Shilpo Bhavan Corporate Branch
DCCI Dhaka chamber of commerce and Industry
NCB National Commercial Bank
BBTA Bangladesh Bank Training Academy
USA United states of America
BBA Bachelor of Business Administration
MBA Masters of Business Administration
IDA Islamic development Bank
ADB Asian Development Bank
BSCCI Bangladesh Small and Cottage Industries Corporation
BHWA Bangladesh Home Workers Women Association
WEAB Women Entrepreneurs Association of Bangladesh
HOCC Head Office Credit Committee
BIBM Bangladesh Institute of Bank Management
FBCCI Federation of Bangladesh Chambers of Commerce and Industries
NASCIB National Association of Small and Cottage Industries of Bangladesh

List of Tables
Table No Title of Tables Page No

1.1 SME loan process 4

2.1 Shareholding Pattern 13

3.1 SME Loan Process 20

3.2 Terms And Conditions of SME Loan 28

3.3 SME Loan Percentage in 2017 37

3.4 SME Loan Percentage of in 2018 38

List of Figures
Figure
Title of Figures Page No
No

3.1 Economic Mapping Survey of BRAC 25

3.2 Financial Performance- Portfolio Analysis 34

3.3 Segment Wise Performance Analysis 35

3.4 Segment Wise Operating Profit 35

3.5 Geographical Location – Wise Portfolio 2018 36

3.6 Geographical Location – Wise Portfolio 2017 36

3.7 Graphical Analysis Loan Portfolio 2017 38

3.8 Graphical Analysis Loan Portfolio 2018 39

 Chapter One
Introduction

1.1 Origin of the report

 Practical knowledge is fundamental for the application of theoretical intelligence. Bearing this in
mind and internship program was being included in the BBA curriculum. The goal of this
analysis is to expose the student in the organizational work situation and also to provide an
opportunity for applying classroom learning in practice. Main purpose of the report is to analysis
is retail and SME banking activities, here so an overview of BRAC Bank limited other objective
are to know the general banking procedures and to exhibit Consumer banking service and
product provide by BBL. Report also focuses on to know the key financial factors in which the
policy of the bank depends on. Finally identify the strengths and weakness of the bank and
identify the problems faced by BBL. Here also recommended actions that may be necessary to
take by BBL.

1.2 Objective of the report

 Evaluating financial performance of BBL with its peer groups.
 Identifying the positions of BBL in regard of best-performing commercial Banks of
Bangladesh.
 DuPonts analysis of the selected Bank.
 Probability of Insolvency of the bank.
 Critically analysis has the performance indicator.

1.3 Scope of the report

In our economic there are three types of schedule commercial banks are in operations. They are
private commercial Banks BRAC bank has discovered a new horizon in the field of banking area
which offers different retail and SME banking. Investments and foreign exchange banking
system so I have decided to study on the topic “SME banking” because the internship program of
the university is an integral part of the BBA program.

The report is based on my practical work which I have learned experience and done in BBL. This
also provides an opportunity to the student to minimize the gap between theoretical and practical
knowledge. Finally this report helps me to know the atmosphere and environment of an
organization. Thus report is very rational and significant. As an internee of BBL I have the
excess of working on different sectors like SME Division, Credit division, Account opening,
CIB preparation and opening of different schemes (DPS, MIS, FDR,MTDR and MILLIONIRE)
issuance of different checkbooks and some knowledge of cash counter. As banking is a large
financial sector, So it is impossible to learn everything of the sector with in this short period.

1.4 Methodology
For preparing this report information has mainly been mainly collected from the annual report of
the respective banks, credit rating report individual Banks website. The selection of the peer
group is the best-performing Commercial Bank of Bangladesh with rating of AA3 and above as
stipulated by CARB. Based on their rating, The bank that was selected is AB Bank limited, Bank
Asia limited and Dutch Bangla Bank limited. Moreover, the selection criteria was based on the
CARB rating validity of 30 June,2011. The various ratio analysis are used in the report which
were collected from the banks in one report and financial statements and the ratio that are not
found in the annual report directly are calculated from the information provided in the annual
reports. Eight ratios have been selected to judge the various aspects of efficiency of the banks,
like –“credit deposit ratio” to judge the efficiency of using money. Ratio of classified loan
against total loan to the judge the efficiency of loan collection. Cost of fund to measure the
efficiency of maintaining fund cost return on investment to measure the investment efficiency,
Return on asset to measure the efficiency of using Banks asset return on Equity to using DuPond
analysis to measure the efficiency of using equity earnings per share to measure the earnings per
share capital and net income ratio to measure the efficiency of operating cost to generate
revenue. The last indicator is Risk Index of each bank and probability of insolvency to measure
the potential shock to the earnings of the bank. For ranking the Banks score is provided of the
banks in the above-mentioneratio. The financial information considered for the Evaluation
relates to the last six years. But the emphases are given more on the current year performance by
multiplying the score with the year.

1.4.1 Sources of data collection:

The main function of the bank is borrowing money from the people by accepting deposit and
lending them for development of trade, Commerce, industry. A bank is thus a dealer of money
and credit.

Primary sources :
 Direct observation of daily operations. Practical work exposure in BB
 Discussions with high official of the branch. Face to face concert conversation and
questionry survey on the SME proprietors.

Secondary sources :
Internal sources

 Bank's annual report.

 Group discussion.

 Morning hundle.
  SME manual of BRAC Bank Limited.

