feasibility study of student loan
DESCRIPTION
Feasibility Study of Student Loan of Bank AsiaTRANSCRIPT
FEASIBILITY STUDY OF STUDENT LOAN FOR BANK ASIA
Course Name : Social Research Methodology
Course No. : 306
Submitted By :
Sharmen Saife : 58 (RK) Sharmin Hanif : 65 (RK) Mousumi Goswami : 69 (RK) Halima Akhter : 70 (RK) Kamrun Naher : 78 (RK) Sheikh Humaira : 80 (SN)
Department of Statistics, Bio-Statistics &
Informatics
1
University of Dhaka
2
The introduction of retail banking in Bangladesh has led the banking
industry to the doorstep of embryonic prospects and potentials.
Consequently numerous local and foreign banks came as being in this
country to avail the ample of opportunities for their financial betterment.
In recent years, the banks are aggressively pursuing their marketing
strategy to grab new segments with intent to explore new opportunities.
Ignited by the strategic intent, innovation of new products and service
exhibited remarkable increase. ATM, credit card, debit card, online
banking, M-banking, personalize loans etc. are some of the outcomes of this
continuous innovation and improvement.
However, not all the opportunities have been availed yet. Still there are
numerous opportunities are present and some more to emerge. It needs
continuous improvement and customer orientation to be able to avail those
opportunities to a wide extent.
Background of the study:
Recent decades have witnessed not only fierce competition but also a wider
degree of customer orientation in service industries, especially in banking
sector in Bangladesh.
Besides the local banks the foreign banks are continuously competing for
the opportunities prevalent in the market. The profit-making urge fueled by
the ample of opportunities has intensified the rivalry among the banks and
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so as the degree of persuasion of customer orientation. Innovation on new
products and services resulted in as a consequence of this competition.
Even if Bank Asia Limited is not confronting extreme difficulties, yet it is
lagging behind to some extent to its major competitors. Competitors like
Standard Chartered or HSBC through their service innovation; have placed
themselves in advantageous position .At the same time this put pressure on
their counterparts to engage in a battle of innovation and to involve in a
continuous effort to come up with products and services that better fit the
customers need.
BANK ASIA Started to provide their service in Bangladesh in 27th Nov year
1999. Bank Asia has been launched by a group of successful entrepreneurs
with recognized standing in the society. The paid up capital of the Bank is
1116 million. The management of the Bank consists of a team led by senior
bankers with decades of experience in national and international markets.
The senior management team is ably supported by a group of professionals
many of whom have exposure in the international market.
Within a short span of time Bank Asia has established itself as one of the
fast growing local private banks. It has at present a network of Twenty-
three branches serving many of the leading corporate houses and is
gradually moving towards retail banking.
Growth of the Bank :
The asset and liability growth has been remarkable. By Dec 2007 the total
asset of the Bank grew to Tk 30,478 million, increase of almost 30%
comparing to 2006. As of Dec 2007 deposits increased to Tk 25,289 million,
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an increase of 37% over that of 2006, and Loans & Advances reached Tk
22,256 million, an increase of 25% over that of 2005. Bank Asia has been
actively participating in the local money market as well as foreign currency
market without exposing the Bank to vulnerable positions.
Mission Statement
To assist in bringing high quality service to our customers and to
participate in the growth and expansion of our national economy.
Vision statement :
Bank Asia’s vision is to have poverty free Bangladesh in course of a
generation in the new millennium, reflecting the national dream. Our vision
is to build a society where human dignity and human rights receive the
highest consideration along with reduction of poverty.
Products and services:
Gradually Bank Asia increases its product list. Every year Bank launches 2
products. Since establish, Bank’s product list is so healthy and includes
most features. Whenever, Bank launch a product, they look deeply in its
technical issue. It’s mean, how the product will be techno based and
support online features.
Products and services Include:
SMS Banking
Through SMS facility you can access your account using your mobile phone
scenario from anywhere, anytime at your convenience to know the account
position.
