sme banking of nccbl
TRANSCRIPT
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CHAPTER-1
BRIEFING OF THE STUDY
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1.1 Introduction to SME:
Small and medium enterprises (SMEs) are the spirit of national economy for any
developing country. So development of SMEs is an important component of overall
economic policy of a developing country. Moreover, Least Developing Countries
(LDCs) in the East have started refocusing their role in bringing about structural
change in their economics. As a developing country, Bangladesh has paid much
attention to rapid industrialization through development of SMEs. This report
attempts to evaluate the present scenario of SMEs in Bangladesh and in this regard
we will consider SME financing by NCC Bank Ltd. In Bangladesh SMEs provide over
87% of total industrial employment and are contributing toward the creation of over
33% of industrial value added good. Based on new definition of SMEs, which
includes industries with investments up to Tk. 5 million, around 95% of the existing
industries in Bangladesh can be classified as SMEs. SMEs are predominantly
important for export trade and as well as for the domestic market of our country. It is
contributing significantly toward the growth of national economy through supporting
industrialization process, revenue generation, poverty reduction, employment
creation, output and value addition. For this, the government of Bangladesh has
undertaken aggressive steps for providing all possible assistance and co-operation
to business community for development of SMEs.
In past bank had avoided SME financing for risk, cost considerations and large
banks lacked in aptitude and expertise to finance SMEs. So bankers in Bangladesh
traditionally used to asset based lending, were hesitant to make loans to SMEs.
Development and growth of Small and Medium Enterprises is vital for national
development. Such type of beneficial enterprising borrower cannot go a long way for
want of financial support because they have no access to institutional credit facilities,
as they cannot provide collateral security as demanded for such credit facility. But
today all banks are committed to support SMEs for overall socioeconomic
development of the country.
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1.2 Objective of the Study:
The objective of my study can be divided into two segments. These are given below:
Primary Objective: The primary objective of this report is to meet the requirements of the Research
Project, MBA Program.
Secondary Objective: The secondary objectives are: To find out the importance of providing loans and advances to the small and
medium enterprises.
Entrepreneurship development situation through SME banking
Importance of SME banking in context of Bangladesh
To be familiar with SME loan procedures
To understand the terms and conditions of SME loan
To study the SME loan products.
To earn knowledge regarding repayment system of SME loan.
To understand the credit risk grading system of NCC Bank Limited
To suggest some recommendations for development of SME loan products
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1.3 Methodology of the study:
The present study is based on empirical as well as theoretical analysis. Collected
data and information were processed and analyzed critically in order to make the
report informative. The sources of primary and secondary data may be shown as
under.
Population:
All the SME borrowers of NCC Bank Ltd located in Chittagong will be considered as
population.
Data collection:
Sources of data of this report are divided into two categories:
1) Primary Sources:
Practical Deskwork.
Opinion Survey.
Interview of the personnel.
Face to face contact with the officials.
Face to face conversation with the client.
2) Secondary Sources:
Manuals of NCCBL.
Different publications on banks.
Annual Report of the bank.
Past research books & journals.
Documents of Loans and advance department.
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1.4 Scope of the study:
This study mainly concern about SME banking of NCC Bank Ltd, Agrabad Branch,
Chittagong. The report covers the SME functions performed by the Credit Division,
rules and regulations related to SME Credit, procedure of Sanctioning SME Credit,
credit grading system of NCCBL, Monitoring, and various analyses related to this
particular arena etc. It focuses on different product and services provided to the
borrower, different procedure associated with it, different problems associated with
SMEs etc. The study also covers the overall performance of the bank comparing to
previous years.
1.5 Limitation of the study:
To make a report various aspects and experience are needed. But I have faced
some barriers for making a complete and perfect report. These barriers or limitations,
which hinder my word, are as follows:
Time limitation is the main barrier for this study.
Lacking of proper assistance, due to working pressure of the officers.
Lack of my experience in data collection.
Client and customer are also busy and not always helpful.
Inadequacy and lack of availability of required current data.
Changing environment from the educational area to the professional area.
My personal limitations also contributed greatly in making the study.
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Chapter-2
Company Profile
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2.1 Profile of National Credit and Commerce Bank Ltd:
National Credit and Commerce Bank Ltd. is one of the established and faster
growing bank in Bangladesh. Its ongoing financial liberalization program, make it as
a fast growing leading and prominent bank in the private sector to operate on the
commercial arena of Bangladesh. The bank has been sponsored by a group of
renowned personalities from the field of trade, commerce and industries including
some eminent entrepreneur. Highly skilled professionals having wide experience in
domestic and international banking manage the bank. The NCC Bank Ltd has
already occupied a challenging position among its competitors after achieving
success in all areas of banking operation. It offers all kind of commercial, corporate
and personal banking services covering almost all segments of the society. To serve
the customers through capacity building across multi delivery channel is one of the
main strategies of the NCCBL. The bank is gradually expanding branch for coming
nearer to its customers for providing various convenient services. Thus, in the local
market the operation of the NCCBL is highly appreciated for its customer oriented
focus,
2.2 Historical Background:
NCC Bank is one of the well known Banks among all Private commercial Banks
(PCBs) in Bangladesh. Before 1993 NCC Bank was not scheduled commercial bank.
It was incorporated as a Public limited investment company on 18th November 1985,
named National Credit Ltd (NCL). In 25th November 1985) it started its operation on
its registered office & first Branch at 7- 8, Matijheel Commercial Area, Dhaka-1000.
The initial authorized capital of the company was 30 crore consisting of 30 Lac of
ordinary shares of Tk. 100 each. In 17th May, 1993, NCL was emerged as a Bank
and renamed as NCC Bank Ltd (National Credit and Commerce Bank Ltd). The
initial authorized capital of the Bank was Tk. 750 million and paid-up capital Tk. 390
million. At the end of first year of Banking Operation in 1993, total deposit was 1.650
million, advance was 1.050 million. The comprised the first Board of Directors. Over
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the years, the bank has been expanding its service coverage through introduction of
new branches at different strategically important areas of the Country. It is
sponsored by a number of entrepreneurs representing various business groups with
exposure in Garments) Textile, Steel & Engineering, Financial, Insurance,
Electronics, and Cement and Construction Sectors. Mr. Yakub Ali is the present
Chairman of the bank. The bank went for lPO on December 1999 and raised Tk.
195.00 million from the offer. The NCCBL got enlisted with Chittagong Stock
Exchange on May 16th 2000 and with Dhaka Stock Exchange on May 28th 2000.
