REport on Brac Bank

31

Policies of different financial institution in the light of entrepreneurship development of Bangladesh

Letter of transmittal

Date: 27/12/2009

Shabnaz, Samia

Entrepreneurship development

American International University- Bangladesh

Banani, Dhaka.

Subject: Submission of Transmittal.

Dear Madam,

It is a great pleasure for me to submitting the report to you entitled by “Policies of different

financial institution in the light of entrepreneurship development of Bangladesh” as The

Compensation System is an essential part of banks all over the world. The Compensation System

is used in a bank to increase the performance and efficiency of the individuals and the bank as a

whole. It has been a great pleasure for me to work on this report as it provides many

opportunities to gain insights about the Policies of BRAC Bank ltd.

I am grateful to you for your continuous guidance in preparing this project. Finally, I also believe

that this report will satisfy you.

Sincerely yours,

Trisha Farjana Taher 07-08448-2

31


Acknowledgement

By the cordial mercy of Allah, now I am able to submit my report to our honorable madam Samia

Shabnaz. I strongly believe that it would not be possible for me to prepare such a report without

Almighty’s grace.

Now I would like to thank our honorable madam Samia Shabnaz for her keen efforts and invaluable

guidance, helped me to understand, what the policies of different financial institution in the light of

entrepreneurship development of Bangladesh, and impact on organization which facilitated the

successful completion of the report.

This acknowledgment will remain incomplete if I don’t thanks to those people who helped and being

corporate with us Md. Mohiuddin Ahmed, General Manager (Development), Gulshan branch,

Dhaka, for helping me to find necessary information regarding this report.

I would also like to express gratitude to my university faculty members. They should be remembered

because they produced the platform of our knowledge.

Finally I am really grateful to the other employees and officers of BRAC bank Ltd for their help and

valuable advice. Again, I would like to thank our honorable teacher for giving us such a chance in

completion of the report

Finally, I would like to say that, I have prepared this report from my own experience. I am ready to accept

my unwilling errors and omission which belong to me.

31


Executive summery

An entrepreneur is one who creates a new business in the face of risk and uncertainty for the

purpose of achieving profit and growth by identifying opportunities & assembling the necessary

resources to capitalize on them. To capitalize on resources he needs capital to fulfill his vision

and mission. In Bangladesh there are many financial institutions that help entrepreneurs in very

well such as they give loan with low interest, provide training, free consultancy, observation on

their work and be of assistance as well. The study will work on BRAC Bank Limited that Term

loans to industries especially to small-scale enterprises.

BRAC Bank started its journey in 2001 and just in 8 years proved to country’s fastest growing

bank. Today the bank has more than 100 outlets (branch and service centers), 175 ATMs and 429

SME Unit Offices across the country. It has disbursed over BDT1000cores of SME loan and has

over 500000 individual customers who access online banking facilities through their cards. Its

services cuts across all strata of clientele are it corporate, retail or SME.We see this as a start-a

new start for the dream Bangladesh we all have put our trust on.

31


Table of content

1. Introduction of the organization

2. Organizational overview

3. Introduction of the study

4. Scope of the study

5. Methodology

6. Limitations

7. Analysis & discussion

8. Findings

9. Recommendation

10. Conclusion

11. Bibliography

12. Appendix

Introduction of the organization

31


BRAC Bank Limited registered under the Companies Act 1913 on the year 2000, started

its operations from the 21st of January, 2001. BRAC Bank Limited, with institutional

shareholdings by BRAC, International Finance Corporation (IFC) and Shore cap International,

has been the fastest growing Bank in 2004 and 2005. BRAC Bank has been rated as one of the

four most successful and sustainable SME Banks in the world. It also has been recognized for

“ICMAB Best Corporate Award 2007’. It had been rated as “A” in Long Term and ST-2 in short

term.

A fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored market

niches in the Small and Medium Enterprise Business, which hitherto has remained largely

untapped within the country. In the last five years of operation, the Bank has disbursed over BDT

1500 crores in loans to nearly 50,000 small and medium entrepreneurs. The management of the

Bank believes that this sector of the economy can contribute the most to the rapid generation of

employment in Bangladesh. BRAC went public following an initial public offer (IPO) and got

listed on Dhaka Stock Exchange (DSE) in 2006. The Company, after approval from SEC, issued

50mn shares at Tk. 170 per share including Tk.70 premium. By the end of 2007, a major portion

of the Company’s shares were held by the institutions and general public, which accounted for

47.11%.