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Customized Loan
Modern Banking is a result of evolutions driven by changing economic
activities and lifestyles. Bank Asia Ltd. is a new entrant in the private
banking of Bangladesh. It is an immense pleasure for Bank Asia to introduce
Customized Loan to its customers as a unique Loans plan.
Internet Banking
Bank Asia symbolizes modern banking with innovative services in
Bangladesh. It has centralized Database with online ATM, SMS and Internet
query service. You can use credit/debit card facility with ATM. For SMS
service you should have personal cellular phone with at least one account in
Bank Asia.
Bonus Savings Schemes
Bank Asia Ltd. promise to fulfill every possible customer need with high
efficiency and satisfaction. Its team of dedicated professionals is committed
to provide an unparalleled service by using the latest technology to make
bankable proposals harvest maximum benefits for the customers, the
shareholders the society at large. It is an immense pleasure for Bank Asia to
introduce Bonus Savings to its customers.
Mobile Banking
M-Banking allows customers to access their bank accounts from their
Mobile Phone. This latest technology driven product is designed to cater for
and facilitate real time banking transactions using a mobile phone currently
available to AKTEL subscribers only.
Poverty Alleviation
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Bangladesh is a highly populated developing nation, where 80% of the
people living in the rural areas. But these people can’t engage themselves
with development and production activities due to unavailability of capital.
Bank Asia highly dedicated to establish rural branches to empower the poor
people.
Objectives of the Scheme:
To help people by providing loan facilities to establish fisheries plant,
Poultry firm, small and cottage industry, village transport and small
engineering workshop as well as to establish computer-training center
where electricity supply is available. It will help to create employment
opportunities for the unemployed young people.
Through the research I tried to introduce a service that possibly can be
provided by Bank Asia to some degree of competitive edge over its
counterparts.
Student loan, a relatively new concept in Bangladesh even if is widely
practiced in Europe and the west part of the world. The wide spread of
education industry in Bangladesh and the obvious need for human resource
development propelled the potential for the student loan in our country
context. Considering the potential, I was aspired to conduct a feasibility
study of student loan in Dhaka, with special reference to Bank Asia Limited.
Statement of the problem:
The need for human resource development with attention to quality,
relevance and timeliness led to the establishment of non government
universities in Bangladesh very recently. Despite of difference in the tuition
fees among universities, mostly these universities are very expensive.
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Except for the affluent class it becomes burdensome for most of the middle-
income group to put up with the educational expenses.
Even though there is a provision of financial assistantship in most of the
private universities but the range is not adequate enough and not all the
students are eligible to grab this opportunity. Thus there is a need for
supporting meritorious students financially through loans & grant.
There are also students who are willing to study abroad but cannot afford to pay the whole tuition fees at a time. In addition to this three are also professionals who are undergoing different professional courses like –MBA, CMA, CA, MSC, PHD etc in different educational institutions. Sometimes serving the family and finance their own educational expenses simultaneously become troublesome from their part. These students are also a potential market of the student loan for the financial institutions.
The focus of the entire research will be to explore the prospects & the
probable risk associated with the student loan scheme.
Literature Review:
Haq Muhammad Ziaul & Barua Abhijit in their article “Student Loan
Scheme for Higher Education in Non-Government University of Bangladesh:
Risk and Prospects.” This paper has developed a detailed proposal for
partial financial assistance from commercial banks for meritorious but
needy students pursuing professional degree, diploma and certificate
courses in Non-government University. Through the research the authors
came up with a bold proposal worthy of consideration for the human
resource development and social transformation in Bangladesh to promote
education on the basis of merit rather than on ability to finance. The
proposal is outlined as more like a social responsibility of banks
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towards the society with minimal profit. The transaction process will be
between the institution and the bank on account of the needy students.
