Internship Report on SME Activities of BRAC Bank Limited

8/13/2019 Internship Report on SME Activities of BRAC Bank Limited

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INTERNSHIP REPORTON

SME Activities OFBRAC BANK LIMITED

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Letter o Tr!nsmitt!"

July 25, 2010

Md. Lutfor Rahman

Associate Professor

Department of usiness Administration

!orthern "ni#ersity an$ladesh

Dhanmondi, Dha%a.

&u'(ect) Submission of Internship Report.

Dear &ir,

*his is my pleasure to present my internship report entitled Internship Report On SME Activities

of BRAC Bank Limited. + ha#e conducted my internship pro$ram in RA an% Limited,

-inance Di#ision , Anne *o/er , ulshan1, Dha%a 3 1212, under your close super#ision.

+ 'elie#e that %no/led$e and eperience + ha#e $athered durin$ the internship period /ill 'e helpful

in my future professional life. + /ill 'e $rateful to you if you accept the report. + /ill 'e a#aila'le for

defense on this report any time.

4our support in this re$ard /ill 'e hi$hly appreciated.

*han%in$ 4ou.

&incerely yours

.

6ictoria Jany Ro7ario

+D !o) A 080102119



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Ackno!"ed#ement

All praises to almi$hty od /ho has created me and has $i#en me opportunities and stren$th to

/or% /ith people. *his internship report mi$ht ne#er ha#e 'een completed /ithout the necessary

practical %no/led$e, assistance of many 'oo%s, articles, /e'sites, and primary data. +t enhanced

my %no/led$e on &M: acti#ities as /ell as 'an%in$ 'usiness. *han%s to all those persons, /ho

ha#e assisted me, pro#idin$ me cooperation, 'oo%s and articles. + /ould li%e to epress my

special $ratitude to Md. Lutfor Rahman, Associste professor, Department of usiness

Administration, !orthern "ni#ersity an$ladesh, for his super#ision, cooperation and ad#ises.

+ /as placed in &M: Department, -inance Di#ision of RA an% Limited to /or% as an intern

from March 1st 2011 to May 1th 2010. *he mem'ers of L ;RA an% Limiteduirement of A = has not 'een su'mitted for

any other purposes.

&i$nature

....................................

6ictoria Jany Ro7ario

+D !o) A 080102119

Ma(or in Mar%etin$


!orthern "ni#ersity an$ladesh.



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Certification

*his is to certify that, 6ictoria Jany Ro7ario is a student of usiness Administration Department

!orthern "ni#ersity an$ladesh 'earin$ +D) A 080102119. she has completed her internship

report titled ?&M: Acti#ities of RA an% L*D. for the partial re>uirement for the

completion of A pro$ram.

*he report is accepted in >uality form. +t is accepted to 'e presented in the internship #i#a #oice

+ /ish her e#ery success in life.

..................................... ....................................

Md. Lutfor Rahman ommittee hairman

Associate Professor


!orthern "ni#ersity an$ladesh



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'.8 Introduction

RA an% Limited, /ith institutional shareholdin$s 'y RA, +nternational -inance

orporation ;+-< and &horecap +nternational, started its (ourney in 2001 and in (ust 10 yearspro#ed to countryBs fastest $ro/in$ 'an%. *he an% operates under a dou'le 'ottom line

a$enda /here profit and social responsi'ility $oes hand in hand as it stri#es to/ards a po#erty

free, enli$htened an$ladesh. RA an% Limited is a scheduled commercial 'an% in

an$ladesh. +t esta'lished under the an%in$ ompanies Act, 1EE1 and its operation started on

July 9, 2001 /ith a #ision to 'e the mar%et leader throu$h pro#idin$ all sorts support to people in

term of promotin$ corporate and small entrepreneurs and indi#iduals all o#er the an$ladesh.

*he 'an% consist of ma(or di#isions named 1< orporate 'an%in$, 2< Retail 'an%in$, < *reasury, 9ue stren$th of RA an% lies in

the fact that RA one of the /orldBs lar$est pri#ate de#elopment or$ani7ation is its %ey

shareholder and the 'an%Bs #ision are thus ali$ned /ith those of RA.

*he reason RA an% is in 'usiness is to 'uild a profita'le and socially responsi'le financial

institution focused on mar%ets and 'usinesses /ith $ro/th potential, there'y assistin$ RA and

sta%eholders 'uild a ?(ust, enli$htened, healthy, democratic and po#erty free an$ladesh. RA

an% fulfills the purpose 'y reachin$ for hi$h standards in doin$ e#erythin$ for their

customers, shareholders, associates and communities upon, /hich the future prosperity of their

company rests.

RA an%s en#isa$es pro#idin$ mass financin$ 'y increasin$ access to economic

opportunities for all indi#iduals and 'usiness in an$ladesh /ith a special focus on currently

underser#ed enterprises across the ruralur'an spectrum RA an% is sur#i#in$ in the lar$e

'an%in$ arena throu$h its uni>ue and competiti#e products and it is the only local 'an% pro#idin$

100 inte$rated online 'an%in$ ser#ices.

RA an% Limited consists of four ma(or 'usiness di#isions namely orporate an%in$

Di#ision, Retail an%in$ Di#ision, &mall and Medium :nterprise ;&M:< and -orei$n *rade =



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*reasury.

orporate Di#ision pro#ides full ran$e of commercial 'an%in$ products and ser#ices to any

potential corporate clients includin$ multinationals, lar$e or medium local corporate, !@s,

institutional 'odies.

Retail Di#ision offers a /ide array of lucrati#e and competiti#e 'an%in$ products to the

indi#idual customers of the 'an%. urrently there are si lendin$ products and a num'er of other

attracti#e ne/ products /ill 'e launched shortly. +t also offers different types of term deposit

scheme and attracti#e &*D = &a#in$s deposit schemes $i#in$ interest on daily 'alance.