Organizational Overview

31


Basically BRAC Bank Limited performs major four types of functions – Term Loans to Industries,

Full-fledged commercial banking service, Technical Support to Small Scale Industries (SSIs), and

Micro-credit to rural poor.

BRAC Bank Limited is totally strict in its goal and for completing its objectives it has a strong

management system. In this report we have discussed detail about the functions and credit ratings

of BRAC Bank Limited.

Investment summary:

Share price BDT 792 million

Ordinary shares 15.8 million

Free float 50%

Average daily volume (shares) 97838

Market capital BDT 12656.16 million

Reserve & surplus 902.03

12wk high/low (shares) BDT 746.25/1690 million

Organizational goals:

• To employ funds for profitable purposes in various fields with special emphasis on small

scale industries.

• To undertake project promotion on identify profitable areas of investment.

• To search for newer avenues for investment and develop new products to suit such needs.

• To establish linkage with other institutions which are engaged in financing

microenterprises

• To cooperate and collaborate with institutions entrusted with the responsibility of

promoting and aiding SSI sector.

Building a profitable and socially responsible financial institution focused on

markets and business with great potential,thereby assisting BRAC and

stakeholders build a just enlightened,healthy,democratic and poverty free

Bangladesh.

Functions:

31


The Bank Offers:

a. Term loans to industries especially to small-scale enterprises.

b. Full-fledged commercial banking service including collection of deposit, short-term trade

finance, working capital finance in processing and manufacturing units and financing and

facilitating international trade.

c. Technical support to Small Scale Industries (SSls) in order to enable them to run their

enterprises successfully.

d. Micro credit to the urban poor through linkage with Non- Government Organizations (NGOs)

with a view to facilitating their access to the formal financial market for the mobilization of

resources.

In order to perform the above tasks, BASIC Bank works closely with its clients, the regulatory

authorities, the shareholders (GOB), banks and other financial institutions.

Organizational structure:

To achieve its organizational goals, the Bank conducts its operations in accordance with the

major policy guidelines laid down by the Board of Directors, the highest policy making body.

The day to day operation of the Bank is looked after by the management.

A. BOARD OF DIRECTORS

As stated earlier the Government holds 100 percent ownership of the Bank. All the

Directors of the Board are appointed by the Government of Bangladesh. The secretary of the

Ministry of Industries is the Chairman of the Bank. Other Directors of the Bank are senior

Government and central Bank executives. The Managing Director is an ex-officio member of the

Board of Directors. There are at present 7 Directors including the Managing Director.

B. MANAGEMENT

The management is headed by the Managing Director. He is assisted by the General Managers

and Departmental Heads in the Head Office. BASIC Bank is different in respect of hierarchical

structure from other banks in that it is much more vertically integrated as far as reporting to the

Chief Executive is concerned. The Branch Managers of the Bank report direct to the Managing

Director and, for functional purposes, to the Heads of Departments. Consequently, quick

decision making in disposal of cases is ensured.

31


Resources & Capabilities

BRAC Bank Limited is well prepared to and capable of meeting the demand for a broad range of

banking services. It has got adequate resources, both human and physical, to provide the

customers with the best possible services.

A. Physical and technological resources

A great deal of investment for developing the physical resource base of the Bank has been made.

The Bank has its presence in all the major industrial and commercial hubs of Bangladesh in order

to cater to the needs of industry and trade..

Major features of these branches are:

• Fully computerized accounts maintenance.

• Well decorated air conditioned facilities.

• A fully operational computer network which is currently being implemented.

The work of Local Area Network (LAN) and Wide Area Network (WAN) installation having

reliable and secured communication between the branches and the Head Office is in progress to

facilitate any Branch Banking and ATM Services.

• Money counting machine for making cash transactions easy and prompt. Fifteen out of twenty

six branches are authorized dealers of foreign exchange. This facilitates speedy disposal of

transaction of export and import trade.

B. Human resources

BRAC Bank Limited has a well diversified pool of human resources which is composed of

people with high academic background. Also, there is a positive demographic characteristic -

most employees are comparatively young in age yet mature in experience.

As of December 2003 the total employee strength is 523. The strength is 435 excluding the

menial staff. BRAC bank Limited has been investing its resources with a view to developing an

efficient and professional work force. Two approaches are mainly used in this regard.

