A study on SME loan products and procedure of BRAC Bank limited

Abstract

The principal reason of banks chartered by the government and the central bank is to make loans to their customers. Banks are expected to support their communities with an adequate supply of credit for all legitimate business and consumer financial needs and to price that credit reasonably in line with competitively determined interest rates. Indeed, making loans is the principal economic function of banks to fund consumption and investment spending by businesses, individuals, and units of government. How well a bank performs its function has a great deal to do with the economic health of fits region, because banking performance support the growth of new businesses and jobs within the banks trade territory and promote economic vitality. Moreover, bank loans often seem to convey positive information to the marketplace about a borrower’s credit quality, enabling a borrower to obtain more and perhaps somewhat cheaper funds from other sources. Therefore, evaluating evaluate BRAC Bank Limited’s financial performance by comparing it with that of the best performing commercial banks of Bangladesh. As the competition is increasing, the commercial Banks are constantly looking for scope to develop credit operation and performance appraisal to the market. However tight control on the part of the Central Bank, Bangladesh Bank restricts the scope for maneuvering in the market with new performance and credit operation. Therefore, bank require finding out untapped market space for growth. Moreover, in these liquidity crunch times, it is crucial for banks to be able to perform efficiently and effectively. If the bank is not being able to perform than the bank might go bankrupt which would have a significant impact on the economy.