RA an% Limited, hereinafter called L, is a first $ro/in$ third $enerationscheduled

commercial 'an% incorporated on 20thMay 1EEE as a pu'lic limited company under ompanies

Act, 1EE9 /ith multinational colla'oration includin$ +- of *he Horld an% roup = &hore

ap. L started its operation on 9 thJuly 2001. *he main sponsor of the 'an% is the RA. *he

an% is pioneer and focused on pursuin$ uneplored mar%et niches in the &mall and Medium

:nterprise usiness, /hich hitherto has remained lar$ely untapped. L 'elie#es, this sector of

the economy can contri'ute the most to the rapid $eneration of employment in an$ladesh. L

caters the 'an%in$ ser#ices to its rapidly $ro/in$ customers throu$h CE 'ranches and 921 &M:

"nit @ffices.



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Shareho"din# Structure of Brac Bank Limited

s on &!.!"."/!/

!ame of &hareholder *otal &hares of *otal &hare

RA 1181882 9.88

MR. -a7le Fsan A'ed 2C5 0.001Mr. &yed Fumayun Ga'ir 2C5 0.001

Mr. A. &. Mahmud 222 0.001

Mr. -aru> A. houdhury 222 0.001

Mr. Dr. &aleh "ddin Ahmed 2CC 0.001

Mr. Md. Aminul Alam CC 0.001

Ms. *amara Fasan A'ed 222 0.001

Mr. &hi' !arayan Gairy 202 0.001

+nternational -inance

orporation ;+-uarestructure of the lo$o means solid and stron$, the $olden color in the lo/er portion of the lo$o means

the olden an$ladesh = her fertile land, *he lue color in the upper portion means the s%y

/ith enormous = unlimited opportunityB. *he /hite colored cur#e means ro/th and Pro$ressB.

Hhite circles in the 'lue color mean the flashin$ sun that $i#es li$ht to e#ery/here.



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Mana#ement of Brac Bank=

*he 'oard of directors is the top mana$ement and policy ma%in$ 'ody of RA an% L*D.

Presently the 'oard of directors consists of a chairman and fi#e directors. +t is to 'e noted the

mana$in$ director, is also a mem'er of the 'oard. *he directors are appointed from amon$st those

/ho ha#e eperiences and sho/n capacity in the field of finance and 'an%in$, trade, commerce,

industry etc. *he chief eecuti#e officer ;:@i Depositor Director


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M.&ar/ar Ahmed Fead of &pecial Assets Mana$ement ;&AM Fead of orporate Affairs

,unctiona" -epartment of BRAC Bank=*he departments of rac an% can 'e cate$ori7ed into t/o /ays are sho/n in follo/in$ chart)

Fuman Resource Di#ision

&M: Di#ision -inance Di#ision

orporate ash Mana$ement = ustodial &er#ice

Retail Di#ision redit Ris% Mana$ement

Pro'ashi an%in$ Di#ision @perations Di#ision

;-orei$n *rade Di#ision< ompany &ecretariat

Re$ulatory and +nternal ontrol

@perational Ris% Mana$ement

*reasury and -inancial +nstitution

+nformation *echnolo$y Di#ision

Pro$ram Mana$ement Di#i#sion

Research = De#elopment Di#ision

&er#ice Nuality Di#ision

orporate Affairs Di#ision


,unctiona" -eparment of BrAC Bank

Business :in#s Supportive :in#s


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:in#s of BRAC Bank Ltd=

RA an% Limited consists of four ma(or 'usiness di#isions)a. orporate an%in$ Di#ision

'. Retail an%in$ Di#ision

c. &mall and Medium :nterprise;&M:uality of service

?alue of innovative solutions

evel of trust with our clients

'arket knowledge

Through the team our clients have access to a wide range of financial services including*

ebt capital

:@uity capital

#ngoing relation support

9inancial markets

Our Ob(ectives=

To provide wide range of financial services professionally, efficiently and

competitively to achieve pre-eminent position in chosen market.

iversify revenue stream through product innovation.

Well-diversified credit portfolio, which produces a reliable and consistent return to

investment.

Our va"ues=



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&er#ices to our customers

Nuality in e#erythin$ /e do

ompetiti#eness and a /ill to /in

ro/th and de#elopment of our people

ontinuous producti#ity impro#ement

Professionalism and ethics in all our actions

ro/in$ profit for our sta%eholders

B. Retai" Bankin# -ivision

Retail Di#ision offers a /ide array of lucrati#e and competiti#e 'an%in$ products to the indi#idualcustomers of the 'an%. +t also offers different types of term deposit scheme and attracti#e &*D

=&a#in$s schemes $i#in$ interest on daily 'alance.

As a part of total 'an%in$ solution it has introduced an inno#ati#e and one o its %ind Remittance

&er#ices under the style and name ?&ecured = :asy Remittance &er#ice;&:R&


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*reasury Di#ision is one of the ma(or di#isions of RA an% . +t deals /ith money mar%et. All

treasury related products are processed in conformity /ith the an%Bs @perational, *radin$, and

Money mar%et, *erm placin$, Deal settlement, ommercial positionin$ %eepin$, *reasury, redit,

-inance = other applica'le policies.

*reasury @perations calculates in#estment fi$ure, prepares the auction application, for/ards the

application to an$ladesh an% for id and *reasury @perations maintains and reconciles all

accounts /ith forei$n and local 'an%s.

Ma(or Responsibi"ities=

+t deals /ith Money Mar%et

+t deals /ith -orei$n :chan$ed Department

RA an% is $radually $ro/in$ up to esta'lish itself in the an%in$ arena of an$ladesh to 'e

mar%et leader in terms of ser#ice >uality and a trusted partner in the de#elopment of an$ladesh.



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0.' -efinition of SME

&M: stands for &mall and Medium :nterprise. *he ?Policy &trate$ies for De#elopment of &mall

= Medium :nterprises ;&M:< 2005 pu'lished 'y &M: ell of the Ministry of +ndustries

cate$ori7es &mall and Medium :nterprises usin$ the follo/in$ definitions)

a. Manufacturin# enterprise

&mall :nterprise) an enterprise should 'e treated as small if, in current mar%et prices, the

replacement cost of plant, machinery and other partscomponents, fitures, support utility, and

associated technical ser#ices 'y /ay of capitali7ed costs ;of turn%ey consultancy ser#ices, for

eampleui#alentsQ

Medium enterprise) an enterprise should 'e treated as medium fi it has 'et/een 25 and 100

employees.