C. Training

31


Intensive training program, on a regular basis is being imparted to employees of both

management and non-management levels to meet the challenges in the banking industry and to

help employees adapt to changes and new working conditions. During the year

2003, a total of 164 employees of the Bank were provided with training in various fields.

Out of them 6 employees participated in training courses abroad.

D. Recruitment of New Officers

The Bank follows a strict recruitment policy in order to ensure that only the best people are

recruited. The Bank, so far, has recruited four batches of entry-level management staff, all of

whom have excellent academic background.

Monetary & Financial Resources

31


Like any other financial intermediaries, BRAC Bank Limited is no exception in performing its

core functions viz. Mobilization of fund and utilizing such mobilized fund for profitable

purposes.

A. Mobilization of fund

The main sources of fund for the Bank are:

1. Deposit, and

2. Borrowing

1. Deposit

Deposit is the mainstay of the Bank's sources of funds. Following usual practices, it collects

deposit through:

A. Current Deposit

B. Savings Deposit

C. Term Deposit

2. Borrowing

Apart from deposit, BRAC Bank Limited received funds from:

A. Bangladesh Bank

B. Asian Development Bank (ADB)

C. KFW (kreditanstalt fur Wieder-aufbau Credit Institution for Reconstruction), a German

development bank. All of these funding sources are for relatively longer period. Receiving the

credit lines from ADB and KfW has been a recognizing of the Bank's highly satisfactory

performance.

B. Utilization of Fund

BRAC Bank Limited utilizes its funds in accordance with its organizational goals and corporate

strategy. Main use is for lending to industrial and trade sectors. Maintenance of cash and

statutory liquidity reserve with the Bangladesh Bank covers 20 percent of demand and time .

Introduction to the study

31


Bangladesh is a country with high density of population, low per capita income and agricultural

productivity. A large number of population are unemployed due to weak industrial bases and

lack of employment opportunities .The rapid population growth ,resulting in addition to the

civilian force is posing a great threat to the economic development process of the country.

To generate employment opportunities development of various type of entrepreneur can play a

vial role for the economic development of the country. To establish enterprise, emphasize should

be given to the development of entrepreneurship. Without entrepreneurship development,

process will not see the face of success. lack of entrepreneur knowledge will create barrier to the

success for the potential entrepreneurs.

Entrepreneur is the attempt to create value through recognition of business opportunity, the

management of risk falling appropriated to the opportunity and through communicate and

manage skills to mobilize human financial and material resources necessary to bring a project to

completion benefits of entrepreneurship are:

Creating own destiny.

Making a difference.

Reaching Impressive profits.

Reaching full potential.

Contribution to society and to be recognized for the efforts.

Doing what is enjoy able and having fund it 200.

Besides benefits there are some draw backs also. Such as:

Uncertainty of income.

Risk of loosing your entire investment.

Long hours and hard work.

Lower quality of life until the business gets established.

High level of stress.

Complete responsibility.

Discouragement.

31


Entrepreneurship development processes helps increase the benefits of entrepreneurship and

reduce the drawback of entrepreneurship.

Entrepreneurial growth is affected by several factors. An important factor is the economic

environment. An essential element in economic environment is capital. Capital is the most

impartment factor of production for the establishment of an entrepreneur. Increase in capital

investment in. results in increase in profits which help in acceleration the processes of capital

formation.

Financial institutions play an important role in this regard. Most of the time entrepreneurs

borrow resources for the setting up of their entrepreneurs to set up an industry. Financial

institutions and banks provide facilities in the form of finance, Purchase of land, liability of fixed

asset, plant and machinery and hire purses in statements etc.

Various types of financial institution provide financial investment to the entrepreneur provide

bonus govt. owned commercial banks like BASIC Bank, Bangladesh development Bank etc.

Provide various types of loan cataloging them in to the different groups for different types of

entrepreneurs. On Bank Financial institution Like IDLC, IPDC, lanka Bangla Finance, Midas etc

are also providing different incentives to the entrepreneurs. Microcredit organizations like

BRAC ,Grameen bank, Proshika, ASA and etc are working for the rural development by giving

micro credit loan to the rural people and achieving them to name of full utilization of it.