The authorized of capital of bank is Tk. 500.00 Crore and paid up capital is Tk.
228.49 Crore on August 31, 2009. NCCBL is the member ―Investment Promotion
and Financing Facility (IPFF)‖ launched by the World Bank enable in Co-financing
private infrastructure development companies and ―Foreign Remittance Payment
Project (FRPP)‖, co-funded by DFID, UK to dispense foreign remittance in every
corner of the country. The Bank has a network of 74 branches&1592 employees as
on August 31, 2010.
2.3 Total Equity of the Bank: (As at June 30, 2010)
Shareholder’s Equity June 30,2010 December 31, 2009
Paid up capital 4,501,253,300 2 ,284,900,200
Statutory reserve revaluation 2,198,785,974 1 ,893,817,316
General reserve 67,162,348 67,162,348
Other reserve 679,959,752 668,191,610
Surplus in profit and loss account 807,475,702 1 ,120,377,433
Total Shareholder’s Equity 8,254,637,076 6 ,034,448,907
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2.4 Mission of NCCBL:
Anticipating business solutions required by all customers everywhere and
innovatively supplying them beyond expectation.
Setting industry benchmarks of world class standard in delivering customer
value through our comprehensive product range, customer service and all our
activities.
Building an exciting team-based working environment that will attract, develop
and retain employees of exceptional ability who help celebrate the success of
our business, of our customers and of national development.
Maintaining the highest ethical standards and a community responsibility
worthy of a leading corporate citizen
Continuously improving productivity and profitability, and thereby enhancing
shareholder value.
2.5 Vision of NCCBL:
To be in the forefront of national development by providing all the customers
inspirational strength, dependable support and the most comprehensive range of
business solutions, through our team of professionals who work passionately to be
outstanding in everything we do.
2.6 Objectives & Goal of NCCBL:
To share a significant portion of the banking sector by utilizing available
manpower and state of the art technology for maximizing the shareholders
wealth.
To maximize shareholders wealth.
To earn satisfactory rate of return on investment by providing wide range of
banking services.
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2.7 Organization structure of NCCBL:
Managing Director (MD)
Deputy Managing Director (DMD)
Senior Executive Vice President (SEVP)
Executive Vice President (EVP)
Senior Vice President (SVP)
Vice President (VP)
Senior Assistant Vice President (SAVP)
Assistant Vice President (AVP)
Senior Principal Officer (SPO)
Principal Officer (PO)
Senior Officer (SO)
Officer (G-1)
Junior Officer (JO)
Assistant Officer (AO)
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2.8 Organizational structure of Agrabad Branch:
Executive Vice President (EVP)
Senior Assistant Vice President (SAVP)
Assistant Vice President (AVP)
Senior Principal Officer (SPO)
Principal Officer (Po)
Officer (G-1)
Junior Officer (JO)
Assistant Officer (AO)
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2.9 Departments of Agrabad Branch:
General Banking
Cash
Ledger & Deposit
Accounts
Loan and Advance
Clearing
Remittance
Fixed Deposit Receipt (FDR)
Foreign Exchange
Departments of Agrabad Branch
Accounts
Opening
Export
Import
Foreign Remittance
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2.10 Products & Services offered by NCCBL:
Deposit Products:
Fixed Deposit Receipt
Foreign Currency Deposit
Instant Earning Term Deposit
Money Double Scheme
Premium Term Deposit
Special Deposit Scheme
Special Saving Scheme
Wage Earners Welfare DPS
Loans & Advances: Agro Based Loan:
Agro-Credit
Agro-Industries Corporate Service:
Project Finance
Short& Long Term Loan
Syndicate Loans
Trade Finance
Transport Loan
Working Capital Loan Housing Loan:
House Building Loan
House Renovation Loan SME:
Consumer Finance
Festival Business Loan
Festival Personal Loan
Lease Financing
Personal Loan
Small Business Loan
Remittance:
Foreign Remittance
Inland/Local Remittance
Card Service:
ATM Service
Credit Cards Local
Credit Card International
Others:
Bonds & Guarantees
Consultancy
Issuance of TO (Foreign Currency)
Locker Facilities
On Loan Banking
Utility Service (Payment of Bills)
Brokerage House:
Consultancy
Credit Facility under Margin Rules
Trading
Specially:
IPFF Member Bangladesh Bank Service
Primary Dealer for Treasury Bonds/Bills
International Trade Service:
Export L/C V lmport L/C
Pre & Post Shipment Finance
Subsidiary: Equally Participation in Venture Investment Proteins CTD Bangladesh (VIPB).
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2.11 Financial Highlights of NCC Bank Ltd.
2.11.1 Balance Sheet
PROPERTY AND ASSETS
At June
30,2010
Taka
At December
31, 2009
Taka
Cash
In hand (including foreign currencies)
Balance with Bangladesh Bank and its agent bank
(s) (including foreign currencies)
Balances with other Banks and Financial Institutions
In Bangladesh
Outside Bangladesh
Money at call and short notice
Investments
Government
Others
Loans and advances
Loans, cash credits, overdraft, etc.
Bills purchased & discounted
Fixed assets including premises, furniture and fixtures
Other assets
Non-banking assets
553,742,945
5,320,538,275
447,864,005
3 ,201,373,908
1,241,423,364 623,905,934
1,108,465,565
132,957,799
--
12,297,655,404
11,785,773,713
511,881,691
56,125,592,614
53,623,522,459
2,502,070,155
956,336,016
1,240,335,776
--
445,746,061
178,159,873
--
9 ,671,530,054
9 ,188,182,140
483,347,914
50,387,683,203
48,530,225,335
1 ,857,457,868
849,103,581
756,030,778
--
Total Assets 77,735,624,394 65,937,491,463
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LIABILITIES AND CAPITAL
At June
30,2010
Taka
At December
31, 2009
Taka
Liabilities
Borrowings from other Banks, Financial Institutions
and agents
Deposits and other accounts:
1,995,293,182
63,476,084,912
1 ,822,696,932
53,900,150,635
Current deposits and other accounts
Bills payable
Savings Bank Deposit
Fixed Deposit
Term Deposit
Bearer Certificate of Deposit
6,008,940,500
2,109,313,868
6,581,137,241
35,461,459,462
13,315,233,841
--
5 ,390,299,730
685,406,946
6 ,134,648,381
32,267,274,574
9 ,422,521,004
--
Other liabilities 4,009,609,224 4 ,180,194,989
Total Liabilities 69,480,987,318 59,903,042,556
Shareholders’ Equity Share capital
Paid up capital
Statutory Reserve
General reserve
Other reserve
Surplus in profit and loss account
4,501,253,300
2,198,785,974
67,162,348
679,959,752
807,475,702
2 ,284,900,200
1 ,893,817,316
67,162,348
668,191,610
1 ,120,377,433
Total Shareholders’ Equity 8,254,637,076 6 ,034,448,907
Total Liabilities and Shareholders’ Equity 77,735,624,394 65,937,491,463
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CONTRA ENTRIES
At June 30,
2010
Taka
At December
31, 2009
Taka
Off balance sheet items:
Contingent liabilities
Acceptance and endorsements
Letter of guarantee
Irrevocable Letter of credit
Bills for collection
Other contingent liabilities:
Claims against the bank not acknowledged as debt
Capital Commitments
Export Development Fund (EDF)