According to the proposal of the researchers, the loan will cover only partial
tuition cost (20% -80%), with an average of 50% .The loan will be created on
semester basis and is to be directly paid to the institution. The loan will
bear an interest rate of 1% or 2% above the central banks borrowing rate. A
3% additional charge will be made to create a risk coverage fund. Loan
period will be same as study period and an additional 6 months for
employment income generation. The students shall be primarily liable for
the loan and shall produce a guarantor to ensure some degree of
assurance .The recovery of funds for failure cases can be maximized with
the introduction of a fund to cover bad debts and also to buy an insurance
policy if available for bad debts. Although the contribution of this loan
scheme to the profit of bank is very low, bank might be interested in this
offer as a part of their social commitment towards the development of the
country in the long run, develop some of its existing, manpower and future
executives with minimal cost and risks and lower risk of default.
Finally, the authors believe that the proposal is bold, innovative and worthy
of consideration for the human resource development and social
transformation in Bangladesh to promote education on the basis of merit
rather than on ability to finance.
Williams John in his article “Student Loans: An effective Instrument For
Cost Recovery In Higher Education ” has introduced the audience to
different kinds of student loan schemes offered by either government or by
the commercial banks in United States of America to the US or other
foreign students to finance their study. The article also encompasses the
procedure and the types of alternatives to be pursued to overcome the
unpleasant consequences. In this article the author has described two types
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of student loans - federal loans & private loans. The federal loan is granted
to the students if they have any permanent source of income and a good
credit history, the Federal Parent Loans for Undergraduate Students
(PLUS) loans are granted to creditworthy parents of undergraduate
students and
can be used to cover up to the total cost of your education. Private loans
offered by the commercial banks and there are no limits as to what the
interest rate will be for a private loan. So a student who signs up for a
private student loan at six percent can end up paying as much as 19 percent
after they graduate. Private student loans can also check up on a student's
credit history and charge more if a student has poor credit records or no
history at all. An exhausting list of papers regarding the financial
information, contact information, credit history, present and past
occupations and employer information, proof of enrollment, proof of
citizenship or permanent resident status and so on will be needed to apply
for the loan. The extent of the documentation will leave no aspect of ones
life private. Failure to repay the loans on time or according to the terms of
condition undertaken, will affect credit rating and this default may even
ended up with legal proceedings. However, to avoid the disputes the
applicants can talk to their financial advisors in the institution and can
obtain flexible payment terms with enhanced time period and affordable
interest rate.
Recently in Bangladesh some of the private banks are providing student loan, but the extent of
the aid is not sufficient enough to support the rising demand. In the research an effort has been
made to explore the prospects and problems of student loan for in Dhaka for Bank Asia
Objectives of the study:
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The objective of the research is “Feasibility Study of Student Loan For Bank
Asia.”
1. To explore the prospects for student loan in Dhaka city.
2. To identify the problems of student loan in Dhaka city.
3. To prepare a model loan scheme for Bank Asia.
Hypothesis:
Hypothesis:1 Null Hypothesis:
H0: Bank Asia should not provide unsecured loan Alternative Hypothesis: H1: bank Asia should provide unsecured loan
Hypothesis:2 Null Hypothesis: H0: Higher recovery rate is not the indicator of the prevalence of the feasibility of the study loan. Alternative Hypothesis: H1: Higher recovery rate is the indicator of the prevalence of the feasibility of the study loan.
Hypothesis:3 Null Hypothesis: H0: Bank Asia should not introduce student loan scheme to Compete with HSBC & SCB. Alternative Hypothesis: H1: Bank Asia should introduce student loan scheme to compete With HSBC & SCB.
Hypothesis:4 Null Hypothesis: H0:: Less interest rate is not appealing to the consumers Alternative Hypothesis: H1: Less interest rate is appealing to the consumers.
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Hypothesis:5 Null Hypothesis: H0: Better loan system with competitive interest rate can not meet the needs of both students & Bank. Alternative Hypothesis: H1: Better loan system with competitive interest rate can meet the needs of both students & Bank.