Different financial institution hold different types of polices have an impact on the

entrepreneurial growth in Bangladesh. There is a scope to review the Polices of different

financial institution from different perspectives that is why having select this topic for our term

project.

31


Scope of the study

We have collected data from the Gulshan branch of BRAC Bank in Dhaka; we have mainly tried

to cover all the information needed to know about the functions played by the bank as well as the

various loan schemes and deposit schemes offered by the bank for Entrepreneurship

development in Bangladesh. The entire interviews are taken from the General Manager or

Managers or various upper level officers of the bank. We will do our interview by the help of

Md.Mohiuddin Ahmed, General Manager (Development), Gulshan branch, Dhaka

Methodology

To collect primary and secondary data there are used few methodologies. It is important to notice

that the data collection refers to information about each variable and past study about the

relationship between them. The idea is to proceed with literature and company data, following

two methods: qualitative and quantitative. Judgmental sampling methods will be used to conduct

the research. Data are collected from Journals, e-journals, Text books, e-books, Questionnaire,

Observation; Interview for analyzing data Microsoft Office Excel 2007 will be used

Limitation

Though we are lucky to get the chance to prepare this report but unfortunately we have faced

some difficulties. We tried to overcome the difficulties and gave our best effort.

When preparing this report, some difficulties we faced:

The sample size for the research is relatively small. A larger sample size would yield

more accurate results.

There will also be a serious time constraint.

It is realized prior the survey that not everybody will be willing to participate in the

interview.

At the same time, whatever secondary data is collected they are sometimes not

appropriate to the relative subject matter.

31


Analysis and Discussion

To start, survive and progress continuously and develop organization that outlive its creator an

entrepreneur must develop basic management skill. These skills are more important than an

entrepreneur's background or environment. This can be developed regardless of background or

skill through education, training and arranges different kinds of programs. As the organization

grows and gets bigger its organizational structure, market area, management styles are also

changed. Entrepreneurs have to cope with the changing conditions of the business.

Classification of loan:

A. C orporate loan :

Brac bank offers a full array of financial services to corporations and institutions. Having

access to the deepest and of the country, Brac bank is there to assist business in Bangladesh

Overdraft:

This is an on-demand credit facility designed to meet day-to-day operational activities of the

business, including purchase of raw materials and expenses

Short Term Loan/ Revolving Loan/ Demand Loan:

This scheme is to meet different short-term fund requirements client Payment of duty, Tax,

VAT and other expenses related release of goods from customs through pay orders in the

customs authority or Bangladesh Bank cheque is payable through this system

Loan Against Trust Receipt (LATR):

This is a loan against a Trust Receipt provided to the client whendocuments covering an

import shipment are given withou payment.Under this system, the client will hold the goods

of their sale proceeds in trust for the bank, until the loan allowed against the Trust Receipt is

fully Paid.

Terrm loan:

This facility will support the long-term growth of business type of loan is Primarily used for

fixed asset financing, such as the acquisition of capital machinery, equipment and vehicles.

B.Commercial Credit:

The Bank also supports development of trade, business and other commercial activities in the

country. It covers the full range of services to the exporters and importers extending various

facilities such as cash credit, export cash credit, packing credit, short term loans, local and

31


foreign bills purchase facilities. As on December 31, 2005 total outstanding commercial loans

stood at Taka 5,013.55 million compared to Taka 4,024.70 million in 2004.

C.SME banking :

Loan products:

Anonno rin|:

Anonno is a term loan for small scaled business

Product Type

Loan Ceiling

Tenure

Loan amount

Interest Rate

Required loan amount + up front installment(if any)+ all fees and charges with applicable VAT

EMI-12 to 36 months Single Installment- 3 to 9 months

BDT 3 lac to below 10 lac

Equated Monthly Installment & Single Installment

31


Loan processing Fees

Apurbo rin:

Apurbo is a term loan for medium size business

Product Type

Loan Ceiling

Tenure

12 to 36 months

BDT 8 lac to 30 lac

Equated Monthly Instalments

2.5% of base loan amount+ VAT

17.8% for New Loan

17.25% for 1st time repeat (if applicable)

17.00% for 2nd time repeat & so on (if applicable)

31


Interest Rate


Security

Aroggo rin:

Product Type

Loan Ceiling

BDT 3 lac to 30 lac

Equated Monthly Installment

Registry Mortgage of land property, Hypothecation on present & future assets, two personal

guarantors & post dated cheques

1% of loan amount+ VAT for new loan

0.75% of loan amount + VAT for Ist time repeat (if applicable)