0.1 SME istor) of BRAC Bank Ltd=

Fe /ants to see po#erty 'anished fore#er. *his has 'een his sin$leminded pursuit in life. :#er

since a de#astatin$ cycle /rea%ed ha#oc on the li#es of the people and property in the coastal

re$ions of preindependence an$ladesh 1E80, e#erythin$ chan$ed for a youn$ chartered

accountant. *he youn$ man /as so mo#ed 'y the death and destruction that he, alon$ /ith somefriends, dedicated to set up F:LP to carry out relief and reha'ilitation efforts. Later after the

independence of an$ladesh the youn$ man sold his flat in London and decided to set up a relief

and reha'ilitation center in the /ar ra#a$ed an$ladesh. Fe ne#er loo%ed 'ac%.

Fe is &ir -a7le Fasan A'ed, the founder and chairperson of RA, the /orldBs lar$est !@,



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ar$ua'ly in terms of si7e and operation. RA has 'een /or%in$ relentlessly to reali7e the

hidden potential of man%ind, especially the ones /ho are most depri#ed of opportunities.

+t is this same #ision that moti#ated him to come up /ith a 'an% that could reali7e the untapped

potentials of this country. *raditionally 'an%in$ in an$ladesh has mainly addressed the mid to

lar$e si7ed 'usinesses or the professionals. Hhen &ir -a7le Fasan A'ed esta'lished RA an% he

did it /ith the $oal to ser#e the hi$hly moti#ated $roup of entrepreneurs /ho /anted to 'rea% out

of the #icious cycle of po#erty and ta%e control of their o/n future. He call them the

?Missin$ Middle. Fis lon$ cherished dream of a#ailin$ >uality finance ser#ices to these small to

medium 'usinesses finally come to reality. RA an% proud to 'e the pioneerin$ and lar$est &M:

'an% in an$ladesh, dischar$in$ o#er 10,000 core ta%a in &M: loan and helpin$

fulfillment of more than 25C,000 dreams that chan$e hundreds and thousands of li#es e#ery day.

&M: 'an%in$ di#ision of RA an% Limited has successfully made a mar% in creatin$

platform for small and medium entrepreneurs in ?Access to -inance, the %ey to the prime

o'stacle to/ards $ro/th of &M:s. &ince inception RA an% upholds the motto to finance the

?'issing 'iddle the underser#ed mar%et se$ment of &M:s. 4ears of mar%et %no/led$e and

understandin$, committed resources, country/ide co#era$e and /ell ali$ned strate$ies ha#e

made the 'an% an epert in &M: financin$ and the 'an% has successfully de#eloped an eaminedand successfully model in &M: financin$ in an$ladesh.

*he stren$ths of RA an%Bs &M: an%in$ Di#ision 'ehind the success of $ro/th are as

follo/s)

Dynamic human resource

ountry distri'ution net/or% and co#era$e

ontinuous de#elopment in creatin$ inno#ati#e products

"ni>ue loan appro#al process and monitorin$

Ro'ust ris% mana$ement system

*he 'an% has incorporated dou'le 'ottom line approach in its operation

1


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2


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&."." :conomic evelopment

:conomic de#elopment of a country lar$ely depends on the small and medium seal enterprises.

&uch as, if /e analy7e the de#elopment history of Japan, the de#elopment of small = medium

scale enterprises epedite the de#elopment of that country.

&.".& :mployment 0eneration

*he 'an% $earin$ employment opportunities 'y t/o /ays) -irstly, 'y pro#idin$ loan to the small

enterprises epandin$, these 'usinesses re>uire more /or%ers. &econdly, &mall = Medium

:nterprise ;&M:< pro$ram re>uires educated and ener$etic people to pro#ide support to

entrepreneurs.

&.".( ;rofit 'aking

&M: pro$ram is a ne/ dimensional 'an%in$ system in the 'an%in$ /orld. Most of the R@s are

pro#idin$ doortodoor ser#ices to the entrepreneurs. :ntrepreneurs are satisfied 'y the ser#ice of

the 'an% and ma%e profit.

&.". :ncourage 'anufacturing

*he focus of RA an% is to encoura$e manufacturin$ 'y the entrepreneurs /ho produce 'y

purchasin$ #arious types of materials. R@ try to educate them to produce material if possi'le'ecause if they can produce in line of purchase profits /ill 'e hi$h.

&.".< %pread the :xperience

Another reason of RA an% is to spread the %no/led$e on the importance of &M: 'an%in$

re$ardin$ #arious 'usinesses. *he customer ser#ices officer share their %no/led$e from #arious

'usinesses and tries to help the entrepreneurs /ho ha#e shorta$e of the $athered %no/led$e.

R@Bs /ho are the dri#in$ force of &M: di#ision of RA an% also $ather %no/led$e a'out

#arious 'usinesses and ma%e stron$er %no/led$e 'ase.

0.0 SME &roducts

RA an%, 'ein$ the youn$est 'an%, too% a step to 'rea% a/ay from usual tradition and tapped

into the true su'ur' entrepreneurial initiati#es.



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*oday, /ith o#er 10,000 cores of loans dis'ursed till date, RA an% is countryBs lar$est

&M: financier that has made more than 2C5,000 dreams come true

+f you ha#e a dream on /hich you trust, let us ma%e it true to$ether.

Loan products Deposit Products

Annono Rin

Apur'o RinAro$$o Rin

Di$oon Rin

Prothoma Rin*rade plus

usiness :>uity Loan

Proshaer Rin

usiness Loan&upplier -inance

Prapti urrent Account

&.&.! nonno )in

*his is a small scale loan desi$ned to finance small scale tradin$, manufacturin$ and ser#ice

#entures, especially to aid the purchase of fied assets and to finance /or%in$ capital.