Hypothesis:6 Null Hypothesis: H0:: Other Banks are not competitive & not doing well in this regard. Alternative Hypothesis: H1: Other Banks are doing well & competitive in this regard.
Hypothesis:7 Null Hypothesis: H0:: Bank can’t earn profit without initializing student loan Alternative Hypothesis: H1: Bank can earn profit without initializing student loan.
Hypothesis:8 Null Hypothesis: H0:: Student loan can not bring differentiation among Banks. Alternative Hypothesis: H1: Student loan can bring differentiation among Banks.
Hypothesis:9 Null Hypothesis: H0:: Student loan scheme can bring neither goodwill nor attention of prospective consumers like students. Alternative Hypothesis: H1: Student loan scheme can bring both goodwill & grab attention of prospective customers like students.
Sampling Design:
For sampling Non-probability sampling should pursued.Two types of Non Probabilistic Sampling should be used in this research
1. Judgmental sampling
2. Snowball Sampling.
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At first for selecting students, by using Judgmental sampling a sample of
150 students will be taken.. Then 30 students from Independent university
Bangladesh, 30 from Premier University, & 30 students from Brac
University should be interviewed. Also 30 professional students will select
from these universities, 10 professional students from each university. In
addition, 30 students who are preparing for studying abroad also been
interviewed and snowball sampling will be used in this regard. In a nutshell
to ensure the representation of different types of students in the sample 90-
fulltime students, 30 professional students and 30 students who are willing
to study abroad will be in the sample.
For selecting banks judgmental sampling have been used and 3 banks
HSBC, SCB, EBL have been selected.
Methodology: Sampling plan:
1. Population :
(a) Population of students:
All the students & professionals who need financial assistance to
support their study either in this country or in abroad
(b) Population of bank:
All the commercial banks in Dhaka city.
2. Sample Unit
(a) Sample Unit for students:
The students (fulltime & professional students) of 3 leading private
universities Independent university Bangladesh, Premier University,
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Brac Universities will be the respondents of the research. These 3
universities will be considered as the sample unit for students.
(b)Sample Unit for banks:
The executives of the banks that have the student loan scheme have been
interviewed. The sample unit for the banks is the branches (Dhanmondi)
of HSBC, Standard Chartered and Eastern Bank Limited of Dhaka
Methods of data collection:
The report will be completed by both primary and secondary sources of
data.
Primary Data:
Primary data will be collected by using the following two tools.
1. Questionnaire Method.
2. Direct Interview Method.
Primary data will be collected by informal interview with the students of the
educational institutions. Some information will be collected through
discussion with different executives of the Banks. Also Data have been
collected through questionnaire from the students of private universities as
well as the executives of the selected banks .Two separate structured
questionnaires have been used to collect information from the students and
the bank personnel.
Secondary Data:
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The secondary data will collected from the “Credit Manual” brochure
published by other banks and from some journals. Also some important
information will collected form Internet for the analysis.
Method for Analysis:
In order to analyze and interpret data some tools of statistical analysis
have been used .The statistical tools to be followed are –
1. Mean.
2. Percentage.
3. Cross tabulation
4. Median
5. Standard deviation
6. Standard error.
Time schedule:
Our six month work plan is given below by GANTT CHART.
