SME financing of Bangladesh Development Bank Ltd

Abstract

Bangladesh Development Bank Ltd (BDBL) is the prime concern of development financing institution of country that extends financial assistance both in local and foreign currencies for setting up new industries to boost up the industrial policy and financial reforms program of government towards market economy. In this report my prime focus would be SME department of Bangladesh Development Bank Ltd (BDBL).I will try to find out the overall activities of SME department of BDBL. For enhancing domestic investment to meet rising demand for employment generation, women’s empowerment and regional development, the role of SME is indispensable. In line with the Government’s and Bangladesh Bank’s Policy Guidelines, promoting a dynamic SME sector is a priority for the bank. For enhancing the knowledge and awareness of the officers on SME financing, a number of training programs were arranged by the bank in the year of 2011 on SME related issue. Besides that the bank actively participated in different SME fairs and seminars. The objectives of the proposed study are to find out all relevant information about SME banking. As I am doing my internship at BDBL, I thoroughly analyze their SME banking practices and find out all needed information. In this report I find out BDBL’s SME products, borrower’s eligibility to get the loan, its loan recovery success and provided some necessary recommendations for improving the SME products of BDBL. Bangladesh Development Bank Ltd (BDBL) has four types of SME products. The introduction of four new SME products namely “Ashar Alo” (for women entrepreneur), “Koler Chaka Takar Jhaka” (Industries loan), “Khamar Bari” (loans for the processing of agricultural products), and “Proshar” (Business Loan) makes the bank different from others. Ashar Alo is a SME loan, which is provided to the women entrepreneur. It helps to include women power in the economic development of the country and encourages women entrepreneur to do business in order to alleviate poverty from the grass-root level. Koler Chaka Takar Jhaka (industry/ service loan) is another type of SME loan. That loan is provided to encourage the middle class in operating business and make positive contribution in the economic development of the country, to make direct contribution in reducing poverty from the country and to earn foreign currency by producing export quality products. Khamar Bari (Agri- Product Processing Loan) is a type of agricultural loan. It makes contribution in the development of the country’s agricultural sectors, which is the main driving force of the country’s economic development and to make direct contribution in reducing poverty from the country by solving unemployment problem The final SME product is Prosar (Business Loan). That loan is provided to create an opportunity for the business men who are interested in medium and small enterprise and to make direct contribution in reducing poverty from the country by solving unemployment problem and finally improve the standard of living of the people of our country. The population sampled for the study was limited to the Bangladesh Development Bank Ltd where I was assigned to perform the study. In order to conduct the report, I have collected necessary information from two sources such a primary sources of information and secondary sources of information. Primary sources of information include face to face conversation with the respective officers, staff and customers of BDBL, oral interview of the responsible officers, observation of department of BDBL. Secondary sources of information include annual report of the BDBL in 2013 –2014, annual Budget of the BDBL, various document of the BDBL, relevant document's studies as provided by the officers concerned and extensive literature search on the basis of these documents of publication.