Eligibility

:ntrepreneurs a$ed 'et/een 1K to C0 years

:ntrepreneurs /ith minimum 2 years eperience in the same line of 'usiness

A 'usiness /hich must 'e a $oin$concern /ith more than 1 year in operation

Maximum Amount

-rom minimum D* lac up to maimum of D* K lac

Features

Loan /ithout mort$a$e

-or ecellent 'orro/ers /ho ha#e paid or payin$ in due times, /e offer discounted rates

Nuic%, >uality 'an%in$ throu$hout the country



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Potential /omen entrepreneurs /ill also $et the facilities of this loan



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&.&." purbo )in

+n order to help our &M: 'orro/ers for financin$ /or%in$ capital or to purchase fied assets,

RA an% offers AP"R@. +t caters to the need of entrepreneurs /ho are operatin$ in tradin$,

manufacturin$, ser#ice, a$riculture, nonfarm acti#ities, a$ro 'ased industries and other sectors of

our economy.

Eligibility

:ntrepreneurs ha#in$ a minimum of years of some 'usiness acti#ities

A 'usiness /hich must 'e a $oin$ concern for years A$e minimum 25 years and maimum up to C0 years

Maximum Amount

&tartin$ from D* K lac to maimum of D* 0 lac -eatures

Hithout mort$a$e loan 'elo/ 10 lac

&imple loan processin$ for epandin$ your 'usiness

Nuic% dis'ursement

Dis'ursement in one or t/o installment

-lei'le monthly repayment loan

&.&.& ;athshala )in

*his is a loan desi$ned to meet the needs of small and medium si7ed pri#ate

educational institutions, such as %inder$artens, schools and colle$es etc.

Eligibility

A small = medium educational institute that is in operation for minimum years

*he institution should 'e sole proprietorship, partnership, pri#ate limited company or

society

*he educational institute must 'e a profit ma%in$ concern



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Maximum Amount

Minimum D* lac to maimum D* 0 lac -eatures

Hithout mort$a$e for loan 'elo/ 10 lac

Loan for fied assets purchase = ci#il construction Loan repayment can 'e spread up to9 years

Minimum documentation Monthly repayment loan

Nuic% dis'ursement

-lei'le interest rate 'ased on security

&.&.( roggo )in*his loan is suita'le for pri#ate clinics, dia$nostics centers and doctors cham'ers

to purchase fied assets under e>uated monthly installments.

Eligibility

o +nstitutions /ith at least 2 years in operation = profit ma%in$ concern

o Doctors ha#in$ 5 years of eperience

Maximum Amount

Minimum of lac to maimum of 0 lac -eatures

Loan /ithout mort$a$e up to K lac

:asy loan processin$

Loan repayment schedule is spread up to years

1 loan processin$ fee

-lei'le interest rate 'ased on security

&.&. igoon )in

D+@@! R+! is a loan facility for &mall and Medium enterprise. *his productBs main o'(ecti#e is

to help #arious &mall and Medium entrepreneurs to meet their shortstudy cash flo/ shorta$es or



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'rid$e the fundflo/ $aps. Dou'le loan on your deposit. -or your 'usiness epansion, you do not

need to encash your sa#in$s rather you can ta%e dou'le amount of loan on your deposit



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Eligibility

:ntrepreneur ha#in$ minimum 2 years of 'usiness acti#ities

*he 'usiness /hich must 'e $oin$ concern for 2 years

A$ed 'et/een 1K years to 55 years

Maximum Amount

Minimum of 5 lac to maimum of 0 lac D*

Features

Dou'le amount of loan on your deposit

Attracti#e return a$ainst the deposit

-lei'le repayment plan monthly installment and sin$le installments

Nuic% dis'ursement

&.&.< %upplier 9inance

&"PPL+:R -+!A!: is a loan facility for the enlisted &uppliers of #arious lar$e retailers,

mar%etin$ companies, distri'utors, eporters etc. *his productBs main o'(ecti#e is to help #arious

&uppliers to meet their shortstudy cash flo/ shorta$es or 'rid$e the fundflo/ $aps.

Eligibility

+f you are an enlisted supplier of a corporate house /ith /hich RA an%

has a corporate tieup

Fa#e minimum years of continuous operation

Fa#e 1 year continuous relationship /ith the purchasin$ firm Maimum

Amount

Minimum

D* lac up to maimum D* 0 lac

Features

o :>ual monthly installment and re#ol#in$ loan facility

o 1 of loan amount as the processin$ fee



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&. Aighlights of %': Banking ivision of B)1 Bank

&articu"ars @ear 18'8 @ear 1887 ro!th Rate

!o. o ranch 81 5C 2C.8K!o. &M: &er#ices entre C0 0 100

!o of &M: "nit @ffice 921 92E 1.KC

!o of A*M 20 150 5.

!o of DM 0 0 0

!o of remittance distri'ution

Pint

1K00 1K00 0

!um'er of &taff 2292 2109 C.5C

!o of Loan dis'ursed;cumulati#e< 0522 202101 51.02

umulati#e Dis'ursement ;in

million D*uit their (o' accordin$ to their /ish. &o it also hampers the &M:

&er#ice.

&.4.( ack of %kills :ntrepreneur

At that time entrepreneurs /ere not educated enou$h. *hey do not ha#e sufficient s%ills a'out the

different types of paper re>uirement. +t hampers the loan processin$ time.

&.4. Trade icense

*rade license /as another ma(or pro'lem for RA an%. Most of the 'usiness man does not

ha#e their 'usiness trade license. Hithout proper documents it /as >uite hard to sanction the



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loan.

&.4.< ;oor ;hysical Infrastructure

+nade>uate supply of necessary utilities li%e electricity, /ater, roads and hi$h/ays hinder the

$ro/th of &M: sector.

&.4.3 :mployee %kills

At that time employees do not ha#e sufficient %no/led$e a'out &M:. +t /as costly to train all

the employees. &o lac% of proper trainin$ to employees /as another o'stacle for &M: $ro/th.

&.4.4 ack of Information

At that time &M: (ust $ot a ne/ shape in our country. &o no one has clear idea a'out it. &o

#a$ue and /ron$ information /ere passed amon$ the people.

