The process of SMS loan and repayment behavior of customers: BRAC Bank Limited

Abstract

This report aims at providing an overall analysis of the repayment behavior of the SME loan borrowers of BRAC Bank Limited. Before going to the analysis, it is mandatory to know something about the organization, its core products that it offers to its customers; about the SME loan, its classifications and the whole of its process starting from loan sanction to recovery and closing of the loan. That’s why, first of all, I’ve made an overview of the organization, BRAC bank Limited, where I had completed my internship program. Here I tried to focus the bank’s history of origination, its mission and vision, major departments and business units and major products and services. Then, in the next part, I said something about the methodology of the report. How the data have been collected, how the study has been conducted. Next, comes the focal part of the report. The module of SME is the most vital part if this report, where I gave my concentration. Here I focused on SME products, the terms and conditions of giving SME loan, enterprise selection criteria and documentation. Then talked about the procedure of SME loan where I delineated the sanction, disbursement, repayment and closing of SME loan. After talking about the whole process of SME loan, I made an attempt to analyze the repayment behavior of SME loan borrowers in the last part. For this end in view, I have collected information about 40 SME borrowers. Then I have chosen eight major variables which have an impact on the recovery rate of SME loan. That is, these are the variables which may change the repayment behavior of SME borrowers. I found some significant variable like age, experience and income of the entrepreneurs which might have an impact on repayment of the loan. Finally I got some findings from the analysis of the repayment behavior of SME loan borrowers. Then I conclude my report saying some policy implications and limitations of the report.