Total Off Balance Sheet Items
5 ,296,674,684
4 ,936,623,000
5 ,353,061,185
10,089,274
--
--
--
3 ,596,232,028
4 ,132,262,543
3 ,460,600,081
3,708,113
--
--
--
15,596,448,143 11,192,802,765
2.11.2 Graphical view of profit position of NCC Bank Ltd.
1045.552961
890.412657
685.003526
489.532021
366.339315
0
200
400
600
800
1000
1200
2009 2008 2007 2006 2005
Millio
ns
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2.11.3 Comparative Financial Highlights (between 2009-2008) Of NCCBL:
Si.
No Particulars
At August 3l,
2009(BDT)
At Dec, 31,
2008(BDT)
1. Paid up capital 2,284900,200 1757,615,600
2. Total Capital 5,794,408,347 4,440,255,205
3. Capital Surplus/Deficit 1,347071,347 255385,205
4. Total Assets 64,147269,693 57,365,523,726
5. Total Deposits 51,888,193,858 46,904,663162
6. Total Loans and advances 47,793,768,267 46,332,688,464
7. Total Contingent Liabilities 10,813377,301 10,940,927,647
8. Credit deposit ratio 0.92:01 0.98:01
9. Percentage of classified loan against
total Loans and advances
4.39% 4.14%
10. Profit after tax & provision 1,040,216,691 882,277833
11. Amount of classified loan during current
year
2055,918,000 1,902,927,647
12. Provision kept against classified loans 1025,628838 91 2904000
13. Provision Surplus/Deficit -- --
14. Cost of fund (%) 11.60% 11.64%
15. Interest earning Assets 57,550638,822 53,077,596228
16. Non-interest earning Assets 6,596,630,871 4,287,927,498
17. Return on Investment (ROl) 6.76% 9.77%
18. Return on Assets(ROA) 1.62% 1.54%
19. Income from Investment 588,259,885 638,069,608
20. Earnings per share (Tk.) 45.53 50.20
21. Net income per share (Tk.) 45.53 50.20
22. Price Earnings Ratio (Tk.) 7.80 7.29
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2.12 Philosophy of NCC Bank Ltd.
At present, the bank has as many as 64 branches across the country and it is
committed to become equal service providers compatible with the norms of
commercial schedule bank. It renders all types of personal, commercial and
corporate banking services to its customers within the purview of the Bank
Companies Act, 1991 and in line with the directives and policy guidelines laid by
down, by Bangladesh bank,
2.13 SWOT Analysis of NCC Bank Ltd.:
SWOT stands for Strength, Weakness, Opportunity and Threat, The SWOT of
NCCBL has been shown below:
Internal factors
Strengths Weaknesses
Existence of strict and standard credit management.
Harmonious lender (bank) borrower (Client) relationship.
Experienced manpower in advance/loan department.
Decreasing trend of classified loan. Existence of some new & attractive
credit scheme.
Lack of trained and highly educated
officers.
Lack of modern equipment.
Lack of proper office space.
Absence of Islamic Banking System.
Lack of proper advertisement of the
products and services of advance.
External factors
Opportunities Threats
Can introduce more new and
attractive credit scheme.
Can set a competitive interest rate.
Can recruit young, energetic and
talented officers,
Can take initiative for introducing
Islamic Banking system.
Govt. policies are not in favor of the private banks.
Competitors done the credit services to customers more effectively.
Competitors offer low interest rate on loan.
Entrance of highly equipped and modern banks & intense competition in the credit market.
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CHAPTER-3
OVERVIEW OF SME
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Overview of Small and Medium Business enterprises (SMEs)
3.1 Concept of SMEs:
The Small and Medium Enterprises worldwide are recognized as engines of
economic growth. In recent days the Small and Medium Enterprise (SME)
Financing has become an important area for Commercial Banks in Bangladesh.
To align its corporate policy with the regulation of Central Bank, banks have
become more concerned about SME and opened windows to conduct business in
this particular area. As per Industrial Policy-2005, Small and Medium enterprises
are categorized as follows:
(a) Manufacturing enterprise
Small enterprise: An enterprise should be treated as small if, in current
market prices, the replacement cost of plant, machinery and other parts,
fixtures, support utility and associated technical services by way of
capitalized costs (of turn-key consultancy services, for example), etc.
excluding land and building were to be up to TK 1.5 crore.
Medium enterprise: An enterprise would be treated as medium if, in
current market prices, the replacement cost of plant, machinery and other
parts, fixtures, support utility and associated technical services by way of
capitalized costs (of turn-key consultancy services, for example), etc.
excluding land and building were to be up to TK 10 crore.
(b) Non- Manufacturing enterprise
Small enterprise: An enterprise should be treated as small if, it has less
than 25 workers.
Medium enterprise: An enterprise would be treated as medium if; it has
between 25 and 100 workers.
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Bangladesh Bank defines SME as:
Nature of
enterprise Nature of Loan Total Assets (at cost)
And/or total
number of
employees
Small
enterprise
Service concern Tk.50,000 to 50 Lac
(excluding land & building)
Not more than
persons 25
Trading concern Tk.50,000 to 50 Lac
(excluding land & building)
Not more than
persons 25
Manufacturing
concern
Tk.50,000 to 1.5 Crore
(excluding land & building)
Not more than
persons 50
Medium
enterprise
Service concern Tk.50,000 to 10 Crore
(excluding land & building)
Not more than
persons 50
Trading concern Tk.50,000 to 10 Crore
(excluding land & building)
Not more than
persons 50
Manufacturing
concern
Tk.50,000 to 20 crore
(excluding land & building)
Not more than
persons 150
3.2 Booster Sectors (Proposed Industrial Policy-2005):
Specialized Textiles (including
Garments).