&.7 %teps Taken to #vercome the #bstacles

+n order to o#ercome the a'o#e mentioned o'stacles RA an% started follo/ some steps,

these steps /ere

&.7.! B)1 Bank started to expand their %': network

+n 2001 RA an% Limited their &M: loan 'usiness /ith 9 &M: sales and ser#ice center.

radually they ha#e started to epand their net/or%. !o/ they ha#e 921 &M: sales and ser#ice

center.

&.7." Training %ession for employees

At the #ery 'e$innin$ of &M: operation employees do not ha#e sufficient %no/led$e to handlethe customer. esides at that time there /ere lac% of educate employees to (oin this sector. &o

RA an% started to train up employees those /ho ha#e started to (oin in &M: di#ision.

&.7.& #rientation %ession for Borrowers

esides trainin$ /ith the employees L also started to train the 'orro/ers also. Most of the



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'orro/ers are not educate at all. :#en they donBt pass the &.&. or F.&.. &o L started to

or$ani7e orientation session for a $roup of 'orro/ers.

&.7.( Tried to #vercome 9inancial 1onstraint

At the #ery 'e$innin$ L in#estment /as lo/ in the &M: loan. radually they ha#e started to

in#est hu$e in the &M:. As they ha#e a stron$ 'ac%$round of shareholders.

&.7. :ducate the :ntrepreneurs

At that time most of the entrepreneurs (ust passed the &.&. or F.&. le#el. &o they ha#e a #ery

poor %no/led$e a'out the 'an%in$ transaction. *hey come for the loan 'ut they donBt ha#e any

trade license. &o educate the entrepreneurs /ere other steps to o#ercome the o'stacles.

&.7.< :mployee 1ommitment

As employee turno#er /as>uitehi$h so L started to $i#e handsome remuneration to their

employees. *hey started to pro#ide some etra facilities to their employees. esides they also started

to ta%e contract si$n for 2 or years from the employees.

&.7.3dvancement of Technology

RAan% Limited also started to de#elop their technolo$y. +n conse>uent of this they ha#etransfer their soft/are from M& to -inacle. !o/ the respecti#e department can easily find out

/hether the particular 'orro/er paid his installment or not.

0.'8 Se"ection of &otentia" Enterprise for SME

0.'8.' Enterprise se"ection Criteria

*he success of &M: /ill lar$ely depend on the selection of a 'usiness and man 'ehind it. +n

terms of the 'usiness ;:nterprise


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re$istration, /here#er applica'le.

(. *he 'usiness should 'e in le$al trade, i.e.Q smu$$lin$ /ill not 'e allo/ed or socially

unaccepta'le 'usiness /ill not 'e entertained.

. *he 'usiness must ha#e a defined mar%et /ith a clear potential $ro/th

uired.

3. Any ris% assessed 'y the mana$ement in turn /ill 'ecome a credit ris% for the 'an%. &o effort

should ma%e to understand the ris% faced 'y the 'usiness.

0.'8.1 Entrepreneur Se"ection Criteria

+n order to understand the capa'ility of the mana$ement 'ehind the 'usiness, the follo/in$

should 'e assessed)

!. *he entrepreneur should 'e physically a'le and in $ood health, prefera'ly 'et/een the a$e

of 2550. +f heshe is an elderly person closer to 50, it should 'e seen /hat the succession

process /ill 'e and /hether it is clearly defined or not.

". *he entrepreneur must ha#e the necessary technical s%ill to run the 'usiness, i.e.

academic 'ac%$round or #ocational trainin$, rele#ant /or% eperience in another

institution or years of eperience in this line of 'usiness.

&. *he entrepreneur must ha#e and accepta'le social standin$ in the community ;People

should spea% hi$hly of himueries< and has the a'ility to ta%e up ne/ and

fresh challen$es to ta%e the 'usiness for/ard.

. &uppliers or creditors should corro'orate that he pays on time and is $eneral in nature



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,"o! Chart for &rocessin#

&.!" Terms and 1ondition of %': oan


1)#

approaches

customer

1ustomer comes to the

+nit office with Trade

icense and other

1)# applies for 1IBen@uiry

1)# visit again toassess sales, stocks,

go-down-sister

1ustomer comesoffices with 0uarantor

fills 9 C1

1)# send

proposal to

A#

D# visit business

pprovesCrecomm

1)# visit

customer

A# receives

proposal

sends it to

oan admin

checks the docs

send them to

pprovalC)e$ecti

on advice

accordingly

1ustomer

signs

sanction,

advice

submit

original

docs 3

charge

isbursement loan after

getting all the re@uired

original documents

including 1IB 1learance

from Bangladesh Bank


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*he &M: department of RA an% /ill pro#ide small loans to potential

'orro/er under the follo/in$ terms and condition)

I *he potential 'orro/ers and enterprises ha#e to fulfill the selection criteriaI *he loan amount is 'et/een *% 2 lacs to 0 lacs.

I &M: /ill impose loan processin$ fees for e#aluation processin$ a loan proposal asfollo/in$Q

Loan Amount Loan &rocessin# ,ee

2 lacs to 2.EE lacs *% 5000

lacs to 5 lacs *% 8500

5.01 lacs to 15 lacs *% 10000

15.01 lacs to 0 lacs *% 15000

I Loan can 'e repaid in t/o /ays)a6 +n e>ual monthly loan installment /ith monthly interest payment, or

b6 y one sin$le payment at maturity, /ith interest repaya'le a >uarter end residual on

maturity

I Loan may ha#e #arious #alidates, such as, months, 9 months, C months, E months, 12

months, 15 months, 1K months, 29 months, 0 months and C months.

I *he 'orro/er must open a 'an% account /ith the same 'an% and 'ranch /here the

&M: has its account

I Loan that appro#ed /ill 'e dis'ursed to the client throu$h that account 'y account

payee che>ue in the follo/in$ manner) orro/er name, Account name, an%s name and

ranchBs name

I *he loan /ill 'e reali7ed 'y 1ste#ery month, startin$ from the #ery net monthBs

/hate#er the date of dis'ursement, throu$h account payee che>ue in fa#or of RA an%

Limited A. Hith an%Bs named and 'ranches name



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I *he 'orro/er has to issue an account paya'le 'lan% che>ue in fa#or of RA an%

Limited 'efore any loan dis'ursement alon$ /ith all other security.