Month
Activities July August September October November December
1. Preparatory activities
2. Recruitment, training & pre-testing
3. Data collection
4. Data editing, coding & entry
5. Data analysis
6. Preliminary reports & dissemination
7. Final report
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Financial Budgeting:
Expenses Local Taka
A. Materials, supplies & computer services
1 Questionnaire printing 500
2 Editing & typing 500
3 Computer programming 500
4 Report Printing & mailing 1000
Sub-total 2500
B. Travel
1 Pre-testing of questionnaire 500
2 conveyance 3000
Sub-total 3500
C. Dissemination Seminar 2000
D. Miscellaneous expenses 2000
Total funding required(A+B+C+D) 10000
Summary of the Study:
There is a strong demand of student loan in the market. The demand is stronger among the
middle-income and the lower middle-income group of the market, who are ready to pay high
interest rate. Usually the high-income group is safer than the middle-income group but this
middle-income group is more lucrative in terms of profit potential. banks. Although student loan
is risky it will be highly profitable
In recent years, both the foreign and local banks are aggressively pursuing
their marketing strategy to grab new segments with intent to explore new
opportunities. Introduction of student loan will not only bring high profit
potential but also it will provide Bank Asia a competitive edge over its major
competitors.
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Besides strengthening the competitive position in the long run the
introduction of student loan will contribute to a wide extent to the human
resource and socio economic development of Bangladesh, which will in tern
enhance the brand image of Bank Asia in the consumers mind.
4.0 Findings and Analysis
Awareness regarding Student Loan:
Frequency Percentage
Aware 129 87%
Unaware 21 14%
Most of the students are already educated about the idea of student loan.
So it will be easier for Bank Asia to create awareness if they lunch the
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student loan since the market is already aware about the product.
he probable consequences in case of defaults
Willingness of students to take student loan:
Frequency Percentage
Willing 145 97%
Unwilling 5 3%
There is a prevalence of a high level of willingness among the students to
take student loan, which may be an indicator of the level of existing
demand.
Relationship between income level and customers expected interest
rate:
Interest rate
Income 5% - 8% 9% - 12% 13% - 16% 17% - 20%
50000+ 40% 26.6% 20% 13.4%
41000-50000 42% 36% 16% 6%
31000-40000 3.6% 5.4% 34.5% 56.5%
21000-30000 3% 9% 36.5% 51.5%
10000-20000 60% 30.4% 8.6% 1%
Relationship between income and types of security:
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Means of
Security
Income
Physical Asset
Financial Asset
Guarantor’s A/C
Income Statement /Pay Slip
50000+ 33.3% 40% 13.3% 13.4%
41000-50000 26.3% 36.8% 15.7% 21.2%
31000-40000 3.6% 12.7% 30.9% 52.7%
21000-30000 3% 12% 51.5% 33.5%
10000-20000 4.3% 8.6% 47.8% 39%
By Analyzing both the charts it is found that, the upper income group that is
safer in terms of their ability to repay the loan and is able to keep physical
and financial assets as security are willing to pay very low interest rate for
student loan. Therefore serving this segment might not be profitable in the
long run because once the loan is repaid the security will be withdrawn and
a little interest will be left for the bank as profit.
Interestingly, most of the middle-income group and a significant portion of
lower middle-income group are more willing to pay an interest rate higher
than that of the high-income group for student loan. Since these income
groups find it difficult to manage a big amount of money to pay tuition fees
at a time, they are even ready to pay a high interest rate for the loan.
Therefore there is a strong demand for student loan in this segment. But
serving these segment bear a major risk, since a lion portion of these
income groups are only able to exhibit Guarantor’s A/C and parents Income
Statement as their ability to repay the loan.
Customers expectation regarding the security of the loan:
Type of loan Frequency Percentage
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Secured 40 27.5%
Unsecured 105 72.5%
Majority of the consumers are asking for unsecured loan that has made the
student loan offer little bit risky. Moreover the major competing banks
HSBC and SCB are offering unsecured loan so it will be difficult for Bank
Asia to sustain the competition unless they offer unsecured loan. But
unsecured loan carry the risk of defaulting.
Recovery rate of student loan of the banks:
Banks Recovery rate Average recovery
rate
HSBC 98%
SCB 97.5%
EBL 100%
In spite of having a little risk of defaulting, the average recovery rate of
student loan of the existing banks is 98.5% .The high recovery rate indicates
that a strong feasibility of student loan is prevalent in the market for the
banks.