0.50% of loan amount + VAT for 2nd time repeat & so on (if applicable)

17.00%

31


Tenure

Loan amount

Interest Rate


Security

For 3 lac to below 10 lac -2.5 % of base amount+ VAT

For 10 lac to 30 lac-1 % of loan amount+ VAT

For 3 lac to below 10 lac- 17.25% for new loan &

17% for 1st repeat & so on (if applicable)

For 10 lac to 30 lac- 17%

For 3 lac to below 10 lac- Required loan amount + up front installment+ all fees and charges with

applicable VAT

For 10 lac to 30 lac- Required loan amount

12 to 48 months

31


Double loan

Double loan on your deposit for small & medium size business

Product

Type

Loan Ceiling

Tenure

Interest Rate

EMI-12 to 36 months

Single Installment- 3 to 9 months

BDT 5 lac to 30 lac


For 3 lac to below 10 lac -Hypothecation on present & future assets, two personal guarantors &

post dated cheques

For 10 lac to 30 lac-Registry Mortgage of land property, Hypothecation on present & future assets,

two personal guarantors & post dated cheques

31



Security

Prothoma:

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

Product Type

Loan Ceiling



BRAC Bank FDR (50% of the loan amount), Hypothecation on present & future assets, two

personal guarantors & post dated cheques

1.5% of loan amount+ VAT

EMI- 17% &

Single Installment- 17.8%

31


Tenure

Loan amount

Interest Rate


Security

Proshar:

Proshar is a term loan for small & medium size Manufacturing business

Hypothecation on present & future assets, two personal guarantors & post dated cheques


15%


EMI-12 to 36 months

Single Installment - 3 to 9 months

31


Product Type

Loan Ceiling

Tenure

Loan amount


For 3 lac to below 10 lac -2.5 % of base amount+ VAT

For 10 lac to 30 lac-1 % of loan amount+ VAT

For 3 lac to below 10 lac- Required loan amount + up front installment+ all fees and charges with

applicable VAT

For 10 lac to 30 lac- Required loan amount

For 3 lac to below 10 lac -12 to 36 months For 10 lac to 15 lac-12 to 48 months

For above 15 lac to 30 lac – 12 to 60 months

BDT 3 lac to 30 lac

Equated Monthly Installment

31


Interest Rate

Security

Supplier & Distributor Loan:

Supplier & Distributor Loan a loan for various suppliers & distributors to expand their businesses

Product Type

Loan Ceiling

Tenure



For 3 lac to below 10 lac -Hypothecation on present & future assets, two personal guarantors &

post dated cheques

For 3 lac to below 10 lac- 17.25% for new loan & 17% for 1st repeat & so on (if applicable)

For 10 lac to 30 lac- 17%

31


Loan amount


Interest Rate

Deposit products

Prapti Current Account:

Prapti current accont is an interest bearing current account. This account ensures the profitable and easy

transaction facilities for Businesses.

Hypothecation on present & future assets

17.25% for New Loan

17.00% for 1st time repeat & so on (if applicable)



EMI-12 to 36 months

Single Installment - 3 to 9 months

31


Eligibility

Features

SME banking services:

-In the year 2009 1.35 lac SME loans have been maintained by SME banking services.

D. Micro Credit

Brac Bank launched a Micro Credit Scheme in 2001. Micro Credit Scheme provides for the poor

for generation of employment and income on a sustainable basis particularly in urban and

suburban areas. The Bank follows three systems of credit delivery.

These are-

1. Lending to the NGOs who on-lend to their members. At present there are thousands of NGOS.

2. Lending direct to the targets groups or ultimate borrowers under the Bank’s own management.

Interest bearing current account

Up to 4% interest on daily balance

FREE Smart ATM Card with BDT-100,000 withdrawn facility (per day) from ATM & BDT-

300,000 from POS

No upfront relationship fees

Any institution can open this account in the name of the Institution

Opening balance only BDT. 5,000 only.

31


3. Lending direct to the member-borrowers and NGOs providing nonfinancial services like group

formation and monitoring and supervision on exchange for a supervision fee. At the end of 2005,

total amount of Taka 338.30 million remained outstanding as against Taka 284.10 million in

2004. Recovery rate during this period remained at a satisfactory level of 100.00 percent.

E. Other Activities

The Bank provides services for remittance, underwriting, guarantee, public offering of shares etc.