Backward Linkage (Garments).
Hand-driven welding.
Basic Metal engineering.
Small Fabrication units.
Paper, Printing & Publishing.
Handicraft, Electronics.
Small scale Chemical industry,
Poultry farming.
Rubber, Battery and Silk.
Food/fruit processing and food
allied, Fisheries.
Leather, Ceramic.
Light engineering, etc.
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3.3. SME Financing by Banks in Bangladesh:
The National Commercial Banks (NCBs) are disbursing significant amount of credit
under various programs like Small Enterprise Development Project, Self-help Credit
Program, and Projects for Small Entrepreneurs, Special Investment Program and
Agro-based Supervisory Industrial Credit etc. for the promotion and development of
SMEs. The investment of private sector banks in financing SMEs remains
insignificant in Bangladesh. Of all the private sector banks, BRAC Bank, AB Bank
Limited. (ABBL) Eastern Bank Ltd. (EBL), Prime Bank Ltd, Dhaka Bank Ltd,
Mercantile Bank Ltd, Dutch-Bangla Bank Ltd, Islami Bank Bangladesh Ltd, IFIC
Bank Ltd. National Credit and Commerce Bank Ltd. (NCCBL) have the leading role
in SME financing. Bank of Small Industries and Commerce Bangladesh Ltd. (BASIC)
are entrusted with the responsibility of providing medium and long-term loans for
promotion and development of small-scale industries. The memorandum and Articles
of Association of the bank stipulates that 50% of loan able funds shall be used for
financing small scale and cottage industries.
3.4 What makes SMEs sustainable?
There are some factors that make SMEs sustainable, that‘s are –
Flexible and Credible policy environment.
Political and economic stability.
Cost-efficient labor.
Availability of raw material and technological knowhow.
Good infrastructure.
Investment incentives.
And last but not least, positive social attitude toward entrepreneurship.
3.5 Problems encountered by SMEs:
There are some problems which reducing the growth of SMEs. The problems to
expending credit facilities can be described from two points of view.
1) From demand side constraints i.e. from borrowers point of view.
2) From supply side constraints i.e. from the bankers point of view.
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3.5.1 Demand side constraints of SME financing (from borrowers point of view)
a) Collateral:
The kind of collateral such as land and building that many SME entrepreneurs
cannot because they work from rented property.
Banks considered land owned within the municipal area as collateral security.
Banks undervalued the collateral resented. Sometimes it is assessed to 50%
or less for banking purpose.
Insurance of collateral security from borrowers end.
b) Procedural complexities and delays:
Potential borrowers are rarely given written guidelines clarifying the eligibility
and terms and conditions for different loans scheme.
Documents are huge.
Documentation is time consuming process.
Standardized banking norms and procedures are usually applied strictly.
Low literacy level of many entrepreneurs makes the understanding of the
forms and procedures more difficult.
Banking language is often difficult for the laymen to group.
Most banks require a guarantor for sanctioning the loan.
c) Bribes:
Many bankers delay the loan application in order to frustrate the applicant and
ultimately providing bribes to facilitate the process.
Bankers can be bribed to overlook a number of procedural difficulties (land
documents are not actually in the borrower‘s name, guarantors and over
valuation of collateral).
The key to minimizing the opportunities for bribery to supply bankers and
consumers with clear information on the documents required, the processing
stage and the maximum time required for each step.
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3.5.2 Supply side constraints of SME financing (from the bankers point of view):
Lack of knowledge I information about the profitability of purpose of SME
borrowers.
High risk involved in SME project due to lack of data.
High administration cost.
Lack of prior business relation of SME borrowers with financial institutions.
High level of default in commercial banks.
Slow and costly judicial recovery process.
Shortage of manpower and logistics.
Lack of bankable clients.
Monitoring and supervision problem.
3.6 Suggestions for facilitating the growth of SMEs:
To overcome the barriers following steps should be taken:
Suitable policy incentives.
Financial services.
Marketing services.
Creation of Entrepreneurship Development Institution (EDI).
Role of Information Technology (IT) sectors.
Providing incubator treatment initially.
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CHAPTER- 4
SME BANKING OF NCCBL
26
SME Banking of National Credit and Commerce Bank Ltd.
4.1 Objective of SME financing scheme:
To provide credit facilities to Small and Medium size entrepreneurs located in urban and sub-urban areas which are easily accessible.
To flow credit for creation of employment and generation of income on a substantial basis through development of SMEs.
To give assistance to potential entrepreneurs to take part in economic activities.
Reduce dependence on moneylenders. To make Small and Medium enterprises self-reliant.
4.2 What NCC Bank Ltd. Considers as Small and Medium enterprise?
Small and Medium enterprise refers to those enterprises (other than Public Ltd.
Company) as per the guideline of Bangladesh Bank:
a) Where goods are produced, recycled, repaired or traded and rending service
in traditional way.
b) Small enterprise:
Nature of enterprise Total Assets at cost
excluding land and
building
Total number of
employees
Service concern Tk 50,000-to TK 30.00 Lac Less than 30 persons
Trading concern Tk 50,000-to TK 50.00 Lac Less than 20 persons
Manufacturing
concern
Tk 50,000-to TK 1.00
Crore
Less than 60 persons
c) Medium enterprise:
Nature of
enterprise
Total Assets at cost excluding land
and building
Total number of
employees
Service concern Above TK 30.00 Lac to TK 1.00 Crore Less than 50 persons
Trading concern Above TK 50.00 Lac to TK 2.00 Crore Less than 50 persons
Manufacturing
concern
Above TK 1.00 Crore to TK 5.00 Crore Less than 100
persons
For NCC banks purpose Private Ltd Company shall also be excluded for financing
under SME scheme.
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4.3 SME Products of National Credit and Commerce Bank Ltd.
SME
products
Purpose of loan Loan ceiling Period of
loan
Interest
charge
SBLS For small retail/wholesale
shops
Up to Tk. 5 lac 5-Years 17%
HRRLS For repairing, decoration,
painting etc.
Up to Tk. 5 lac 10-Years 17%
PLS This is sanctioned for personal
purpose not for business use &
the individual must have a
permanent job.
Up to Tk. 1 lac At least 6
month but
not more
than 3
years.
17%
FSBLS This is sanctioned for particular
festival (Eid, Fair, Puja etc.)
purpose& for business use.