External sources :
 Different books and periodicals related to the banking sector.
 Newspaper
 Bangladesh Bank report
 Internet

1.5 SME loan exposuer

For the SME loan operation BRAC Bank limited has in Total 900 unit offices,80 zonal office, 12
territory and 1800 Customer relationships officers this is CROs work for the bank to converg
times for getting the SME loan. Once CROs get the loan application and if it is less than
5,00,000 Taka then zonal officer has the authority to approve the loan but if it is above 5,00,000
then the CROs sent it to head office for all necessary approval. After approving the loan then
asset operation Department starts its work. As the scope of businesses are growing, the amount
of files and disbursement is getting bigger in May 2007, AOD has processed 3249 files
amounting Taka 1,235,200,000. So SME division’s success greatly relies on the performance.
Up to 2010 BBL provides loans for 3,20,000 clients and in total BDT 1,44,330 million. BDT
37,400 asset disbursement was supplemented by BDT 8970 million deposits.

SME loan process flow is shown below-

when a customer comes to the unit office for a loan request first he/she meets with the customer
relationship officer to discuss about the loan, which loan product is suitable for him/he. After
than the following process takes place:

Table : 1.1 SME loan process

1.6 Limitation
In Bangladesh, the banking sector has have already created great impact on the economy and
there are some banks which are capturing both local and international markets. Therefore its
function is in mammoth proportion and comparing the banks in regards to their service is
difficult. Another limitation was getting the information and interpreting it on the basis of our
understanding and the implementing it. Therefore there might be some information that might be
included inaccurate, since the time invested in the work is not sufficient enough to completely
know about the company. Since, it would be difficult for them, as well for us to know about the
complete picture in a single day with time constraint in hand moreover the subject matter is itself
complex, which made it difficult in organizing the information in a simpler manner.

5
 Chapter two

Company Overview

2.1 Origin and growth of Banking System

BRAC Bank Limited is a private bank head quartered in Dhaka Bangladesh it was established on
July 4, 2004, as a public limited company with limited liability under the bank companies Act of
2000. Its share are listed in the Dhaka Stock Exchange and the Chittagong Stock Exchange. The
bank provides and services in retail banking corporate finance, asset management, equity
brokerage and security. It has 85 branches and 200 ATMs in Bangladesh and employs around
3000 employees.

2.2 History and Background

The emergence of BRAC Bank Limited the private sector is an important event in the banking
industry of Bangladesh BRAC Bank Limited started its business as a public limited company on
August 8, 2005 with the primary objectives to carry on all kinds of banking business in and
outside. The bank operates under a “double bottom line” agenda where profit and social
responsibility go hand in hand as it strives forwards a poverty free, enlightened Bangladesh.It is
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 five years of operation, The Bank has disturbed over
BDT 1500 core in loans to nearly 50000 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.

2.3 Better Equipped for Tomorrow

It is a story of success it is a story of rebirth and regeneration, it is a story of hope and aspiration,
it is a story of tenacity and resolve, and it is a story of passion for performance of BRAC Bank
Limited, better known for its acronym BBL. With a humble beginning in 2001, BBL moved
forward with a small yet confident stride and a pledge to impacting lives positively. Today BBL
7
stands for service excellence, product innovation and world class banking experience. The most
awarded bank in the country. BBL is also the first bank in the country to be rated by the world’s
top rating agency in Bangladesh. The long-cherished dream of having a permanent address of
BBL became a reality after 19 years in 2020 when we moved to Gulshan corporate office. The
slick, functional and intelligent fifteen-story head office of BBL is a new landmark of Dhaka.

2.4 profile of BRAC Bank Limited

BRAC Bank Limited (BBL) is one of the modern, fully online and technologically superior
private commercial Banks in Bangladesh. BRAC Bank Markets a wide range of depository, loan
and card products. These products include different types of savings and current accounts,
personally loans, auto loan, debit card, pre-paid cards, Internet banking, treasury, syndication
corporate banking and SME banking services through a network of branches and centers country
wide.

Here is the brief profile of BBL:

 BBL was formed as a public limited company in Bangladesh with primary objective.
 The Bank was formed on JULY 4 ,2001
 It commenced its business with four branches from August.
 The authorized capital of the bank is Tk. 3300 million.
 The paid up capital of the Bank is Tk. 1035 million.

2.5 Logo and Slogan

A logo is the graphic mark, emblem, or symbol used to aid and promote public identification and
recognition. It may be of an abstract or figurative design or include the text of the name it
represents as in a wordmark and slogan is a memorable motto or phrase used in a clan.
 8

2.6 Vision

To become the most valuable brand in the financial service in Bangladesh creating long lasting
value for our stakeholders. We operate in by transforming the way we do business and by
delivering sustainable growth.

2.7 Mission

 We will deliver service excellence to all our customers, both internal and external.
 We will ensure to maximize shareholder’s value.
 We will constantly challenge our systems, procedures and training.
 We will create an enabling environment, a team based culture where people will excel.

2.8 Core Values

Service Excellence

 We passionately drive customer delight.

 We use customer satisfaction to accelerate growth.
 We believe in change to bring in timely solution.
 9

Commitment

 We know our roadmap.

 We believe in continue improvement.
 We do our task before we are told.

Openness

 We share business plan.

 We encourage two way communications.
 We recognize achievements.

Trust

 We care for each other.

 We share knowledge.
 We empower our people.
 We are tax-abiding citizen.
 We confirm to all laws, rules, norms f the land.

2.9 Major Achievements of BBL

2.9.1 Real time online banking

BBL is the pioneer Bank in laying foundation to the world class banking software in Bangladesh.
No other private banks in Bangladesh could implement foreign banking software with success in
past.

2.9.2 Internet Banking

BBL made a milestone in the banking arena by introducing the internet banking for the first time
10

in Bangladesh. Internet banking application address the needs of small, individual and corporate
account holders of the bank. Transaction can be executed through net are account operations and
inquiries, fund transfers and payments.

2.9.3 Visa election Debit card

BBL is the first bank in the country to introduce debit card towards everywhere. This is a new
addition of banking service.