The bank also provides funds to investment and leasing companies. The Bank has recently

created a venture capital fund for equity support to innovative but risky projects

BRAC BANKs terms and condition regarding loans and deposit

Existing terms and conditions:

1. Tenure: 84 months

31


2. Interest Rate:182 days TB+6.50%,Margin(Indicative).At current 182 days TB Rate, the total

interest rate is at 14.50% pap

3. Face value: BDT 1000

4. Convertibility option:Stagerred conversion of 25% in the following manner:

-5th year 5% of issue size@ a price of 3 to 3.5 times of Book Value



BRAC banks different kinds of programs regarding entrepreneurship development are

given bellow:

Entrepreneur Development Program (EDP)

Starting a small business can be challenging. Entrepreneurs and small business owners are faced

with many hurdles and sometimes don’t have the resources they need to help them make tough

decisions. The Innovation Center at Brack bank has solved this problem by developing an

online Entrepreneur Development Program.

This program services Oklahoma communities and rural areas. The program will take

entrepreneurs through eleven essential areas of small business ownership. No matter what type of

business you are starting or are currently involved in, this program is sure to provide a wealth of

information.

How the Program Works

The non-credit program includes access to the online course as well as virtual business

support through the Innovation Center staff.

Individuals may enroll in the program at any time and proceed at their own pace. Upon

completion of the program, they will receive a certificate of completion.

31


When the program is utilized from beginning to end, participants will be equipped with

an overall knowledge of all areas of entrepreneurship

Module Topics

The Entrepreneur Development Program consists of eleven learning modules. These modules

have information in regard to entrepreneurship, starting a business, and managing a business to

include:

Entrepreneurship

Business Plan Rationale

Writing a Business Plan

Sources of Funding

Entity Selection

Taxes

Accounting

Financial Statements

Marketing

Management

Employment Law

Features

24/7 Access from anywhere at anytime

Downloadable examples of a sample business plan and sample financial statements

31


Access to Innovation Center staff

Free access to three small business workshops (limit 3 - valid up to six months from

enrollment date)

Benefits

Fits in with your busy schedule

Learn how to directly apply the information you are learning

Unlimited access to professionals who can assist with individual business needs

Entrepreneurship development programme The objective of the Programme is to identify persons with entrepreneurial quality, to motivate

them and to train them through a structured training course so as to enable them to set up their

tiny and small scale industrial ventures with the assistance available from different agencies. The

programmes undertaken under this Scheme are:-

1. Identification, selection and motivation of potential entrepreneurs through intensive

campaign and seminars at a cost of Rs. 5000/- per programme and

2. A training course at an expenditure of Rs.20,000/- for 30 participants for a duration of 4

weeks. The financing pattern was set in 1986 and an upward revision is presently under

consideration.

A course fee of Rs.500/- per participant is charged in metropolitan cities and Rs.200/- per

participant in non-metropolitan cities. 50% fee is charged for SC/ST participants.

Micro Credit Scheme:

31


BRAC Bank launched a Micro Credit Scheme in 2001 Micro Credit Scheme provides for the

poor for generation of employment and income on a sustainable basis particularly in urban and

suburban areas. The Bank follows three systems of credit delivery. These are:

1. Lending to the NGOs who on-lend to their members. At present there are thousands of

NGOs.

2. Lending direct to the targets groups or ultimate borrowers under the Bank’s own

management.

3. Lending direct to the member-borrowers and NGOs providing nonfinancial services like group

formation and monitoring and supervision on exchange for a supervision fee.

Financial Performance*

YearEarning per share

Net Asset Value Per Share

Net Profit After Tax (mn)

Price Earning Ratio

% Dividend

% Dividend Yield

2009 64.37 381.62 1325.55 13.88 30 -

2008 61.46 343.28 973.45 17.52 30 -

2007 54.95 256.55 618.34 29.33 1015 -

2006 63.31 216.72 334.30 8.40 20 -

2005 38.54 156.58 192.68 -

2004 23.16 118.04 99.30 -

2003 12.09 97.75 30.28 -

2002 -15.15 84.25 -37.86 -

2001 -0.60 99.40 -1.51

Strength and weakness of BRAC BANK Ltd on light of entrepreneurship development:

Strength:

Bracs distribution network of more than 100 branches,350 small and medium

enterprise until offices, and 175 ATM sites span across Bangladesh and reach more

than 40000 borrowers.