I *he 'orro/er /ill install a si$n'oard in a #isi'le place of 'usiness or manufacturin$ unit

mentioned that financed 'y ?RA an% Limited.

I*he 'orro/er has to $i#e necessary and ade>uate collateral and other securities as per

'an%Bs re>uirement and procedures.

I &M:, RA an% may pro#ide 100 of the !et Re>uired Hor%in$ apital 'ut not

eceedin$ 85 of the a$$re$ate #alue of the +n#entory and Account Recei#a'les. &uch

loan may 'e $i#en for periods not eceedin$ 1K months. Loan could also 'e considered

for shorter periods includin$ one time principal repayment facility, as stated in loan

product sheet.

I +n case of fied asset -inancin$ 50 of the ac>uisition cost of the fied asset may 'e

considered. Hhile e#aluatin$ loans a$ainst fied asset, ade>uate $race period may 'e

considered dependin$ on the cash $eneration after the installation of the fied assets.

Maimum period to 'e considered includin$ $race period may 'e for C months.

&.!& 'onitoring

Monitorin$ is a system 'y /hich a 'an% can %eep trac% of its clients and their operations. &o

monitorin$ is an essential tas% for a R@ to %no/ the 'orro/ers acti#ities after the loan

dis'ursement. *his also facilitates the 'uildup of an information 'ase for future reference.

&.!&.! Importance of 'onitoring

*hrou$h monitorin$ a R@ can see /hether the enterprise in#ested the sanctioned amount in the

prespecified area of his 'usiness, ho/ /ell the 'usiness is runnin$, the attitude of the

entrepreneur, cash credit sales and purchase, in#entory position, /or% in process and finished

$oods etc, *his information /ill help the R@RA an% to reco#er the loan accruin$ to the

schedule and to ta%e the necessary decisions for repeat loans. Moreo#er, monitorin$ /ill also

help to reduce delin>uency. onstant #isit o#er the client 'orro/er ensures fidelity 'et/een the

'an% and the 'orro/er and tends to foster a report 'et/een them.



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&.!&." rea of 'onitoring

*he purpose is to %no/ the entire 'usiness condition and all aspects of the 'orro/ers so that

mishap can 'e a#oided.

i.usiness ondition) *he most important tas% of the R@ to monitor the 'usiness fre>uently, it

/ill help him to understand /hether the 'usiness is runnin$ /ell or not, and accordin$ly ad#ice

the 'orro/er, /hene#er necessary. *he fre>uency of monitorin$ should 'e at least once month if

all thin$s are in order.

ii.Production) *he R@ /ill monitor the production acti#ities of the 'usiness and if there is any

pro'lem in the production process, the R@ /ill try to help the entrepreneur to sol#e the

pro'lem. @n the other hand the R@ can also stop the misuse of the loan other than for the

purpose for /hich the loan /as dis'ursed.

iii.&ales) Monitorin$ sales proceed is another important tas% of the R@ it /ill help him to

forecast the monthly sales re#enue, credit sales etc. /hich /ill ensure the reco#ery of the

monthly loan repayments from the enterprise as /ell as to ta%e necessary steps for future loans.

iv.+n#estment) +t is #ery important to ensure that the entire loan has 'een in#ested in the manner

in#ented. +f the money is utili7ed in other areas, then it may not 'e possi'le to reco#er the loan.

v.Mana$ement of ra/ materials) +n case of a manufacturin$ enterprise, mana$ement of ra/

materials is another important area for monitorin$. +f more money is 'loc%ed in ra/ materials

then necessary, then the enterprise may face a fund crisis. @n the other hand the production /ill

suffer if there are not enou$h ra/ materials.

&.!&.( 'onitoring %ystem

*he R@ can consider the follo/in$ thin$ for monitorin$)

i. *he R@ /ill monitor each 'usiness at least once a month. Feshe /ill ma%e a monitorin$

plan schedule at the 'e$innin$ of the month. Durin$ monitorin$ the R@ must use the

prescri'ed monitorin$ from and preser#e in the client file and for/ard a copy of the report to

&M: head office immediately.

ii. A &M: 'ranch /ill maintain the follo/in$ files) *he file /ill contain Purchase Receipt,

Deli#ery MemoBs, and Nuotations. +n addition, all other papers related to furniture and fiture



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procurement

iii. @ther fied assets and refur'ishment) All fied assets and refur'ishment related papers such

as purchase receipt, deli#ery memoBs, >uotation, $uarantee and /arrantee papers, ser#icin$

related papers and any other paper related to fied assets are refur'ishment /ill 'e in this file.

iv. Lease a$reement file) *his file /ill contain all papers related to lease a$reement 'et/een the

&:&D& office and o/ners of the leased premises.

v. +ndi#idual client file) +ndi#idual files are to 'e maintained for each 'orro/er and that /ill hold

loan application, Loan Proposal, opies of Loan &anction Letter, Dis'ursement Memo,

Monitorin$ Report, + application and Report, redit report from other 'an% and all other

correspondents includin$ 'an% receipt

vi. &tatement file) All types of statement sent to &M: head office /ill 'e %ept in this file

chronolo$ically

vii. @ffice instruction file) All %ind of office instruction re$ardin$ administration should 'e %ept

in this file.

viii. @peratin$ instruction and $uideline files) All %ind of office instruction and $uidelines

related to operatin$ should 'e %ept in this file

ix.!e/ forms introduction file) All minutes of meetin$, /hene#er held, should 'e %ept in this

file.

x. &ecurity documents and le$al aspect file) @ne set of security documents and la/yerBs opinions

and su$$estions re$ardin$ issue /ill 'e %ept in this file. *he ori$inal should 'e send to &M:

head office on a /ee%ly 'asis

xi. &ur#ey form file) After conductin$ sur#ey, all sur#ey /ill 'e %ept in this file chronolo$ical.