2.9.4 ZIP

BBL, ZIP is the non-interest bearing equal installment plan that allows credit cardholders the
flexibility to convert retail purchase transactions at designed outlets into an installment scheme.

Customers pay back the amount over a tenor ranging from 3 months to 24 months.

2.10 Core Business Units of BBL

 Consumer banking

 Corporate banking

 SME banking

 Treasury

2.11 Management Aspects

There are three committee of the board for different purposes:

1. Executive committee comprising of 7 members of the board.

 2. Committee of the board for Administrative matter.
3. Committee to examine Bad Loan Cases.

11

Management of BBL assumes that employees are members of the team, who actively participate
in accomplishing the organizational goal.

2.12 Division

It comprises of nine major divisions namely Corporate Banking Division, International Division,
Finance and Accounts Division, Human Resources Division, Information Technology and Audit
division.

2.13 Organizational Structure of BBL

 Board of Directors

 Board committees

 Executive committees

 Policy committees

 Management team

2.14 Board of Directors

 Md. Showkat Ali Chowdhury (chairman)

 M. GaziHaque

 A.M.Shaukot Ali

 Mir Nasir Hossain

  Salina Ali
 Anis Ahmed

 Al Reza Iftekhar (CEO)

12

2.15 Shareholding Pattern

Party Percentage
Institute 43.80%
Sponsor 31.60%
Public 24.30%
Foreign 00.40%
Government 00.00%

Table : 2.1 Shareholding Pattern

2.16 SWOT ANALYSIS

iS
s
ly
a
n
A
T
O
W
Strengths:
13

 First online banking across all the branches.

 Authorized share capital increased to BDT 3.3 Million
 Launching of SME division.
 Signed agreements with ADB to become ADB’s
 Awarded ‘Super brand’ by super brands Inc.

Weaknesses:

 Lack of Bank Branches and ATM Booths.

 Lack of capital.
 Lower growth rate.
Opportunities:

 Emerging economics
 The middle east
 Growing demand.

Threats

 Downturn in American spending.

 Rival Banks are growing faster than BBL.
 External business risk.

14

Chapter Three
 Analysis and Evaluation

3.1 SME Banking

An SME is defined as, “A firm managed in a personalized way by its owners or partners, which has only
a small share of its market and is not sufficiently large to have access to the stock exchange for raising
capital”. SMEs ordinarily have few accesses to formal channels of finance and depend primarily upon
savings of their owners, their families & friends. Consequently, most SMEs are sole proprietorships &
partnerships. As with all definitions, this one is not perfect. Depending on context therefore definition of
an SME will vary(Garrison,2016).

3.2 Definition of SME

A quantitative definition in each national context is, however, advantageous, as it makes it easier to target
macro-level policies for a specific group of enterprises. The countries with such definitions have recorded
a higher growth rate in the SME sector. This indicates that the more precise the definition, the more
effective the transaction of policies intended to benefit the sector with actual results. In countries where
no definition exists, the enterprises are in a disadvantageous position (Bernstein,1993).

3.2.1 Importance of SME in Bangladesh:

The most valuable natural resource of Bangladesh is its people. As a nation, we struggled for our
independence and now the attainment of economic uplift is the main goal. But the small and medium
entrepreneurs were overlooked. This missing middle group is the small but striving entrepreneurs, who
because of lack of fund cannot pursue their financial uplift, as they have no property to provide as equity
to the commercial banks. With this end in view BRAC Bank was opened to serve these small but hard-
working entrepreneurs with double bottom line vision. As a socially responsible bank, BRAC Bank wants
to see the emancipation of grass-roots level to their economic height and also to make profit by serving
the interest of missing middle groups. 50% of its total portfolio usually collected from urban areas, are
channeled to support these entrepreneurs who in future will become the potential strength of our
economy. BRAC Bank is the market leader in giving loans to Small and Medium Entrepreneurs. They
have been doing it for the last five years. The most important regular asset of Bangladesh is its people. As
a country, we battled for our autonomy and now the achievement of monetary elevate is the primary
objective. Micro lenders are working here and providing very small amount of loan and on the other han

16

regular commercial banks have been providing bigger amount of loans to larger industries and trading
organizations. In any case, the little and medium business people were neglected. So, small entrepreneur
cannot expand or start their business for the lacking of fund, as they have no property to give as value to
the business banks. With this end in see BRAC Bank was opened to serve these little however
persevering business visionaries with twofold primary concern vision. As a socially dependable bank,
BRAC Bank needs to see the liberation of grass-attaches level to their monetary stature and furthermore
to make benefit by serving the enthusiasm of missing center gatherings such as for startup company. Half
of its aggregate portfolio normally gathered from urban territories, are directed to help these business
people who in future will turn into the potential quality of our economy. (Chowdhury,2002)

3.3 Minimum requirements for SME financing in Bangladesh

Small enterprise financing, bank/financial institutions are required to follow some specific guidelines.
Firms that have effectively settled SME financing are required to consistence with the rules by six months
of the date of issuance of Small Enterprise Financing Prudential Regulations Pre-operation guidelines are:

 For taking SME financing, banks are required to set up their own particular risk management
capacity and strategy those will be properly staffed in combined with sufficient expertise and
experienced person in the field of consumer finance/business.

 Getting approval by the Board of Directors that bank should be developing comprehensive credit
policies suitably. The policy must be along with all those process such as documentations
process, disbursement systems and appropriate monitoring mechanism and also along with revise
with job description and job specification of different layer staffs. Specific powers/authority will
give the authority relating to approval/sanction of consumer finance facility.