Up to Tk. 5 lac 1-Years 17%
FPLS This is sanctioned for particular
festival (Eid, Fair, Puja etc.)
purpose& for personal use.
Up to Tk. 5 lac 1-Years 17%
CFS The Scheme aims at improving
the standard of living of the
fixed income group. Under the
scheme the clients may secure
loan facilities at easy
installments to procure
household amenities. It meets
household needs of service
holders: Furniture/ TV/
Refrigeration & others
household durables
Up to Tk. 1 lac 2-Years 17%
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4.4 Eligible criteria for SME loans:
I. The borrower shall maintain a savings/current/STD account with NCC Bank
Ltd.
II. The entrepreneurs must be literate i.e. capable of reading and writing.
III. The entrepreneurs should be skilled in managing his/her business.
IV. If the applicant is an individual, the borrower must be a permanent resident of
Bangladesh. If the borrower is a firm or other business entity it must be in
Bangladesh.
V. The entity of applicant must be 100% privately owned, controlled and
operated.
VI. If acceptable collateral security cannot be provided, the borrower should
arrange for two guarantors acceptable to the bank. The type of guarantors
depends on size of the loan and business. In accepting a person as guarantor
his social standard, income and asset shall be considered. Any default loaner
or unreliable person shall not be acceptable as guarantor.
VII. The project shall be financially viable and socially desirable.
VIII. The person shall have reputation in society.
IX. The innovative projects, manufacturing enterprise shall get preference.
X. Proper utilization and timely repayment of previous loan will be considered as
proven track record of the applicant for renewal & enhancement of credit
facility.
4.5 Documents required for SME loan:
For execution of any loan, bank usually used two types of documents. One is
application from and other one is charge document. Details of these documents are
given below.
29
Application form: The contents of application form for loan of different banks are
almost the same and these are as follows:
Personal Details of Application(s): Applicant‘s personal information is
written down here.
Loan Details: Amount of loan, period, interest, equity, mode of repayment,
security and other charges are to be mentioned.
Financial Details: Total assets, total liabilities, monthly income, monthly
expenses and all other financial details of the applicant have to be mentioned
Particulars of Guarantors: Details of Guarantors with their job details are
stated here.
Quotation: Quotation contains the details descriptions of the goods, brand,
model, size, manufacturer, price and details of supplier.
Letter of Assurance: This is the assurance of the working organization of the
client to pay the installment on behalf of the client in case of the client fails to
repay.
Declaration: This the declaration of the borrower that all the information
regarding the quotations o goods is correct and he agrees with all terms and
conditions of the bank
Certification of the organization: in this section the working organization will
certify that the borrower is the employee of the organization.
Photograph: Two copies of photograph are required for each client.
Charge documents: Charge documents are set for documents that contain different
rules, terms and conditions. If the, borrower of loan agrees with all these terms and
conditions regarding the loan he needs to sign all the documents. If any
disagreements or irregularity occurs in the future, these documents will be exercised
to suit against the borrower. Before the disbursement of loan, the following
documents must be signed by clients. The stamps needed for these documents are
paid by the clients.
30
Letter of Guarantee: This letter of guarantee is two sided. One is borrower
side guarantee and another one is guarantor side guarantee. Borrower side
guarantee consists of agreement of all terms and conditions of bank as well
as assurance of proper repayment of installment. Guarantor side guarantee is
the undertaking by the guarantor to pay the installments in case of failure of
the client.
Letter of Hypothecation: It signifies that the goods items are hypothecated
to the bank.
Demand promissory note: It is the promise of borrower to pay on demand to
the bank the overdue or total outstanding if necessary.
Letter of installment: In this document borrower promises to pay all regular
and irregular installments in the due time.
Letter of disbursement: This is the agreement that the borrower is bound to
pay all dues together with all other charges and the borrower gives the bank
the authority to discharges the agreements any time due to the fault in
borrower side
Letter of authority: Through this the borrower gives the bank the authority to
debit the account if necessary.
4.6 Mode and period of finance under SME scheme:
a) Cash credit (H) for maximum one year period.
b) Lease finance for used! reconditioned machinery/vehicle maximum three
years and for new maximum five years.
c) Term loan for business maximum five years.
4.7 Loan Ceiling:
For SME working capital Nature of enterprise Borrower exposure(for
all items)
For Lease financing Small enterprise Minimum Tk. 2.00 Lac &
maximum Tk. 20.00 Lac
For SME term loan Medium enterprise Above Tk. 20.00 Lac &
maximum Tk. 50.00 Lac
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4.8 Procedure for application:
The following papers will have to be submitted by the prospective borrower while
applying for loan under SME:
a) Application in prescribed form duly filled in and signed by the applicant.
b) Two passport size photographs duly attested by an officer of the branch.
c) Recommendation by the head of Local Chamber of Commerce and Industry
or related Business Association or Society or Malik Samity/ similar body
(Where applicable)
4.9 Interest and other charges:
I. For working capital (cash credit, Hypothecation, pledged):
a) Interest @ 16% at quarterly rest subject to change from time to time.
b) Penal interest @ 2% to be charged on overdue amount.
II. For lease financing:
a) Interest @ 16% at quarterly rest subject to change from time to time.
b) Supervision and monitoring charge 1% per annum.
c) Project examination fees minimum Tk.2,500/- to Tk. 10,000/- to be realized.
d) Risk fund @ 1% on acquisition cost to be realized before disbursement of
loan.
e) Disposal of the lease item @ 1% on acquisition.
III. For term loan (Business):
a) Application fees Tk. 500/-
b) Interest @ 16% at quarterly rest subject to change from time to time.
c) Penal interest @ 1% per month will be charged on default amount (minimum
Tk.100/).
d) Service/Processing charge @ I % of the amount of loan sanctioned to be
recovered at the time of disbursement.
e) Risk fund @ 1%, minimum Tk. 500/-, shall be realized once at the time of
disbursement.
32
4.10 Securities taken for SME Loan:
a) For cash credit & lease finance registered mortgage of land & building as
collateral is required.
b) For business term loan more than Tk. 5.OOLac, registered mortgage of land
& building as collateral is required.
c) Mortgage/Assignment of possession right.
d) Assignment of security money, advance rent if any.
e) Assignment of trade receivables not older than 90 days.
f) Hypothecation of machineries, vehicles, stock in trade raw materials, works in
process and finished goods.
g) Personal guarantee from persons acceptable to the bank.
h) Post date checks.
i) Lien on deposit/saving certificate/financial obligations.
j) Any other securities to be deemed suitable by the bank depending on the
situation like insurance guarantee, corporate guarantee, assignment of
contract, security money etc.
