Complications and prospects of mis in bangladesh
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I would like to thank you for assigning all of us this be subject to prepare the report. This task has presented me the opportunity to explore one of the important areas of the MIS field which can be its utilization in the SME activities. The main topic of our job is “Problems and Potential customers of LOS in Bangladesh which consists of a comprehensive study on the small , and medium enterprise activities in BRAC Bank, Dhaka Financial institution and Mercantile Bank Limited. It was an excellent pleasure to work on the above-mentioned subject.
I tried my best to put careful effort pertaining to the preparation of this job. Any weak points or downside may occur as I are very much novice in this aspect. I would end up being grateful if you consider all those from justifiable manner. I will wholeheartedly meet any logic and suggestion about any kind of view and conception displayed in my assignment.
Almost all praises to almighty Thor who has produced us and has provided us opportunities and durability to work with persons.
This report might never have been finished without the required practical expertise, assistance of many books, articles, websites, and primary data. That enhanced the knowledge on SME actions of different banks as well as the complications of employing MIS in those banks. Thanks to all those persons, with assisted me, providing myself co-operation, literature and articles or blog posts.
I would like to express my exceptional gratitude to our Sir, Rahimullah Miah intended for his direction, co-operation and advises.
The members of BRAC Traditional bank, Dhaka Lender and Cargo Bank administration were extremely co-operative and helpful. They will helped me through providing several data, guidance and direction. I am also happy to all other employees of SME Getting back together Department for his or her support and assistance.
I would like to express my own gratitude to any or all the people which were involved equally directly and indirectly inside the preparation with this report. I’m sorry to the people whose names i have not stated, and their contribution is highly appreciated by me personally.
Objectives of the study:
The broad objective on this study comes with the following:
* To experience a clear understanding about the concept of SME (Small & Moderate
* To know just how SMEs job and run in Bangladesh
* To highlight the employment and implementation of MIS (Management Details Systems) in
the field of SME
* To learn and evaluate how several banks work SME financial operation around the country nevertheless their intensive networks
* To articulate major concerns and challenges for putting into action MIS inside the SME sector
Limitations from the study:
The study has suffered from several limitations ”
* Limited time is a big constraint with this research. The main topic of this record is vast in compared to the given time * More relevant data and information could not become collected because of nonavailability of sufficient catalogs and periodicals. Information in websites of banks is likewise insufficient. * Current and detail details about various SME sectors could hardly be found * Data via different financial institutions is highly private for the outside people and access to applications are not provided * Being females, all of us found various difficulties to collect necessary info and to prepare this survey
Methodology is a process or perhaps system whereby a study is being carried out when it comes to collection of info that is required to get reaching a conclusion on that study. Inside our study, information has been collected by using multiple tools. Much necessary details has been gathered by from your personal statement and that you one dialogue with the relevant officials. A questionnaire was designed to collect information about the use of SME loans, usage of SME credit facilities and revenue-expenditure with the enterprises. Focus Group Conversations (FGD) had been used to get a broader look at of the business environment to get SMEs, all their major drawbacks, labor industry mechanisms, demand for other free of charge services, the strongest and weakest points of SME services of numerous banks and a comparison with other players providing similar solutions. Complimentary information about indirect career generation, governance problems plus the costs of operation to get SMEs was put together via individual case studies
conducted in the branch office buildings of different financial institutions that offer just SME credit rating services. 3 practical financial institutions, named BRAC Bank, Dhaka Bank and Mercantile Bank Ltd were selected since sample banking companies purposively considering the amount of loan size, interest rate, loan processing service fees, period of loans, mode of finance and management. Policies relating to SME financing such as fiscal plan, monetary policy and inside policies of the banks were examined extensively with a view to discover the influence of existing policies about SME loans. Trend and pattern of bank auto financing to SME was examined by classifying the auto financing in terms of areas, rate of interest, types, category, and banks. The total methodology of the report can be shown under for better clarity and easier understanding through flowchart construction.
Figure 1: The Flow data construction
Main data collection:
Primary data of this job has been gathered from:
Branch Manager & Second Expert of different financial institutions.
In person conversation with SME department employees and staffs of numerous banks. Face to face conversation with clients of SME loans.
Secondary data collection:
Secondary data of this task has been accumulated from:
Annual Reports and released financial statements of BRAC Bank, Regular Chartered Traditional bank and Shahjalal Islamic Traditional bank Limited. Numerous prescribed types of bank purchase in SME Different Analysis Paper with regards to SMEs, Different Publications upon SMEs of different banks
Several text catalogs, brochures, booklets, files, exploration papers & materials. Official website of the three banking institutions
The whole record is being ready with the help of distinct computer applications such as MS Word, MS Excel, MS Access and MS PowerPoint.