 Every bank shall develop their own specific Product Program Guide (PPG) for every type of
SME activities and product of SME. These PPG will define the eligibility of the borrower in
terms of objectives or quantitative parameters also measure the maximum permissible loan limit
of each borrower. It shows the maximum permissible exposure banks will take against each
product.
17
 Those Banking provide the service of SME shall have computer based Management
Information’s System (MIS) which will cater the need of small and medium enterprise financing
portfolio and should be flexible enough to generate necessary information regarding various
clients and their payments behaviors.

3.4 SME products of BRAC

3.4.1 ANONNO

Eligibility: Small sized businesses (Production, Trading, Service Agro based products and others). Having
at least 3 years business history. ANONNO is a business loan to meet any kind of business needs, which
starts from BDT 3 Lac to15 Lac.
3.4.2 PROTHOMA or TARA SME Loan

Prothoma is a term loan for small-scaled business operated by women entrepreneur.

➢ No security required

➢ Easy loan processing

Loan Ceiling:

 Equal monthly installment facilities provided such as BDT 2 lac to BDT 15 lac.
 Single installment facilities are like BDT 2 lac to 15 lacks for all loan proposals.
 Short-term loan as BDT 2 lac to BDT 15 lac.
18
3.4.3 APURBO SME Loan:

Apurbo is a loan facility for small and medium enterprises that involve in trading, manufacturing, service,
agriculture, non-farm rural activities, agro based industry and many other acceptable sectors spread all
over Bangladesh marketed through our SME unit offices or branches & service center across the country.
The products offer term loan, overdraft facility, revolving facility, single installment, bank guarantee for
the purpose of working capital finance, fixed asset purchase and agriculture production and other business
purposes.

3.4.4 SHOMRIDDHI SME Loan:

To meet import-export related expenses, post import expenses, tax/duty payment, local bill purchase and
working capital, SHOMRIDDHI loan.

 LC and LATR facility.

 Revolving loan, overdraft.
 Local bill discounting facility.
19

3.4.5 SHOKTI SME loan:

Business loan under, which you can avail BDT 1 million to BDT 10 million to meet your any kind of
business needs.

 Loan against partial cash security.

 At least 1year bank statement.
 Term loan and Overdraft Facility.

3.5 SME Loan Process:

Chart 3.1: SME loan process of BRAC

20

3.6 SME Loan Process

Select Potential Enterprise: For SME loan, in this step the CRO conduct a survey and identify potential
enterprise. Then they communicate with entrepreneurs and discuss

Loan Presentation: The function of CRO is to prepare loan presentation based on the information
collected and provided by the entrepreneur about their business, land property.
Collect confidential information: Another important function of a CRO is to collect confidential
information about the client from various sources.

Filled Up CIB Form: CRO give a CIB (Credit Information Bureau) form to the client and the client fill
and sign in it. In some case if the client is illiterate then the CRO fill the form on behalf of the client.
Then CRO send the filled and signed form to the SME,

Sending CIB To Bangladesh Bank: The SME, head office collects all information and sends the CIB
form to Bangladesh Bank for clearance. Bangladesh Bank return this CIB form within 10-12 days with
reference no.

CIB Report from Bangladesh Bank: In the CIB report Bangladesh Bank (BB) uses any of the following
reference number.

Loan Sanction: The respective unit office sanction loan to the client if it is 2 to 5 lacks and the send the
sanction letter including all necessary charge documents to the loan administration division for
disbursement the loan.

21

3.7 SME Loan Coverage

 3.7 Picture: SME loan coverage of BRAC in Bangladesh.

3.8 Loan disbursement manual activities

Sometimes I received those loan files and check them if they are properly given from the branch office
and give entry to our database of that files.

Prepare Loan File: Receiving all documents, Loan Administration Division prepares a loan file with all
documents received from the unit office.

Charge Documents Checking: The loan administration division checks all charge documents. Following
charge documents are checked:

Prepare Disbursement List: The loan administration division lists all new sanctioned clients’ details and
sends a request to the treasury through internal mail.

Disbursement of The Amount: Sending the list to the treasury of BRAC bank for disburse the amount,
the treasury disburses the amount to the client through the mother account of the client’s bank. BRAC
bank disburse amount through any of the following banks corporate branch nearer the BRAC bank head

22

office and the corporate branch of the respective bank send the amount to the client account
Message Sent to The Unit Office: Completing the disbursement, loan administration division sent a
SMS to the respective CRO informing the disbursement of the sectioned loan.

3.9 Terms and condition of SME Loan

SHOHOJ SME loan:
Shohoj is a loan facility for business expansion, working capital, fixed asset purchase, agricultural
production and other business services.

Legal form of business: Sole proprietorship, partnership, and private limited company.

Equal monthly installment facility: Minimum BDT 50000 and no Maximum bar

Overdraft Loan Facility: Minimum BDT 50000 and no maximum bar.

Interest rate: Cash security rate+ 3%.

Penal interest fee: 2% p.a. on overdue amount.

Early settlement fee: 0.5% outstanding amount of BDT 10000 whichever is lower, no fee repeat
customer.

Equal Monthly Installment: 12-60 months, with 3 months interval.

Overdraft loan facility: 12 months

Booklet Fee: BDT 600

Processing Fee: NIL

CIB charge BDT 100 (per CIB charge).

 Documentation Charge: Minimum BDT 1550 (BDT 1450 for stamp & BDT 100 for CIB) +
additional Charge (if applicable)
 Security Replacement fee: NIL
 Reschedule Fee: BDT 2000+ VAT
23
 Eligibility and Restrictions:
  Minimum 21 years at the time of application
 Owners cannot involve in any activity subversive to law or discipline or direct affiliation to
politics and has not been convicted by law in past.
 Experience require for proprietor or partners business. They should have minimum one-year
experience in the same line of business as an entrepreneur.
 Documents require for partnership business:
 Need partnership deed
 Partnership resolution for availing loan.
 Documents require for private limited company.
 Memorandum and Article of Association
 List or personal profile of director
 Certification of Incorporation
 Form X11 Certified by RJSC (particular director)
 Board resolution in respect of availing loans and execution of document with bank.
 Certification of Commencement (In case of public related company).
 Joint venture agreement (In case of Joint venture company).
 BOI permission (In case of joint venture company).

