SME loan financing of BASIC Bank Limited

Abstract

Financial sector is one of the most important sectors in a country and banks play an essential role in building the commercial backbone of the country’s economy. BASIC BANK Limited is one of the leading specialized Banks in Bangladesh. It preserves the highest ethical standards and community obligation worthy of leading corporate citizen and now searching for continuous improvement in productivity, operational efficiency and thereby enhancing local customer value. Since BASIC Bank Limited is a government owned bank but it is free from most of the difficulties which other government banks are engaged with. As a part of my under graduation program, I have completed my internship in this organization. During the period of my internship, I was officially appointed to work in the credit department. The report will reveal the background of the company, description of the loans, findings and recommendations based on the gathering of experience. The report is based on my critical observation while working in the credit risk department of BASIC Bank Ltd. Lending is one of the principal tasks of the bank to ensure all the segment of a bank. Sound lending practice is also very important for accomplishment and success of a bank. For the sake of sound lending, it is necessary to develop a sound policy and modern credit management techniques to ensure that loans/ advances are safe and the money will come back within the time set for repayment. For this purpose, proper and prior analysis of credit proposals is required to assess the risk. Loan procedure of a bank is really difficult to do because there are some criteria which have to follow step by step for approving a SME loan e.g. selection of a borrower, how much loan is providing, security and also approval process. It is a hard job for a banker to get through all the measures and it is unsafe for them and also for the bank. Bank credit is a vital means for bringing about economic progress in a country. BASIC Bank Limited, being one of the state-owned, mixture of development and commercial banks of the country, has some prejudice to finance directly on priority basis to agriculture, small and medium industry and business sector. Hence, it is very clear that BASIC Bank plays a significant role to move the economic wheel of the country.