The data necessary for this study were gathered from both equally primary and secondary sources; however , most the information was collected from secondary options. These two strategies are discussed below-
1 . one particular Introduction:
Today it really is widely recognized that information devices knowledge is essential for managers as most businesses need information systems to survive and grow. An information program has many applications, MIS can be one of them. Supervision information devices (MIS) is a specific category of information system that provides the mandatory information to the management regularly. It can be understood to be collecting and processing of raw data into beneficial information and its dissemination towards the user inside the required formatting. In fact an entire MIS involves all the systems that are designed to provide management with information to help in making decisions and to take care of organizations efficiently and effectively. Today, the term MIS is employed broadly in many contexts and includes decision support systems, resource and folks management applications, enterprise useful resource planning (ERP), enterprise performance management (EPM), supply sequence management (SCM), customer relationship management (CRM), project administration and database retrieval applications. In Bangladesh, the use of MIS in different companies can be evidently found. Nevertheless we gives our special focus on the little and channel enterprises. To start with, we need to know what is meant by an SME. An SME is defined as, “A firm been able in a customized way by simply its owners or partners, which has simply a small share of it is market which is not sufficiently large to have access to the stock exchange to get raising capital. SMEs typically have couple of accesses to formal programs of financing and dependprimarily upon financial savings of their owners, their families & friends. Subsequently, most SMEs are singular proprietorships & partnerships. SMEs can be defined against various criteria. The three parameters which might be generally utilized by the Government of Bangladesh to define SMEs will be: Capital expense in herb and machines ï€ Number of workers used ï€ Volume of production or perhaps turnover of business
Again, according to the industrial Policy 1999 (IP- 1999)
“Small Industries happen to be defined as industrial enterprises using less than 40 workers and/or having a set capital investment of less than Tk. 90 million. “Medium industry covers enterprises using between 55 and 99 workers and/or having a set capital investment between Tk. 100 and 300 million. “Cottage Industry covers household-based industrial units operated primarily with family labour
Part of SMEs in Bangladesh:
SMEs are recognized as search engines of financial growth and employment generation for lasting industrialization in both developed and producing countries on the planet. In circumstance of Bangladesh, there is no alternate of small , medium companies for speedy industrialization and national monetary growth through lower capital investment and employment technology. The commonly perceived worth often emphasized for their promotion especially in a developing region like Bangladesh include their relatively substantial labour power, dependence on native skills and technology, contributions to entrepreneurship development and innovativeness and growth of industrial linkages.
The case for cultivating SME development in Bangladesh is irrefutable as these companies offer bright prospects for producing large-scale work and income earning options at comparatively low cost for the un-and unemployed especially in the rural areas strengthening the efforts toward achieving excessive and suffered economic development which are seriously importantprerequisites pertaining to triggering a great exit from endemic poverty and socio-economic deprivation.
SMEs in the economy of Bangladesh:
In Bangladesh about 90% from the manufacturing and service sectors are gone down under SMEs category. SMEs account for about 45% of producing value addition in Bangladesh. They take into account about 80 percent of industrial career, about 90% of total industrial devices and about 25% of total labour pressure. Its total contribution to export earnings varies from 75- 80% based on the Financial Census 2001-2003 (The Fresh Nation, 2008).
According to the Bangladesh Bureau of Statistics, SME’s provide about 44 percent employment of the country. This contributes Tk 14, 940 crore (149. 40 billion) to the GDP during the monetary year 2006-07. In another stats we find that the total number of SMEs can be estimated at 79754 establishments, of which 93. 6% are small and 6th. 4% will be medium. The 2003 Private Sector Study estimated that about 6th million micro, small , and medium corporations defined as companies with less than 100 staff, contributed around 20-25% of GDP (The New Land, 2008).
Within the above statistics it is evident that the business enterprises are extremely strong regarding the number and their contributions, as a result the overall advancement Bangladesh’s SMEs are depending largely within the development of small scale enterprises. Larger growth of the SMEs will help eradicate lower income to a adequate level by simply removing different prejudices against labor intensive way and creating jobs pertaining to the competent manpower.
Uses of LOS in SME:
LOS can offer small , medium businesses a number of advantages. Today, leading companies and organizations are applying information technology as a competitive tool to develop new products and services, forge fresh relationships with suppliers, edge out competition, and substantially change all their internal procedures and businesses. For example , using MIS logically can help a company to become a industry innovator. By providinga one of a kind product or service to meet the requirements of customers, a business can boost the cost of industry entry to get potential competition and thus gain a competitive advantage. One other strategic utilization of MIS consists of forging electronic digital linkages to customers and suppliers. This can help companies to lock in organization and increase switching costs. Finally, it is also possible to use LOS to change the overall basis of competition in an market.