BAHON SME Loan:

This is a new launched product of SME banking of BRAC bank. This is a term loan basis. Small and
Medium Business other than transport Operators can apply for this loan. Car rental business, if only it has
fully-fledged transport assignment are also the target group for this loan.

 Loan ceiling: Single vehicle- BDT 0.5 M to BDT 5.0M

 Multiple vehicle- BDT 0.5M to BDT 50.0M
 Monthly loan installment:
 13 months to 60 months
 Time period between vehicle manufacturing year & expiry date of loan agreement should not
exceed 10 years
24
 Interest Rate: As per interest rate card (secured loan)
  Eligibility and restrictions:
 Business age should be minimum two years.
 Vehicles, which are eligible for registration from BRTA, will be considered only.
 Manufacturing type of vehicle should be within last 5 years of application date.
 Commercial vehicle includes Mini Truck, covered van, pickup van, prime mover, trailer, Tank
lorry, dump truck, ready mixer etc.
 Passenger vehicle includes bus, microbus, minibus etc. that are produced for official or business
use.

3.10 Economic mapping survey of BRAC

Survey and graph source: http://www.brac.net/images/IDP/IDP-IP%20mapping%20book.pdf

Figure 3.1 Economic mapping survey of BRAC

The survey byshows that the average annual income and expenditure of indigenous households were BDT
78,046 and BDT 87,779 respectively, which were much lower than the national figure (income: BDT
115,776, expenditure: BDT 115,344) found in the Household Income and Expenditure Survey 2011 (BBS
2011). Adult literacy rate of the four sub-districts is 47.75 per cent against the national rate 59.07 per cent
25
 (BBS 2011). The primary school enrolment rate of children, aged 6-10 years, was 83.85 per cent while
the national figure is 93.4 per cent (BBS 2011). Only 30.2 per cent of households had sanitary latrine in
comparison to the national sanitation coverage rate of 62.3 per cent (BBS 2011).

3.11 Selection of Potential Enterprise for SME Banking

3.11.01 Enterprise Selection Criteria
The success of SME will largely depend on the selection of a business and man behind it.
Interms of the business (Enterprise), the following attributes should be sought:

 The business must be in operation for at least one year.

 The business should be environment friendly, no narcotics or tobacco business.
 The business should be legally registered, i.e., valid trade license, income tax or VAT
registration, wherever applicable.
 The business should be in legal trade, i.e.; smuggling will not be allowed or socially
unacceptable business will not be entertained.
 The business must have a defined market with a clear potential growth.
 The business must be located ideally close to the market and the source of its raw
materials/suppliers. It should have access to all the utilities, skilled manpower’s that are
required.
 Any risk assessed by the management in turn will become a credit risk for the bank. So
effort should make to understand the risk faced by the business.

3.11.02 Entrepreneur Selection Criteria

In order to understand the capability of the management behind the business, the following
should be assessed:

 The entrepreneur should be physically able and in good health, preferably between the
age of 25-50. If he/she is an elderly person closer to 50, it should be seen what the
succession process will be and whether it is clearly defined or not.
 The entrepreneur must have the necessary technical skill to run the business, i.e.
academic background or vocational training, relevant work experience in another
26
 institution or years of experience in this line of business.
 The entrepreneur must have and acceptable social standing in the community (People
should speak highly of him), he should possess a high level of integrity (Does not cheat
anyone, generally helps people), and morally sound (Participates in community building).
 The entrepreneur must possess a high level of enthusiasm and should demon strate that he
is in control of his business (Confidently replies to all queries) and has the ability to take
up new and fresh challenges to take the business forward.
 Suppliers or creditors should corroborate that he pays on time and is general in nature.
 Clear-cut indication of source of income and reasonable ability to save.

3.11.03 Guarantor Selection Criteria

Equally important is the selection of a guarantor. The same attribute applicable for an
entrepreneur is applicable to a guarantor. In addition he should posses the followings:

 The guarantor must have the ability to repay the entire loan and is economically solvent
(check his net worth).
 The guarantor should be aware about all the aspect of loan, his responsibility, know the
entrepreneur reasonably well & live in same community.
 Govt. and semi-govt. officials can be selected as a Guarantor such as school teacher,
college teacher, doctor etc.
 Police, BDR and Army persons, political leaders and workers, and Imam of mosque
cannot be selected as a guarantor.

3.12 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:
27
 Loan Amount Loan Processing Fee
2 lacs to 2.99 lacs BDT 5000
3lacs to 5 lacs BDT 7500
5.01 lacs to 15 lacs BDT 10000
15.01 lacs to 30 lacs BDT 15000

Table 3.2: SME Loan Processing Fees

 Loan can be repaid in two ways:
 In equal monthly loan installment with monthly interest payment; or
 By one single payment at maturity, with interest repayable a quarter end residual
onmaturity.
 Loan may have various validates, such as, 3 months, 4 months, 6 months, 9 months,
12months, 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
SMEhas its account.
 The loan will be realized by 1stevery month, starting from the very next month’s whatever
the date of disbursement, through account payee cheque in favor of BRAC Bank Limited
A/C. With Bank’s 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
bank’s requirement and procedures.
 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.

