Master Paper on

Role of Commercial Banks in Entrepreneurship Development: A Study

in Dhaka Bank Limited.

Submitted by:
Md.Rasel Miah
SID No.181-33-812-021
Major : Finance & Banking
MBA Program
Semester-192
 Statement of the Problem
The owner and entrepreneur face many problems like collaterals,
documentation, high interest rate, loan recovery period etc. So this
study is conducted to know the problems faced by entrepreneurs
borrowing loan i.e. The major alternative for the provision of such
capital is the financial institutions and among the financial institutions
operating in the country, commercial banks are the major sources of
credit to the various sectors of the economy. However, it is common
knowledge that getting financial support from commercial banks has
been grossly inadequate for budding entrepreneurs and even for those
who have been in the manufacturing business for a long term.
 Objectives of the Study

• To identify the role of Dhaka Banks in the development of

entrepreneurship.
• To explore the problems faced by entrepreneurs in
borrowing loans.
• To find out the ways to overcome the problem.
 Methodology of the Study:
• This is Descriptive Research
• Primary and secondary data were used in the study.
• sample size for the research work is 45 comprising of 30 Loan officers and 15
entrepreneurs under study in 10 Branchs Dhaka Bank, Dhaka City.
• The primary source was mainly through the questionnaire distributed to some
selected bank Loan officer and SME’s Loan officer in Dhaka Bank and also backed
up with personal observations, and interviews. The secondary data was from the
available related literature, textbooks, journals, magazines, newspapers, Annual
Report and periodicals which were very informative.
• To analyze the processed data tabular and graphical representations were made
in MS Word and Excel, and were presented through the use of statistical
techniques such as figure, frequency counts, percentage.
 Key Findings
•Dhaka banks have contributed to the development of entrepreneurship
through their loans and advances. Dhaka Bank Provide loan to
entrepreneur 9.0 to 9.5 percent interest.
•The entrepreneur encounters problems in the procurement of loans from
commercial banks because most of them don’t have collateral and
requirements documents from the banks in assessing loan and advances.
•If Dhaka Bank Limited provide to entrepreneur lowest rate interest loan,
less documentations, collateral, reference and longtime loan payback
period.
 
 

 
 Conclusions
The study revealed among others that SMEs encounter problems in the
procurement of loans from Dhaka banks. The study also revealed that Dhaka
banks have contributed significantly to the development of small and medium
size enterprises through their loans and advances. Also the study revealed that
SMEs have significantly contributed to the development of Bangladesh
economy. It is seen from the study that the role SMEs play in the process of
economic growth and development are;
SMEs act as a catalyst for growth and development. They are the major
source of employment. Provide training avenues for local entrepreneurs in
several areas of economic activities. Aid the process of income redistribution.
Sound development of SMEs has positive implication for improving the
standard of living of the citizen.
 Recommendations
A number of procedures can be adopted such as preferential discount rates,
multiple discount rates or quotas favoring certain purposes. The banks
themselves can ensure maximum risk of the loan losses by providing
technical and managerial resources to various kinds of small entrepreneur
customers. This would assist them in project preparation, implementation,
financing and management. At the same time, small scale entrepreneur can
avail themselves to such services provided by the government at the
entrepreneurial development center. In order to make credit available to
entrepreneurship development sector, the banks and the government should
make use of the rural banking program. The branches of each bank in the
rural community should be given free hand to take certain decisions
concerning advancement of these loans and advances to rural small scale e
entrepreneur. They should be able to act as ‘management consultants’
identifying problems and suggesting solutions.