4.11 Restricted Business:
Manufacturing, distribution or servicing alcoholic beverages.
Un-manufactured tobacco, tobacco reuse, manufactured tobacco (whether or
not containing tobacco substitutes), and tobacco processing machinery.
Radioactive and associate materials, nuclear reactors & parts thereof, non-
irradiated for nuclear reactors and fuel elements (cartridges).
Goods intended for a military or paramilitary purpose, environmentally
hazardous goods, and personal or consumer loans including house-building
loans.
Crop and fish production.
Production and trading of any item banned by government or any activity not
permissible by the law of the land.
33
4.12 Process of loan sanction followed by NCCBL:
Step-I: Loan interviewing! Selection of borrower.
Step-2: Loan application submitted by borrower.
Step-3: Collecting & correlating the information about the borrower.
Step-4: Preparation of credit report.
Step-5: Manger‘s decision about the suitability of proposed loan/advance.
Step-6: Assessment.
Step-7: Recommendations.
Step-8: Sanction.
Step-9: Sanction advice, other terms &conditions.
Step-10: Repayment & repayment schedules.
Step-11: Settlement of Interest rate, etc.
4.13 Disbursement of loan:
I. Branch manager will disburse the loan after sanction and completion of all
formalities and documentation will be as per sanction letter of Head Office.
II. The following documents must be obtained as per sanction letter before
disbursement of the loan.
A. For working capital (CC, HY, PI):
a) D.P note.
b) Letter of continuity.
c) Letter of arrangement.
d) Letter of disbursement.
e) Registered mortgage and registered irrevocable general power of attorney as
per Artha-Rin Adalat act-2003.
f) Letter of guarantee.
g) Letter of hypothecation of goods/pledge letter.
h) Letter of authority to debit the account with incident and other bank charge.
34
i) Letter of acceptance of the terms and conditions of the loan.
j) Hypothecated stock should be insured against, fire, flood and cyclone cover in
joint names of the bank and the borrower covering full value of stock plus
10%.
B. For lease financing:
a) D.P note.
b) Letter of continuity.
c) Ownership of the vehicle/original purchase receipt in favor of the bank.
d) Lease item(s) shall have to be duly insured under banks mortgage clauses
throughout the lease term and insurance premium to be borne by the lessee.
e) Lease arrangement& letter of acceptance of the terms and conditions of the
loan.
f) Letter of authority to debit the account with incident and other bank charges.
C. For Term loan(business):
a) D.P note.
b) Letter of arrangement.
c) Letter of disbursement.
d) Registered mortgage and registered irrevocable general power of attorney as
per Artha-Rin Adalat act-2003.
e) Simple deposit of original Title Deed of the ownership of the shop or
possession deed/agreement or lease deed of agreement with personal
guarantee of the landlord in case of rent premises.
f) Guarantee Bond on Tk. 150/- Non-Judicial stamp as per approved format
from the guarantor acceptable to the bank.
g) Acceptance of the terms and conditions of the loan.
h) Letter of authority to debit the account with incident and other bank charge.
i) Up to date trade License.
j) Letter of Hypothecation.
k) Post dated cheques for all installments.
35
4.14 SME loan monitoring and review:
This is a supervising credit scheme. The success depends on the extensive and
intensive post disbursement supervision, follow up & monitoring.
a) Regular checking the balance of SB/CDISTD accounts of the borrower.
b) Regular communication with the defaulter customer and guarantors
physically! over telephone.
c) Issuance of letter to customer immediately after dishonor of cheque.
d) Issuance of letter to defaulter customers and respective guarantors.
e) Issuance of legal notice to the defaulter customers and guarantors prior to
classification of the loans (after three overdue installments).
f) Issuance of appreciation/greetings letter to the regular customers.
g) Periodical visit with the customer to maintain relationship and supervision of
supplied articles.
h) Legal action to be taken after failing all possible efforts to recover the bank‘s
dues.
i)
4.15 Lending Risk Analysis (LRA) of SME Loan:
Lending itself is risky and no lending is possible without risk. Any bank has to
analyze the risk so that the risk can be covered. LRA is one of the new management
and operational tools for calculation of credit risk. Bangladesh bank made it
mandatory for commercial banks to exercise it for granting loans for. It focuses on
determination of degree of risk of non-repayment by a particular loan and thus has
been helping the bank management in taking loan decisions on the basis of risk
scores.
4.15.1 Credit risk:
Credit Risk is the possibility that a borrower or Counterparty will fail to meet
obligation.
Credit risk arises from the banks dealings with or lending to the corporate,
individual and other bank or financial institutions.
To minimize losses banks should have comprehensive credit risk
management policies and procedures.
36
Credit risk can be classified into following parts:
4.15.2 Credit Risk Grading:
Based on Pre-specified scale reflecting the credit risk for an exposure.
Number! Alphabet! Symbol as Summary indicator of risk.
Credit Risk (with assigned weight)
Financial
Risk (50%)
Business/lndustry
risk (18%)
Management
risk (12%)
Security
Risk
(10%)
Relationship Risk
(10%)
Leverage
(15%)
Size of Business
(5%)
Experience
(5%)
Security
coverage
(4%)
Account Conduct
(5%)
Liquidity
(15%)
Age of Business
(3%)
Succession
(4%)
Collateral
coverage
(4%)
Utilization of limit
(2%)
Profitability
(15%)
Business outlook
(3%)
Teamwork
(3%)
Support
(2%)
Competition of
convents/conditions
(2%)
Coverage
(5%)
Industry Growth
(3%)
Personal deposits
(1%)
Market Competition
(2%)
Entry/Exit barrier
(2%)
Credit
Risk
Financial
Risk
Business/
Industry
Risk
Relationship
Risk
Management
Risk
Security
Risk
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4.16 Statement of Monthly Position of SME Loan Scheme (figure of Jun 30,
2010 Agrabad branch):
(Figure in Lac)
Nature of
Loan
Total Budget
approved
including
enhancement
Total
amount
sanctioned
Total
amount
disbursed
Total
amount
recovered
Overdue
installments
Total
present
outstanding
SBLS 200.00 300.00 300.00 240.00 13.42 60.00
HRRLS 55.00 79.00 79.00 59.50 3.63 19.50
PLS 45.00 65.60 65.60 60.15 0.15 5.45
FPLS -- -- -- -- -- --
CFS -- -- -- -- -- --
Total Tk.300.00 Tk.444.60 Tk.44.60 Tk.359.65 Tk.17.20 Tk.84.95
0
50
100
150
200
250
300
350
To. Budget
App.