Portion of the profit of banks contributed by student loan:
Bank
Contribution to
profit
Average contribution to
profit
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HSBC 3.7%
SCB 4.2%
EBL 1.1%
All those 3 banks have enormous variety of products, student loan is just
one of those many. Student loan is contributing on an average 3% of the
total profit of the banks, which is really a considerable share of profit
generated by one product out of many.
Abstract of analysis:
The analysis revealed that there is a strong demand of student loan in the
market. The demand is stronger among the middle-income and the lower
middle-income group of the market, who are ready to pay high interest rate.
Interestingly, the high end of the market is less enthusiastic about the loan
and is willing to pay a little interest rate. Both the segment has pros and
cons. In terms of security, the high-income group is safer than the middle-
income group but this middle-income group is more lucrative in terms of
profit potential . A little portion of the market is able to take secured loan
while majority is asking for unsecured loan, making the loan subject to the
risk of recovery. However, the current recovery rate of the banks for
student loan scheme is a significant 98.5%, which signals the enormous
opportunity aligned with little recovery risk. Student loan is contributing
3% of the total profit to the banks, which indicates a high degree of profit
potential for the banks. To conclude, although student loan is risky yet it
might be highly profitable.
The third objective of the report is to develop a model student loan scheme.
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From the questionnaire survey and the brochures of HSBC, SCB and EBL
detailed information about their student loan Scheme has been collected.
Comparative features of student loan:
HSBC SCB EBLInterest rate 17% 19% 13%
Loan type Unsecured Unsecured Secured
Terms 4 times of salary
Assessment of bank statement
90% of security
Minimum salary requirement
18,000 TK N/A N/A
Maximum loan amount
750,000 TK 10,00,000 TK 90% of security
Maximum loan period
4 years 4 years 4 years
Reviewing the offerings of the competitors and considering the expectation
of the students, the profit potentiality of the bank a model student loan
scheme is proposed for Bank Asia.
From the analysis it is revealed that there is a strong demand for unsecured
loan and the major competing banks HSBC and SCB are offering unsecured
loan so it will be difficult for Bank Asia to sustain the competition unless
they offer unsecured loan. However a reasonable portion (27.5%) of the
consumers are able to keep security. Therefore bank Asia must offer
unsecured loan and at the same time there also should be a secured loan
scheme to grab the secured portion of the market.
A model student loan scheme for Bank Asia:
Loan Type: Unsecured Loan
Features:
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1 Interest rate ranges from 13 % -20 % based on the loan period.
2 Maximum TK.15,00,000 can be granted as at a time.
3 Applicants can get a loan up to 16 times of their monthly income.
4 Loan can be repaid in 6, 12, 18, 24, 30, 36, 42 & 48 installments.
Security:
1 No cash security is required.
2 Applicant must submit income statement /pay slip or bank
statement of financial guarantor.
3 Applicant must produce two guarantors.
4 Parents as guarantor are more preferable.
5 For employed applicants guarantee from the employer is required.
Additional Benefit:
1 1 year of additional period of time will be given in case of inability to
repay the loan within loan period (condition applicable).
Special case:
2 If the expected loan amount exceeds 16 times of monthly income,
partial security is required.
Eligibility:
1 Applicants/parents must have an income of Tk. 21,000 to be able to
avail the scheme.
Terms and conditions:
2 In case of the additional loan period 3 % spread over current interest
will be charged on the due amount.
3 Missed installment will attract a penalty of Tk. 200 for each.
4 Fake documents will lead to rejection of the application.
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Loan Type: Secured Loan
Features:
5 Interest rate ranges from 12 % -18 % based on the loan period.
6 Maximum TK.30,00,000 can be granted as at a time.
7 Applicants can get a loan up to 98% of the security.
8 Maximum loan period is 10 years.
Security:
1 Both physical asset and financial assets can be kept as security.
2 Fixed deposit (in Bank Asia or in any local bank) is more preferable.
Eligibility:
1 Applicants/parents must be able to keep physical asset and financial
as security.
