Small and medium enterprise financing in Bangladesh: the means to battle unemployment and pverty

Abstract

Bangladesh, the country of immense potentiality is a developing country located in the Southeast-Asia. Every year the size of the economy of this country is growing up with the help of the proper utilization of resources. With GDP growth of about 7.5% year-on-year in nine months of 2015/2016 fiscal year, the total production of goods and services stands higher than ever. New industries and potential sectors are growing up besides the agricultural industry, which is still the biggest contributor in the national economy of Bangladesh. Moreover, Bangladesh is presently going through the phase of demographic dividend, almost one fourth of the country’s population consist of youth working age population and every year almost 2.00 million people are joining the labor force. Very exciting scenario indeed! But when the economists of our country are asked about the economic circumstance of Bangladesh, despite the presence of all these above statistics they do not seem to present a very convincing picture regarding the future prospect of this country. Searching for the reason of this depressing vibe reveals that, unlike the general mass the economists’ see-through the facts where they discover superfluous figures, exaggerated numeric and secrecy about the negative statistics of the country. Rather than presenting the truth the government and its affiliated authorities always present a picture which could convince people about their eligibility regarding governance. It is said that, identification of a problem is equal to 50% of the solution. But, in Bangladesh identification of problem is regarded as weakness and because of that rather than solving a problem from its root concealment of information gets the preference as always. But as an attempt to break that trend and to solve a problem from its very core the topic “Small and Medium Enterprise Financing in Bangladesh: The Means to Battle Unemployment and Poverty” has come into light. In this report attempt has been made to portray an analysis regarding Small and Medium Enterprise financing in Bangladesh and its potentiality. To bring a meaningful insight in the research work a survey was also been conducted within the students of BRAC Business School and the people in my social circle. In addition, the research was conducted by gathering information from the secondary sources e.g. online journals, newspaper articles, research statistics of national and international think-tanks, guidelines of organizations such as ADB, World Bank. After gathering the required data, MS Office and MS excel was used to find out optimum information from the sample and then analysis was done by following the deductive reasoning method to figure out the outcome. In conclusion it is found that, though SME financing is believed as the most potential source of financing in battling unemployment and poverty but it is yet to be the tool for that purpose judging by the present method of financing. So to enhance the performance of SME financing as par its prospective, recommendations are stated at the end to draw the conclusion of the project. Apart from the project work this report also consists of two other sections; organizational overview and description of the job during the attachment of 12 weeks. In the very beginning of the report information regarding the attached institution has been portrayed and in my case it was about IDLC Financing Limited. Inception of that section has been marked by history of the company; the status quo of 1985 is described in light of IDLC Finance Limited. In the next section product and service offerings have been mentioned followed by the operational coverage and organogram of this Non-banking financial institution. Then to mark the end; vision, mission and code of conduct of the company have been stated. In the second part titled job description, explanation has been given about the work I was designated to do during my time at IDLC Finance Limited. Then my daily job responsibilities are stated in time of my internship. After that varied aspects of the job and its relation to the knowledge I have gathered through the curriculum in the university have been portrayed. Then an explanation is given accompanied by recommendation about the issues IDLC Finance can contemplate on for efficient and better management of their work.