To.
Disburse
Overdue
SBLS
HRRLS
PLS
38
4.16.1 Percentage of Total SME Loan recovered (Jun 30, 2010)
SBLS, 80%
HRRLS, 75%
PLS, 92%
4.17 Porter’s Forces of Model:
There is a constant threat of the emergence of new SME banking sector which can
satisfy the same SME banking needs offered by the National credit commerce Bank
Ltd. If we analyze the scenario of last 4 to 5 years we can see that trend of many
Banks coming up in SME section during this period. Some of the banks like
Mercantile Bank Ltd, Prime Bank Ltd, Export Import Bank of Bangladesh Ltd have
shown huge growth rate. On the other hand, some foreign banks like HSBC, Bank
Al-Falah, Citi Bank N.A, Commercial Bank of Ceylon, Standard Chartered started
their operations in Banglades hoping to grab a large share of this growing Market.
However as Company name has already won customers preference in the market
and have been very successful in creating great brand loyalty among its target
market through a very aggressive marketing strategy using the tools like promotion,
product innovation, and high service quality.
39
Bargaining power of the customers:
The extent of bargaining power is different for the individual customers. This is due
to the fact that the deposits of an individual customer id very insignificant compared
the total deposits thus they possess very low bargaining power. At the same time
some corporate entities have very large deposits in National credit commerce Bank
so they posses strong bargaining power in terms of deposits only and they get
special rates from the Bank. So their choice is limited and bargaining power of the
customers are not very strong.
Bargaining power of the suppliers:
Since suppliers are limited but company unlimited, so their bargaining power is high.
But, at the same time, suppliers are getting some extra benefits (Festival bonus,
opportunities) from our company. So, their Bargaining power is limited. The biggest
suppliers for a bank are the customers of the bank. They accumulate for much of the
required funding the banks need to reinvest though loans in order to earn a profit.
The customers coming to National credit commerce Bank are able to afford the high
charge rates applicable to them compared to the other commercial bank. So the
bargaining Power of suppliers, if united, is extremely high unless the bank can
understand their needs, and offer them proper value-added services for which the
customers are paying fees, the depositing customers can leave the bank, putting the
bank in a financially involvement position.
40
Threats of Substitutes:
As new banks with SME positions are coming up they are constantly trying to beat
N.C.C Bank at its own game. BRAC Bank is already considered a huger competitor
of the N.C.C Bank as they growing at a phenomenal rate. Being a commercial bank
it apparels to the customer base. Other banks like Prime Bank Ltd, DBBL are
offering competitive products which were previously offered by EBL alone. These
Banks are taking away the market share from the EBL. As the number of competition
are growing the threat of substitutes are increasing.
Intensity of Rivalry among Existing Firms:
Fierce competition is going on among the Existing company for increasing their
respective market share. Market of the Existing company limited in our country
because some people or organizations will not come to the due to various reasons.
On the other hand, these banks are sometimes not able to meet the large credit
requirements of some big corporate clients. All in all, the intensity of rivalry in the
banking sector is increasing, also the new banking regulations imposed by the
Bangladesh Bank is making it difficult for banks perform its business.
4.18 Gaps Model:
41
Customer Gap
Gap between customer expectation and perception.
The provider Gaps
The provider gaps are the underlying causes behind the customer gaps.
Gap – 1 Not knowing what customers expect.
Gap – 2 Not selecting the right service designs and standards.
Gap – 3 Not delivering to service standards.
Gap – 4 Not matching performance to promises.
Expectation:
1) Customers want loan without Bank statement.
2) They want loan only with trade license.
3) Most of the customers demand 100% debt Barden Ratio (DBR)
4) Low interest rate by comparing other commercial Banks which are
provisionary SME loans.
5) Monthly installment should start six months, after getting the loan.
6) Better service.
7) Customers want load without business security.
8) Without land/building mortgage security.
9) Quick barking throughout the country.
10) Easy repayment system of monthly installment or single installment.
11) They expect loan with minimum documents.
12) Bank should follow discounting system.
13) Company name should provide adequate amount, considering the
business trends.
14) Low cost and quality product.
15) Post purchase evaluation.
42
Perception:
1) Without Bank statement and trade license, customers on are not allowed
to receiving loan.
2) Debt Barden Ratio 60%.
3) Low interest rate by comparing other commercial Banks which are
Providing SME loans.
4) After getting the loan, monthly installment starts from next month.
5) Better service and easy repayment.
6) They are getting loan without land/building mortgage security.
7) N.C.C Bank providing SME loan, without business security.
8) Easy repayment system of monthly installment or single installment.
9) No discounting system is allowed.
10) Sometimes the queue of company name is too long.
11) High cost but quality product.
12) Post purchase evaluation.
Gap Minimization:
1) To educate the customer in company name so that customer enhances.
2) To educate the company official so that they could provide better service.
3) Plan for effective recovery.
4) Sometimes for electricity problems, expert, manpower, Bank can‘t provide
their service accurately. So to minimize this problem respected officer
should tell the provider.
5) Help employees cope with problem customers.
6) To monitor and teach service performance.
7) To forecast future expectations of customer.
8) To develop and test new service ideas.
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4.19 Results of consumers’ opinion survey:
We took fifteen SME loan borrower of NCC Bank Ltd. (Agrabad Branch) as sample. Our findings of responses shown in percentage figure:
a) Expected SME loan duration
20%
47%
0%
33%
0%
10%
20%
30%
40%
50%
For 3-months For 6-months Seasonal For 1-year
Comment: Out of fifteen consumers, three SME loan borrowers wanted to take SME loan for three months, seven for six months and five for year. No one is interested to take seasonal loan.
b) Types of collection like to provide
33%
40%
0%
27%Lands & buildings
Stock
Sanchypatra
Others
Comment: Five SME loan borrowers liked to give lands & buildings as collateral, six
borrowers wanted to give stock and four borrowers wanted to give other things as
collateral against SME loan.
44
c) Repayment system
47%
33%
20%
0%
10%
20%
30%
40%
50%
Installment basis Arbitrarily Others
Comment: Seven SME loan borrowers wanted to repay the loan in installment
basis, five of them wanted to repay arbitrarily and three borrowers wanted to follow
other system to repay the loan.