Terms and conditions:
2 Applicants/parents must be the sole-owner of the assets to be
mortgage.
3 Missed installment will attract a penalty of Tk. 200 for each.
4 Fake documents will lead to rejection of the application.
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5.0 Recommendation:
Recent decade have witnessed not only fierce competition but also a wider
degree of customer orientation in service industries, especially in banking
sector in Bangladesh. Bank Asia as being one of the fast growing banks
must therefore put their emphasis on new innovation and introduction of
new products and services.
To remain competitive Bank Asia must be enthusiastic enough to
continuously explore and grab the opportunities that are prevalent in the
market. The wide spread of education industry in Bangladesh and the
obvious need for human resource development propelled the potential for
the student loan in our country context therefore launching the student loan
scheme might provide them with a strong position in the market at present
and in the future.
Eventhough there is a strong demand for student loan in the market that
may lead to huge profit yet there is risk of recovery also associated. Since
the lion portion of the market is demanding for unsecured loan, the profit
may get affected adversely. However, the degree of risk regarding the loan
recovery can be reduced by increasing the documentation process and by
engagement of more reliable financial guarantors.
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Bank Asia can also create a risk coverage fund by charging a risk premium
to the loanee on quarterly or annual basis to reduce the uncertainty. Bank
can also involve the concerning educational institutions in the
documentation process so that the authority can take disciplinary action
against the student if any problem arises with the bank regarding the
repayment issue.
Bank Asia can also observe and collect information about the Banks that
already started the service and analyze the benefit. By studying the result of
the report it is recommended that Bank Asia should think about introducing
the student loan scheme.
6.0 Conclusion:
In recent years, both the foreign and local banks are aggressively pursuing
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their marketing strategy to grab new segments with intent to explore new
opportunities. Introduction of student loan will not only bring high profit
potential but also it will provide Bank Asia a competitive edge over its major
competitors.
Besides strengthening the competitive position in the long run the
introduction of student loan will contribute to a wide extent to the human
resource and socio economic development of Bangladesh, which will in tern
enhance the brand image of Bank Asia in the consumers mind.
Appendix A User Interface
Questionnaire for students
I am a student of Independent University and currently enrolled for my
Internship program in Bank Asia Ltd. I am conducting this survey to
prepare my Internship report on “Feasibility Study of Student loan in
Chittagong for Bank Asia”. The purpose of the survey is to know the
prospect and problems related to student loan.
Your participation in this survey is really appreciated and will help me to
conduct the survey successfully. It is assured that the information you will
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provide will be strictly confidential and used for educational purpose only.
Thank you for your time and cooperation.
Sincerely
K.M. Abeduzzaman Masum
Please choose your best option among the choices
1. Have you ever heard about any student loan scheme offered by any bank?
a. Yes b. No
2. Are you willing to take loan for your study purpose?
a. Yes b. No
If the answer is no then please don’t proceed further.
3. What is your occupation?
a. Student.
b. Service holder.
(If your answer is a then answer question no.4 & if your answer is b
then answer question no.5)
4. (i) what is the occupation of your parents?
a) Service holder
b) Business man
(ii) What is the monthly income range of your parents?
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a. 10,000-20,000.
b. 20,000-30,000.
c. 30,000-40,000
d. 40,000-50,000
e. 50,000 and above
5. What is your monthly income range?
a. 10, 000-20,000.
a. 20,000 - 30,000.
b. 30,000 - 40,000
c. 40,000 - 50,000
d. 50,000 and above
6. What is your likely purpose to take student loan?
a. To meet up the expenses of university in home country
b. To meet up the expenses of university abroad.
7. What interest rate do you think is suitable for you?
a. 5% - 8%
b. 9% - 12%
c. 13% - 16%
d. 17% - 20%
8. Do you want any additional period apart from the study period to repay
the loan?