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&.!( 1losing ;rocedure of %': oan

;re 1losing manual activities

!. Recei#e &M&-a re>uistin$ for closin$* *he 'orro/ers repay the loan asper repayment

schedule. Hhen the repayment is 'ein$ complete the 'orro/er re>uest the unit

officeR@ to close his loan account. *he unit officeR@ sends a &M&-a the loan

administration di#ision re>uestin$ to close the loan account of the respecti#e 'orro/er.

". Print the &M&-a) Recei#in$ the re>uest from the respecti#e unit officeR@, the loan

administration di#ision ta%es a paper print and ta%es necessary steps to close the account.

&. rin$ the loan file from achie#e) *he loan account file of the respecti#e 'orro/er is

'rou$ht from the archi#e. And the documents of file are chec%ed /ith M& record.

(. @'tain appro#al from the concern authority) it is re>uire the permission of concerned

authority to close the loan. +f concerned authority appro#ed the closin$ of the loan

account then net initiati#es are ta%en.

. hec%in$ in -inacle) *he loan administration di#ision chec%s the loan status in M&. +f

there is any difference found /ith the &M&-a from unit office and M& then deposits

sleeps are rechec%ed. *hen the loan administration di#ision calculates the total 'alance of

the loan account ;Led$er 'alance S 'uffer interest S:cise dutyuic% ser#ice to the clients, /hich mi$ht ta%e 15 to 20 days. Fypothecation loans are collateral

security free /hich other 'an%s ta%e securities. +f any clients $ot serious pro'lem in 'usiness after

ta%in$ &M: loans then it $i#es reschedule to repay the clients loan. Hhile ta%in$ repeat loan

&M:pro#ide #arious facilities to the clients.

(.(.& ifferent features-+- and &hore 'an%s are $oin$ to carry out e>uity participation

/ith RA 'an%. +t /ill deposit more funds to pro#ide more loans to the clients, /hich co#er

around the /hole country



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(.(.( ifferent services-to $et the loan, client do not ha#e to $o in 'an% directly. All sorts

of /or% are done 'y the R@ for clients to ha#e the loan >uic%ly. +n terms of necessities R@ $o to

clients home and 'rin$ repayments of the loan. +n fa#or of clients, R@ also /or% in holidays.

(.(. 'arketing %trategies for 1ompetitive dvantages

*o 'e successful the company must do a 'etter (o' than its competitors for satisfyin$ tar$et

consumers. *hus mar%etin$ strate$ies must 'e $eared to the needs of consumers and also to the

strate$ies of competitors. *he core competency of &M: is that it already set up the 'usiness

around the country and mar%etin$ officers $o to the door to door to the clients. @n the other

hand, it pro#ides the hi$hest amount for unsecured loans than other 'an%s. +n addition, it

pro#ides etremely >uic% ser#ices to clients 'y $ettin$ the loan.

(. eveloping 'arketing 'ix

*he set of controlla'le tactical mar%etin$ tools product, price, place and promotion that the

or$ani7ation 'lends to produce it /ants in the tar$et mar%et. *he main possi'ilities can 'e

controlled into four $roups of #aria'les %no/n as the 9our ;=s) Product, Price, Promotion and

Place.

(..! ;roduct

Means the $oods and ser#ices com'ination the company offers to the tar$et mar%et. +n #ie/ of

&M:, they ha#e short term and medium term loans /hether R@ pro#ide >uic% and >uality

ser#ices to clients. ustomer ser#ice is another element of product strate$y. A company desi$ns

its products and support ser#ices to profita'ility meet the needs of tar$et customers. &hort terms

products means CE12 months loan andmidtermproductmeans151K290Cmonthsloan. -or

eample in :id occasion most cloth merchants /ant shortterm loan to carry out a profita'le

'usiness.

(..!.! %hort Term ;roducts

:asy repay-these cate$ories of products are easy repaid for the clients. Hhen the pic% season

comes li%e hristmas:idPu(a then these shortterm products could 'e re>uired for the clients. +f the

clients can eercise these types of loan at the pic% season then clients 'usiness carry out li%e hot



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ca%es and easily can repay the loan to RA 'an%.

%hort-term fund re@uirement /ithout pic% season, many clients could ha#e re>uired

short funds to hold the tender or dealership. RA 'an% /ould 'e a $ood hand for the clients to

ha#e that dealership.

(..!." 'id Term ;roducts

;roper +tiliEation on a#era$e, clients $et these cate$ories of loan for 1K to 29 months. &o

clients can easily utili7e the money re$ardin$ the prospect of the 'usiness. :asy repay thou$h it

is a lon$ time repayment schedule, so clients ma%e the profits to $et the re>uired amount of loan

and repay the loan in a monthly 'asis.

(.." ;rice

Price is the amount of money customers ha#e to pay to o'tain the products. +n terms of &M: of

RA 'an%, clients ha#e to pay a certain amount of processin$ fees and stamp costs to $et the

loan. @ne of the factors that affect the companyBs o/n pricin$ mo#es. -or eample many 'an%s

ha#e processin$ fees /ith 1 or 2 additional char$e and other miscellaneous costs. ut RA

'an% has /ithdra/s other costs and char$es to carry out in the competiti#e mar%et.

1ostly-RA 'an% &M: interest rate is 29. &o it is little 'it of costly 'y the

competiti#e ed$e 'ut the client $ets this loan /ithin #ery short period of time. +n this

situation client cannot thin% a'out the interest rate 'ecause at the ri$ht time they $et the

loan, /hich they can eercise in their 'usiness, can yields profits.

:asy sanction +f the + ;redit +nformation ureau< is 'ein$ cleared from

an$ladesh an% and all information is 'ein$ transparent from client then the loan is

'ecome sanctioned in fa#or of client.

ll time consultancy Hhether the customers ta%e loan or not, R@Bs $i#e themoral ad#ices to the clients for the de#elopment of the 'usiness.