28
3.13 Procedure of SME Banking in BRAC Bank Limited
3.13.01 Loan Sanction Activities
The activities involved in loan sanctioning are given below:

 Select Potential Enterprise: For SME loan, in this step the CRO conduct a survey and
identify potential enterprise. Then they communicate with entrepreneurs and discuss the
SME program.
 Loan Presentation: The function of CRO is to prepare loan presentation based on the
information collected and provided by the entrepreneur about their business, land
property (where mortgage is necessary).
 Collect Confidential Information: Another important function of a CRO is to collect
confidential information about the client from various sources. The sources of
information are suppliers regarding the client’s payment, customers regarding the
delivery of goods, various banks where the client has an account, which shows the banks
transactions nature of the client.
 Open Clients Accounts in the Respective Bank: When the CRO decided to provide
loan to the client then he/she help the client to open an bank account where BRAC bank
has a STD a/c. BRAC bank will disburse the loan through this account.
 Fill Up CIB Form: CRO give a CIB (Credit Information Bureau) form to the client and
the client fill and sign in it. In some case if the client is illiterate then the CRO fill the
form on behalf of the client, Then CRO sends the filled and signed form to the SME head
office.
 Sending CIB to Bangladesh Bank: The SME, head office collects all information and
sends the CIB form to Bangladesh Bank for clearance. Bangladesh Bank return this CIB
form within 10-12 days with reference no.
 CIB report from Bangladesh Bank: In the CIB report Bangladesh Bank uses any of the
following reference no:
 NIL: if the client has no loan facility in any bank or any financial institution then
BB(Bangladesh Bank) use ‘NIL’ in the report.
 UC (Unclassified): if the client has any loan facility in any bank or financial

29
 institution and if the installment due 0 to 5.99 then BB use UC in the report.
 SS (Substandard): if the client has any loan facility in any bank or financial
institution and if the installment due 6 to 11.99 then BB use SS in the report.
 DF (Doubtful): if the client has any loan facility in any bank or financial
institution and if the installment due 12 to 17.99 then BB use DF in the report.
 Loan decision considering CIB report: Considering CIB report, BRAC bank
decide whether it will provide loan the client or not. If the bank decides to provide
loan then the SME of head office keep all information and send all papers to the
respective unit office to apply with all necessary charge documents.

3.13.02 SME Loan Recovery Procedure

The repayment process starts immediately after one month of the loan taken. Suppose if a loan is
taken in January 5, 2020 then the repayment process will be started from February 5, 2020 and
the borrower will pay his/her first installment in that date. Before that date, the borrowers will be
informed about the number of installments and amount of each installment. He can deposit the
installment by himself or by the Customer relationship officer (CRO). Again they can deposit the
installments either in any branch of BRAC Bank or in any correspondence bank (where BRAC
Bank has no branch).However, after the borrower repays the loan installments there are number
of steps done in there payment procedure of SME loan. These steps are:

 Receive SMS/Fax for installment deposits: When the borrower repays any installment of
the loan then he/she informs it to the unit office/CRO. Then the unit office/CRO sends an
SMS through mobile phone or a Fax to the loan administration division informing the
repayment. A loan administration division collects these SMS /Fax and takes a paper
print of these SMS.
 Entry the installment information to MBS: Loan administration division entries the
repayment installment information to the banking software.
 Print vouchers: Completing the entry, the loan administration division takes paper print
of all vouchers in a prescribed yellow paper.
 Check SMS/Fax and solve problems (If any): The loan administration is responsible for
all entry in Finacle. If there is any error found in future then the respective officer who is
entering this information in Finacle will be liable for it. User ID will easily identify it. So
they are always aware of to ensure the correct entry.
30
  Repayment voucher check and posting: If it confirmed that all entering information is
correct and there is no error, then the responsible officer of the loan administration
division posts it to Finacle. If one time posted, it is notrectifiable without permission of
the higher authority. So the loan administration is always aware of regarding the recovery
procedures of SME loan.

3.14 Loan Disbursement of SME Banking

 Prepare Loan File: Receiving all documents, Loan Administration Division prepares a
loan file with all documents received from the unit office.
 Charge Documents Checking: The loan administration division checks all charge
documents.
 Prepare Disbursement List: The loan administration division lists all new sanctioned
clients ’details and sends a request to the treasury through internal mail.
 Disbursement of The Amount: Sending the list to the treasury of BRAC bank for
disburse the amount, the treasury disburses the amount to the client through the mother
account of the client’s bank. BRAC bank disburse amount through any of the following
banks corporate branch nearer the BRAC bank head office and the corporate branch of
the respective bank send the amount to the client account.
 Message Sent to The Unit Office: Completing the disbursement, loan administration
divisionsent a SMS to the respective CRO informing the disbursement of the sectioned
loan.

3.15 Security Documentation against Loan

A document is a written statement of facts and a proof or evidence of particular transaction
between parties involved. While allowing any disbursements against credit facilities to
borrowers, it should be ensured that prior to any disbursements; security documentation is fully
and properly completed.

3.15.01 Types of Securities

The following listed securities may be obtained from borrower against loan to enterprises,

31
eitherindividually or in a combination:

 Mortgage of loan and other immovable property with power of attorney to sell.
 Lien of Fixed Deposits receipts with banks and other non-banking financial institutions,
lined, these have to confirm by the issuer.
 Lien of Pratirakshay sanchaypatra, Bangladesh sanchaypatra and wage earner
development bond, all considered Quasi or Near cash items.
 Lien of shares quoted in the stock exchange (This is rarely accepted).
 Pledge of goods (Banks are akin to stay away from such securities now a days).
 Hypothecation of Goods, Book Debt & Receivables, Plant & Machineries.
 Charge on fixed assets of a manufacturing enterprise.
 Lien of cheque, Drafts and order.
 Lien of work orders, payment to be routed through the bank and confirmed by the issuer.
 Shipping documents of imported goods.