27%
47%
20%
6%
Thirteen percent
Fourteen Percent
Fifteen Percent
Sixteen Percent
Sixteen Percent
Fifteen Percent
Fourteen Percent
Thirteen percent
Comment: Out of fifteen consumers, four liked to take SME loan against 13%
interest, seven for 14%, three for 15% and one consumer wanted to take SME loan
against 16%.
45
CHAPTER- 5
FINDINGS &
RECOMMENDATIONS
5.1 Findings of the study
46
NCC Bank Limited provides the SME loans and advances to the borrower through
their different branches in all over the country. Though every branch is not best in all
respective area of the program but in a particular area a bank can be best. The
major point that I have identified in credit policy in procedure of giving SME loan &
advances of NCC Bank Limited is given below:
The SME loan procedure is complex and time consuming in NCC Bank.
The interest rate is high i.e. 17%.
Lack of professionalism in handling the SME loan.
Only 3% fund is sanctioned for SME in Agrabad branch.
Lack of knowledge/information about SME financing.
SME is highly risky and administrative cost is also high.
Lack of monitoring and supervision of SME loan.
Lack of professionalism among SME loan seekers.
Loan payment system is complex.
Cauterization of loan sanctioning power.
Lack of proper financial incentive for the employers.
Lack of Government support.
5.2 Recommendations for successful SME financing:
Due to availability of a large number of actual and potential consumers and adequate
raw materials, there is greater scope of developing SMEs in Bangladesh. There are
47
two potentialities of developing SMEs in our country. Firstly, huge amount of raw
materials and human resources. Secondly, a big market for it both in Bangladesh
and outside Bangladesh. However attempt has been made to put some suggestions
for successful SME financing.
Allowing completion of paper works within short possible time.
Loan application forms and procedure for application should be easy.
Terms and conditions for SME Loan should be simple.
Ensuring flexible conditions regarding collateral security.
Fixing lower interest rate.
Entrepreneurship development training should be arranged.
Advertising the SME loan products, provide proper information to SME
entrepreneurs.
Computerized MIS is necessary as number of loans is high.
Loan repayment system and mode of repayment should be specified.
Sanctioning power should be decentralized and should be more open.
Incentives should be given to the deserving employees for excellent
performance in SME financing.
Government support for marketing of products of SMEs through EPB and
Bangladesh embassies would be required.
Punishment for bank employees indulged in unfair practices.
Chapter-6: Conclusion:
SMEs have been widely recognized for their important role in promoting economic
growth, generating employment, and contributing to poverty reduction. SMEs
contribute substantially to economic growth and employment. As a developing
48
country Bangladesh has paid such attention to rapid industrialization particularly in
the development of small and medium business enterprises.
There are many small and medium business enterprises in our country that have
innovative idea, spirit and potentiality to do something productive for local consumers
as well as export abroad. So, development of small and medium business
enterprises is the demand of time.
This study was conducted to understand the SME banking and the problems of
providing credit facilities to small and medium business enterprises (SMEs) of
Chittagong city. In this regard we focus on SME banking of National Credit and
Commerce Bank Ltd.
The study also focuses the nature and extent of particular sector of small and
medium business enterprises (SMEs) of some selected industry. Furthermore, if any
financial institution would like to invest in this sector, or try to do further study they
can take help of this report. Besides, small and medium size informal organization
can be benefited from this study.
Chapter- 7: References
Books
NCC Bank Training Book - NCC Bank Ltd
Credit Policy manual - NCC Bank Limited.
49
Managing Core Risk in Banking, Credit Risk Grading — Bangladesh Bank
Rose Peter S. ‗Commercial Bank Management‘ 5th Edition.
Valarie A. Zeithaml, Mary Jo Bitner ― Services Marketing‖ 4th Edition, 2008
Publications:
BIBM reading material on financing SMEs
Annual Report 2008‘- NCC Bank Ltd
Right Share Offer Documents 2010‘- NCC Bank Ltd
Articles:
Abdul Awal Mintoo, (SMEs in Bangladesh), CACCI Journal, Vol. 1, 2006
Chowdhury, Saiful Karim, ―Demand And Supply side constraints of SME
financing‖
Alam, Zahurul, ―SMEs in Bangladesh: A Roadmap for Economic
Development‖, Journal of Bangladesh Accountant.
Websites:
www. nccbank-bd.com
www.weekly-industry.com
www.bangladesh-bank.org
Chapter- 8: Appendix
SME= SmaII & Medium Business Enterprise.
SBLS= SmaII Business Loan Scheme.
HRRLS= House Repairman and Renovation Loan Scheme.
50
PLS= PersonaI Loan Scheme.
FSBLS= Festival Small Business Loan Scheme.
FPLS= Festival Personal Business Loan Scheme.
CFS= Consumer Financing Scheme.
STD= Special Transaction Account.
EPB= Export Promotion Bureau.
LRA=Lending Risk Analysis.
CRG=Credit Risk Grading module.
CC=Cash Credit.
(Cash Credit is a continuous type of short-term advance. ‗Under this system, the
banker specifies a limit, called the cash credit limit, for each customer, up to which
the customer is permitted to borrow against the security of tangible assets or
guarantees.‘)
HY= Hypothecation.
(It is the charge against property for an amount of debt where neither ownership nor
actual possession is passed to the bank. But constructive possession remains with
the bank as per deed of hypothecation.)
PL= Pledge.
(It is ‗Bailment of goods as security for payment for a debt or performance of a
promise‘. The possession of security is passed to the bank.)
PAD= Payment Against Document.
Appendex-1: Questionnaire.
Questionnaire
1. Name:
2. Address:
3. Age: a) Below 20 year. c) Between30-40 year. b) Between 20-30 year. d) Above 40.
4. Education:
51
a) Between SSC-HSC. c) BBA-MBA. b) Degree. d) Others.
5. Experience in business: a) Below 2 years. c) 5-10 years. b) 2-5 years. d) 10 years or above.
6. Kinds of Business: a) Manufacturing. c) Agriculture. b) Shops (Retail). d) Other.
7. Monthly income: a) Below 5000. c) Between 15000-40000. b) Between 10000-1 5000. d) Above 40000.
8. What is your expected duration of SME loan? a) For 3 months. c) Seasonal. b) For 6 months. d) For 1 years.
9. What type of collateral do you like to provide? a) Land& buildings. c) Sanchypatra. b) Stock. d) Others.
10. Which type of repayment system do you like? a) Installment basis. c) Others. b) Arbitrarily.
11. What is your expected rate of interest for SME loan?
12. Do you face any problem in getting loan?
13. What is your suggestion to overcome the problem?
Thank you