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a. Yes b. No
(If your answer is b then do not answer question no.9?)
9. How long additional period you think is adequate for you to repay the
loan?
a. 6 months
b. 1 year
c. 1.5 years
d. 2 years
10. Are you willing to pay additional interest on the loan if you fail to pay
within time?
a. Yes b. No
11. What would be your source of security for the loan?
a. Physical assets (Land, business firm etc.)
b. Financial assets (SDPS, Bonds, Insurance policy etc.)
c. Guarantor A/C.
d. Others. (Please specify)......................................................
12. How do you rate the student loan?
a. Highly important
b. Important
c. Less important
d. Unnecessary
Thank you for your Co-operation.
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Questionnaire for bank personnel
I am a student of Independent University and currently enrolled for my
Internship program in Bank Asia Ltd. I am conducting this survey to
prepare my Internship report on “Feasibility Study of Student loan in
Chittagong For Bank Asia. ”. The purpose of the survey is to know the
prospect and problems related to student loan.
Your participation in this survey is really appreciated and will help me to
conduct the survey successfully. It is assured that the information you will
provide will be strictly confidential and used for educational purpose only.
Thank you for your time and cooperation.
Sincerely
K.M. Abeduzzaman Masum
Please choose your best option among the choices
1. What is the existing interest rate for the student loan scheme of your
bank?
---------------------------------------------------------------------
2. What factors you put emphasis on while issuing the loan?
----------------------------------------------------------------------
3. What are the likely problems associated with student loan?
31
---------------------------------------------------------------------
4 What type of security you look for to issue loan?
................................................................................................
5. What type of student would you prefer to lend fund?
a. Student willing to study in Private university
b. Students willing to study abroad.
c. Professional students
6. What is the current recovery rate of the student loan scheme of your
bank?
--------------------------------------------------------------------------------
7. How do you deal with default in loan repayment?
......................................................................................
8. What percentage of the total profit is contributed by student loan?
................................................................................................
9. What type of parents do you like to finance?
a) Service holder
b) Business man
10. Do you think the existing student loan schemes are adequate for
32
supporting the students?
a. Yes b. No
11. How do you evaluate the future prospect of student loan for the banks?
a. Very bright
b. Bright
c. Mediocre
d. Uncertain
e. Completely uncertain
Thank you for your Co-operation.
Awareness regarding Student Loan:
33
0%
50%
100%
Aware Unaware
Percentage
Percentage
Willingness of students to take student loan:
Percentage
Willing
Unwilling
34
Relationship between income level and customers expected interest
rate:
0%10%20%30%40%50%60%70%
5000
0+
4100
0-50
000
3100
0-40
000
2100
0-30
000
1000
0-20
000
Interest rate5% - 8%
Interest rate9% - 12%
Interest rate13% - 16%
Interest rate17% - 20%
Relationship between income and types of security:
35
00.10.20.30.40.50.6
Inco
me
5000
0+
4100
0-50
000
3100
0-40
000
2100
0-30
000
1000
0-20
000
Physical Asset
FinancialAsset
Guarantor’sA/C
IncomeStatement/Pay Slip
Customers expectation regarding the security of the loan:
0.00%
50.00%
100.00%
Percentage
Percentage 27.50% 72.50%
Secured Unsecured
Recovery rate of student loan of the banks:
36
96% 97% 98% 99% 100%
HSBC
SCB
EBL
Average recoveryrate
Recovery rate
Portion of the profit of banks contributed by student loan:
0
0.01
0.02
0.03
0.04
0.05
Bank HSBC SCB EBL
Contribution toprofit
Averagecontribution toprofit
37
Appendix B References:
www.gmi.org/research/websites.htm
www.marketresearch.com
www.speedresearch.com
www.spss.com
www.allbusiness.com
www.bankasia.com
38
www.consumerdemand.re.ualberta.ca/
Journals of year 2003-06 of Bank Asia.
39
40