(..& ;lace 5istribution6

+t includes companyBs acti#ities that ma%e the product a#aila'le to tar$et consumers.&M:

already spread out its unit offices around the country. &M: tries to reach each and e#ery small



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'usiness enterprise to meet clientBs demands. Mar%etin$ channel decisions are amon$ the most

important decision that mana$ement faces. Mana$ement must ma%e channel decision carefully,

incorporatin$ todayBs needs /ith tomorro/ li%e sellin$ en#ironment. &M: of RA 'an%

already has 92E unit offices, /hichispreadthrou$houtthecountryand10ER@Bs/or%in$ under

these unit offices. *hese officers ha#e respecti#e selected super#isors /ho directly report

to the &M: main head office. &o &M: di#ision has e#ery/here in an$ladesh to ser#e all

respecti#e clients.

(..( ;romotion

+t means acti#ities that communicate the merits of the product and persuade tar$et customers to

'uy it. -or eample up to K lacs ta%a &M: donBt ta%e collateral security to pro#ide loan. Also for the

repeat 'orro/ers &M: discounts up to C interest rate and *%. 1000fortherespecti#eclient.

Ad#ertisement is one of the ma(or elements in promotion. &M: is focusin$ customers 'y

printin$ #arious leaflets, ma$a7ines and sho/in$ 'anners in front of their respecti#e unit offices.

(.(.! oor to door service it is a doortodoor customer ser#ices to clients. R@ %noc%

the door of the 'usiness enterprise /hether the client has re>uired any loan or not.

(.(." 'arket to non-Bank people) &ome clients do not maintain any account in the 'an%.*hey are dealin$ 'y cash. y pro#idin$ RA 'an% loans, these sorts of clients can 'e attached

/ith the 'an%s. +n addition, they can understand more a'out 'an%in$ and can ha#e a $ood

relationship /ith them.



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3.8 S:O$ Ana")sis*he comparison of &tren$ths, Hea%nesses, @pportunities and *hreats is normally referred to as a

&H@* analysis. +ts central purpose is to identify the strate$ies that /ill create a firmspecific

'usiness model that /ill 'est ali$n, fit, or match a companyBs resources and capa'ilities to the

demands of the en#ironment in /hich it operates. +t helps the or$ani7ation to identify ho/ to

e#aluate its performance and scan the macro en#ironment, /hich in turn /ould help or$ani7ation to

na#i$ate in the tur'ulent ocean of competition.

Stren#th=

ompany reputation ;rand ima$euipment

+nteracti#e corporate culture

omprehensi#e = $oal oriented team /or% at mid = lo/er le#el

Opportunities

Fu$e untapped su'ur'an = rural &M: mar%et

ro/in$ in less tapped sectors6ehicle finance, trade finance

:plorin$ the uneplored mar%et of o#erdrafts county/ide

Profitin$ from self$enerated lo/ cost deposit

eo$raphical epansion throu$h &M: A$ricultural 'ranches

+ntroduction of Mo'ile an%in$ /ill 'rin$ in ne/ era in 'an%in$ industry

+ncreasin$ trend in consumerism and ur'ani7ation dri#en 'y steady economic $ro/th

:eakness

Mar%et could 'e misleaded throu$h assumin$ RA as !@ name

A'sence of Funter-armerB strate$y for &M: centers

Fi$h employee turno#er

Lo/ remuneration pac%a$e

Mana$in$ PAR ;portfolio at ris%< under control delin>uency and !PL as tar$eted le#el

Retainin$ resources /ould 'e challen$in$

More positionin$ strate$y of the products ;'oth lendin$ = deposit


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:mer$in$ of ne/ multinational = international 'an%s

reater re$ulatory inter#ention in &M: lendin$

+ncreasin$ num'er of !PL ;non performin$ loan< most of cases collateral free


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4.1 Recommen&!tion

-or 'etter impro#ement of &M:, L can consider the follo/in$ recommendation)

I Reduce the interest rate 'ecause most of their competitors are pro#idin$ loans at a lo/er rate

for eample most of the competitors 'an%s pro#idin$ loan at 1215 interest rate

I +ncrease mar%etin$ acti#ities in the ur'an area 'ecause other competin$ industries are ta%in$

hu$e promotional acti#ities to capture the ur'an area /hich helps them to increase their customer

'ase.

I i#e proper trainin$ to the R@s /ith some real life pro'lem 'ecause they are all in all for

&M: loan. &ometimes they ma%e mista%es /hich results in customer harassment, increase

processin$ time and char$es.

ILoo% after R@s acti#ities 'y the O@s 'ecause sometimes they are hidin$ information and

ma%e mista%es to prepare financial statements and other documents.

I+ncrease amount of &M: loan appro#al 'y the Oonal officer, at present they can appro#e up to

5 lacs.

I+ncrease amount up to 10 lacs /ithout collateral security for pro#idin$ loans

I Recruit fresh O@s from outside to control R@ $rie#ances ;since present O@s are mostly

promoted R@s /ho ha#e (oined the an% all most at same timeuently chec% clients are perform all the terms and condition of &M: loan.

I +ncrease the remuneration and compensation pac%a$e for the entry and mid le#el

mana$ement other/ise L canBt retain the efficient and eperienced employees.



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4.0 Conc"usion =

RA an% intends to set standards as the mar%et leader in an$ladesh. +t demonstrates that a

locally o/ned institution can pro#ide efficient, friendly and modern 'an%in$ ser#ice on a

profita'le 'asis. +t /as an honor to /or% as an intern in a reputed or$ani7ation li%e RA an%

Limited. *he RA an% Limited is a 'an% that confirms the 'est ser#ice to the customers as

/ell as to the employees.

y /or%in$ in &M: di#ision, the %no/led$e that /as learnt /ould 'e helpful enou$h to sustain

/ith the real or$ani7ational en#ironment. &M: is the most emer$in$ sector to epand and RA

an% has e#ery potentiality to eplore the &M: 'usiness throu$hout the country. *his report

presents some si$nificant /ays to meet the future challen$es in &M: 'usiness. !e#ertheless, the

success of &M: 'an%in$ depends on the epertise and dedication of the field le#el officers.

*hat is /hy continuous trainin$ and moti#ation is #ery much rele#ant to run the &M: 'an%in$

successfully.



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Reerences

1. Philip Gotler ;2010


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Documents

Internship Report on SME Activities of BRAC Bank Limited