3.15.02 Land Related Securities Documentation Process

Each SME unit offices have with at least two local lawyers who will work on behalf of the
bank.These always will be employed whenever a borrower and where the security will be landed
andimmovable property accept a loan sanction. Any one of the lawyers will be provided with
photocopies of all the relevant land related documents and while handing over show the original
documents to them, the lawyers will carry out checks of the originals and if satisfied returned to
the borrower .The documents generally provided are as follows:

 Title Deeds or Deed of conveyance otherwise known as ‘JomeerDalil’ which signifies

ownership of a particular land.
 BayaDalil or Chain of Documents, which signifies that the conveyance of titles has been
proper and legal.
 Mutation Certificate if Khatian which signifies that the title if the land has been duly
registered in the Government/Sub-registrar’s records.
 Duplicate Carbon Receipt or DCR.
 Latest Khajna or land rent receipt.
 Purchase such as CS Khatian, SA Khatian and BS Khatian.

32
  Mouja Map.
 Municipal rent receipts if the land falls within a municipal area.

3.15.03 Other Security Documents

The documents are as follows:

 Letter of Undertaking: This is a Deed of agreement executed by the borrower agreeing to

commit to carry out any or a particular obligation to avail of loan/credit facility.
 Letter of Hypothecation of Goods & Stocks and Book Debt and Receivable:These letters
Hypothecation are actually two different sets of documents but because of their
similarity, these are being explained together. These documents create an equitable or
floating charge in favor of the bank over the goods and services and/ or book debts and
receivables that are being financed where neither the ownership nor the possession is
passed to the bank.
 Letter of Hypothecation of Plant & Machinery: Under this agreement, the Borrower
undertakes to keep the present plant and machinery at the present location in good
condition and which gives the bank the power to posses and sell the mentioned plant and
machinery to meet the borrower’s dues to the bank.
 Letter of Lien: A lien the right of one person to retain property in his hands belonging to
another until certain legal demands against the owner of the property by the person in
possession are satisfied. Thus a bank or a creditor who has in its possession a lien over
the goods in respect of the money due by the borrower, as a general rule has the right to
exercise certain powers to hold on to the security.
 Right of Set Off: This deed of agreement gives the bank the right to offset the value of
the goods or financial instrument in its possession and which has been discharged by the
owner of that asset, against dues owned by the borrower.
 Letter of Disbursement: This agreement gives the bank the right to possess goods and
other assets in rented or leased premises of the borrower despite the fact that owner or the
premises may be unable to realize dues from the borrower himself.
 Personal Guarantees: This is a guarantee of a person or third who is not the direct
beneficiary of the loan/credit facility, but is equally liable for the loan. The involvement
33
  of a 3rd party creates additional pressure on the borrower to minimize the risk. The
guarantor has to pay the entire outstanding loan and interest if the borrower fails to pay
for any reason.

3.16 Financial Performance- Portfolio Analysis

In terms of total assets, BRAC Bank grew by 13% (BDT 36,230 million) to reach BDT 315,417
million in 2018. Such growth was in part fueled by an 18% (BDT 35,449 million) increase in
loans and advances.

Figure 3.3: Percentage of Loans and Advances of Total Assets

Source: Annual Report 2018

In 2018, the bank maintained its emphasis on itsSME portfolio. It also maintained its
commitment toestablishing a platform to better serve customers and this contributed to the
notable total assetsincrease.

34
3.16.01 Segment Wise Performance Analysis
Across the bank, all business segments in term of portfolios and revenues have grown.

Figure 3.4: Segment Wise Loans & Advances for 2017 & 2018

Source: Annual Report 2018

Interpretation: It shows that the bank’s loan portfolio, amid testing market conditions,
grewhealthily (18%). The corporate segment contributed significantly (24% growth), while SME
(17% YoY growth) and retail (4% YoY growth) also played notable parts in 2018.

3.16.02 Segment Wise Operating Profit

Figure 3.5:
Segment Wise
Operating Profit for
2017 & 2018

Source: Annual
Report 2018

35

Interpretation: Looking at figures per segment, operating profit rose by 29% in retail and by
8% in corporate. Meanwhile, the SME segment’s revenue dipped marginally. Overall, the bank’s
revenue performance improved in 2018.
3.16.03 Geographical Location-Wise Portfolio

Figure 3.6: Geographical Location Wise Loan Portfolio in 2018

Source: Annual Report 2018

Figure 3.7: Geographical Location Wise Loan Portfolio in 2017

Source: Annual Report 2017

36

Interpretation:During the reporting period, BRAC Bank’s concentration of loans rose by 19%
in Dhaka division and 30% in Khulnadivision. This was measured according to where branches
are located.By reaching out to people from all across Bangladesh via its branches and SME unit
offices, BRAC Bank maintains a geographically diverse loan portfolio.

3.17 Analysis of SME Loan from Year 2017 to 2018

BRAC Bank Ltd. is gradually empowering different entrepreneurs under SME sectors in Dhaka
and many other areas in Bangladesh. Especially women entrepreneurs are being encouraged and
strengthen to established and run business, meet up working capital and other required fund.
Govt. of the country also are emphasizing to accelerate SME financing because it can take a part
in the overall economic development in our country.

3.17.01 SME Loan Percentage in 2017

Segments Percentage (%)
Agriculture 1%
Communications 2%
Construction 1%
Consumer Credit 10%
Other loans 4%
Other Manufacturing Industry 14%
Power Sector 2%
Residential Real Estate 8%
RMG 5%
SME 39%
Textile 7%
Trade 6%
Total 100%

Table 3.3: Percentage of Loan in 2017

Source: Annual Report 2017

37

Graphical Analysis:
Graphical analysis of sector wise loan(%) in 2017 is given below:

Figure 3.8: Percentage of Sector Wise SME Loan in 2017

Source: Annual Report 2017

Interpretation: It shows in 2017 BRAC Bank has made 39% of its total loan portfolio which is
huge compared to other banks in the industry.