BRAC is currently present in all 64 districts of Bangladesh, with over 7 million

micro-finance group members, 37,500 non-formal primary schools and more than

70,000 health volunteers.

31


BRAC is the largest NGO by number of staff employing over 120,000 people, the

majority of whom are women.

BRAC operates various programs such as those in microfinance and education in

over nine countries across Asia and Africa, reaching more than 110 million people.

The organization is 80% self-funded through a number of commercial enterprises that

include a dairy and food project and a chain of retail handicraft stores called ‘Arong’.

BRAC maintains offices in 14 countries throughout the world, including BRAC USA

and BRAC UK.

BRAC is a few years into their initiative to operate in ten African countries in the

next ten years.

BRAC Bank's services are specially directed towards promotion and development of

small industries.

BRAC tackles poverty from a holistic viewpoint, transitioning individuals from being

aid recipients to becoming empowered citizens in control of their own destinies.

Over the years, BRAC has organized the isolated poor and learned to understand their

needs by piloting, refining and scaling up practical ways to increase their access to

resources, support their entrepreneurship and empower them to become active agents of

change.

Women and girls have been the central analytical lens of BRAC’s anti-poverty

approach; BRAC recognizes both their vulnerabilities and thirst for change.

BRAC always strives to find practical and scalable approaches to eradicate poverty

wherever it is.

Lending direct to the targets groups or ultimate borrowers under the Bank’s own

management.

31


Adoption of new banking technology.

BRAc bank provide Tk 2557596882 large loan to other industry

WEAKNESS:

Their interest rate is high.

Do not provide effective training facilities.

Their installment duration is short.

Investment in micro credit is not appropriate.

Major findings:

Entrepreneur Faces Different Problems of receiving loan:

In Our Country Entrepreneur are facing more trouble for taking the loan for running their business or establish a new business. The most critical opposition problems are given below:

1. Lack of over Confidence: The Financial institution are not given loan to the Entry level entrepreneur because they think they have no sufficient evidence to recover the loan.

2. Risk of Bankruptcy: It is a major problem for Entrepreneur because the financial institution like banks think if the give the loan available to the Entrepreneur some times the can not pay the loan installment for that bank Will be stay on the Bankruptcy risk.

3. Misrepresentation of bank loan conduct: Sometimes the loan taker gives a wrong data or misrepresents of asset or document that bank could not utilize at a short time.

4. Ranking Rate Problem: Bank gives loan to the Rank rate person or company. At the beginning stage it is impossible for the new Entrepreneur. For Para diagram: BEXIMCO, SQUARE COMPANY, And Any trust person who has Salary ranking rate.

5. Lankness of Experience: They think the loan taker entrepreneur has no previous knowledge for business those he want to run. So this is one kind of problem.

6. Asset and Liability Problem: Most of the time the bank operating member want to make the bank asset management and some times make the bank liability management bank for that reason they could not provide loan the entrepreneur.

31


7. Interest rate problem: This is a major problem for bank some times interest rate is up and down so bank could not provide loan at any time so this is a problem for the entrepreneur.

8. Restriction of the Central Bank: All the financial institution could not provide loan available because if they give loan without any reason it can increase the money inflation of the market. So it’s a risk for the country.

9. Need Reliable Introducer: Bank couldn’t sanction any loan without reliable introducer. If the Entrepreneur have good introducer bank will give the loan or check other bank account.

Recommendation

31


31


31


31


Major findings

a. Problems found

2. Recommendation / suggestion

a. Solution of the problems: These are your suggestions based on the findings of the study for

improvement or sustainability of the organization, strengthening of the systems and procedures,

possible revision of policies, and other relevant suggestions. All suggestions must be based on the

study and not just personal perception, hypothetical or arbitrary

3. Conclusion

a. These are specific and direct answers to the questions in the statement of the problems or

objectives of the study

4. Bibliography

a. Books

b. Website

c. Interview

d. Journal

5. Appendix

31


Note:

Font – Time New Roman, size -12, subheading font size 14, heading font size 16

Spacing – 1.5 lines

Page number- topic and page number will be given from the cover page and it will be in the top right

corner.

Documents

REport on Brac Bank