3.17.02 SME Loan Percentage in 2018

Segments Percentage (%)
Agriculture 1%
Communication 1%
Construction 1%
Consumer Credit 11%
Other Loans 8%
Other Manufacturing Industry 19%
Power Sector 1%
Residential Real Estate 7%
RMG 5%
Ship Building 0.1%
SME 32%
Textile 6%
Trade 8%
Total 100%
Table 3.3: Percentage of Loan in 2018

Source: Annual Report 2018

38

Graphical Analysis
Graphical analysis of sector wise loan (%) in 2018 is given below:

Figure 3.9: Percentage of Sector Wise SME Loan in 2018

Source: Annual Report 2018

Interpretation:As well as SME lending, BRAC Bank pays attention to all sectors. During the
year 2018, the manufacturing sector made up 19% of its total loan portfolio, with the trade sector
making up 8% and Consumer Credit 11% of total loan portfolio. Although SME sector made
32% which is less than the previous year.

39
 Chapter Four

Findings, Recommendation and Conclusion

4.1 Findings
  BRAC Bank Ltd activity participates in the growth and expansion of the national
economy by providing SME loan to viable. While analyzing the SME lone policies and
procedures of the Bank, the following areas are mostly viewable:
 Most of the proprietors use this SME lone for purchasing raw materials. The other major
use of the SME lone is for meeting salary and daily expenses.
 It has been found that it took less than 1(one) month between loan application and
sanction and around 1 month to get the loan. That means BRAC BANK SME is serving
the clients quite well in terms of granting SME loans.
 Verification agencies sometimes become even longer due to delay submission of CIB
report.
 Re-verification is not done regularly due to time constraints.
 BRAC BANK Ltd SME service should be more attractive in time length between loan
applications and loan payment.
 From the data, it was found that most of the proprietors have 5-10 years of experience
who are currently getting the SME loan.
 The maximum age limit for taking any SME loan program is 60 years according to
(PPG).
 The business target pressure is very high in BRAC BANK Ltd. Last year end 2018 the
target was assigned on yearly basis to the permanent employees but in the year of 2019 it
become to quarterly basis business target. Which also create panic and face to high
employee turnover rate

41

4.2 Recommendations
The following suggestions are put forward for present and future sustainability of the SME of
BRAC Bank Limited: Age, experience, income, past loan history of the entrepreneurs should be
given more priority and analyzed properly before lending. Because this variables have major
effects on loan recovery. BBL should initiate some promotional activates and advertise heavily
to inform the general public about their SME products and also inform the people that BBL is a
bank like other bank, it is not an NGO. Features of SME products should be designed more
attractively compared to the competitors to lower the level of risk and attract more potential
customer. To make this happens BBL should research competitor’s products periodically.
Bottlenecks or barriers should be removed by taking advanced step in mode of disbursement,
charge documents and approval process. Loan facility parameter should be expanded so that all
the people can get loan according to their needs. Business Power for sanctioning loans and
advances can be increased at branch level. CRO’s are the major media between bank and
customers. They have given certain no of customer targets in a month. To fulfill their target they
don’t analyze borrowers’ history, as a result no of defaulter increasing day by day. Also CRO’s
are not satisfied with compensation package provided to them. So bank should take some
corrective actions about these matters. More SME service center need to be added to fully take
the advantage of the huge potential customer segments.

42

4.3 Conclusion
BRAC Bank limited is a strong and effective player in the financial system. It is a solid forward-
looking, modern local bank with a record of sound performance. It is a new generation bank. It is
committed to provide high quality financial services/ products to contribute to the growth of
GDP of the industrialization, boosting up export, creating employment opportunity for the
educated youth, rising standard of living of limited income group and overall sustainable socio-
economic development of the country. The bank has the vision to the best private Commercial
Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management
etc. The bank must make a positive attempt to be more outward looking in their goals and aware
of what is happening. They must also emphasize on the domestic scenario more closely and
analyze any certain trends and strategies of their competitors. The bank must accept any failures
and think of them as an objective to pursue future goals instead of blaming such failures on other
factors and in this way the Bank will be able to keep on playing its important roles in our
economy.

43

Bibliography
Books & Articles

Bernstein, L.A. (1993) Financial Statement Analysis, (5th Edition). USA: Irwin.

Chowdhury,L.R.(2002). A Text Book on Banker’s Advances,(2nd Edition).

Grrison R.H. Noreen E.W. & Brewer P.C. (2016). Managerial Accounting (15th Edition). New
York: Mc Grow-Hill Education.

Hefferman, S. (2007) . Modern Banking Studies (3rd Edition). New York : James Publishers Ltd.

Irukwa, J.O. – Risk Management in Developing Countries; Witherby & Company Ltd,(1991).

Web References

 https://www.bracbank.com/en/about-us/
 https://www.bracbank.com/en/about-us/#corporateVisionMissionValues
 https://www.bracbank.com/en/#sme

Annual Reports

 Annual Report-2016, BRAC Bank Ltd.

 Annual Report-2017, BRAC Bank Ltd.
 Annual Report-2018, BRAC Bank Ltd.
 44

Appendix
Appendix

Assets

Particulars June 30, 2018 June 30, 2017

Cash & due from Bank $76,878 $111,628
Short term investments 214,731 295,292
Securities available for sale 1,404,300 1,432,146
Accrued interest receivable 29,542 26,664
Equipment 70,000 66,500
Other asset 300,000 280,000

Liabilities &Retained Earnings

Particulars June 30, 2018 June 30, 2017

Savings $325,780 384,452
Interest 976,645 1,064,915
Investment 359,649 478,996
Liabilities 201,500 204,300
Borrowed 182814 201,700
Capital 1,576,900 1,449,550
Retain earnings 25,260 88,600