For example , within an industry characterized by price battles, a business with a brand new means of digesting customer info may be able to create unique product features that change the foundation competition to differentiation. The successful MIS supports a business’s long-range plans, offering reports based on performance analysis in areas critical to prospects plans, with feedback spiral that allow for titivation of every aspect of the business, including recruitment and schooling regimens. MIS not only reveal how things are going, but why and where overall performance is screwing up to meet the plan. These information include near-real-time performance of cost centers and jobs with detail sufficient for seperate accountability. Even though SMEs have the potentials, at the rapidly raising age of net, to utilize the newly come about technology dependent communication and information mediums, in acquiring their particular competitiveness, the slow rate of adoption is definitely evident. Wonderful opportunities could be created inside the SME sector through the procedure and usage of different connected technologies, including computer, net and other data and communication technologies.
In Bangladesh, the development of effective Managing Information Systems holds a number of challenges pertaining to small and method businesses. Not necessarily exercised in these businesses even though the technology is usually existent as well as the Government of the Peoples Republic of Bangladesh has reported the information and communication technology as one of the desire sectors of the country and taken varied initiatives to motivate diverse enterprises to get connected and commence operation in the technology. The newly elected government with the Peoples Republic of Bangladesh has declared their objective to develop the digital Bangladesh by 2021.
On the abovementioned context it truly is evident that small businesses of the country will be slow to use technology to boost their competition as
they are afflicted with their sheer small size and limited resources
Challenges of applying MIS inside the SME sector:
Within a developing country like Bangladesh, building, functioning, and retaining appropriate Managing information systems are challenging for a number of causes. For example , several information may not be captured and set into a program. Computers generally cannot be set to take into account competition responses to marketing techniques or within economic circumstances, among other things. In addition , the value of details erodes over time, and rapid changes in technology can make systems become obsolete very quickly. Finally, many companies discover systems development to be problematic because the services of competent programmers have reached a premium. Yet , considering the scenario of our region, we can summarize these complications in the next points: 1) It is not easy to work with workable information systems in the small and medium enterprises also to keep the flow of information system in the right way 2) The body of understanding in LOS is relatively the latest and scarce. Many of the terms used in MIS environments are unpractical, imprecise and controversial. 3) MIS problems typically are not easy to define or perhaps structure
4) MIS implementation and unit installation can be very expensive for tiny size companies looking to deal with their procedures more effectively. 5) Properly educated employees are a critical a part of an MIS. New employee hiring or employee schooling related to the MIS function adds to the implementation costs. 6) The online providers of MIS are missing in the small and medium businesses. For example , there is no scope for transferring accounts online or through CREDIT booth.
7) A lack of connection often is present between MIS personnel and management and also between LOS personnel and users associated with an organization 8) Once an MIS is established and installed in a organization, it may demonstrate to be an adamant system. Producing changes quickly to indicate fluctuating organization operations will not be possible with respect to the MIS style and operation. 9) Key business changes will require significant changes to the MIS, ultimately causing increased costs and downtime of information revealing. 10) The biggest flaw a great MIS may
possess is pulling incorrect or perhaps inadequate data for administration. This problem leads to wasted time and money for the small and moderate enterprises.
SME in financial:
Most SME ventures in Bangladesh depend on personal personal savings, family or other relaxed credit options. In reputation of this failing of the monetary market, tries have been recently made to appeal to it. Economic and advancement assistance designed specially to get small and medium enterprises in Bangladesh can be described as new and upcoming pattern. After the rise of micro-finance in the last two decades, small and moderate enterprises have come to the spotlight in the financial sector due to their contribution to economic climate and yet limited access to finance. It was not until 2010 that the federal government and policymakers recognized the value of providing extensive credit rating facilities to small and method sector business people to promote several initiatives, especially start-up corporations as well as types looking to level up. The banks and also other financial institutions, however , have been offering loans to such enterprises for lengthy, though not really in the nombre of SME Financing. Equally micro-finance institutions and financial institutions are beginning to realize the potential of the forex market and building new lending options for it. More recently the Small and Medium Venture (SME) Financing has become an important area to get Commercial Banks in Bangladesh.
To align the corporate insurance plan with the dangerous Central Traditional bank, banks are becoming more concerned about SME and opened windows to perform business in this particular region. Today, nearly all banks and non-bank financial institutions (NBFI) near your vicinity are featuring loans for the sector, beneath different governmental schemes along with through their particular product portfolios. Some particular financial agencies such as Basic Bank are also providing finance to the SME sector. Due to the fact that this segment of the market is fairly underserved, several formal banks (e. g. Exim Lender, Islami Traditional bank, NCC Bank) are little by little scaling down and designing lending options for them. In the financial sector reform software of Government of Bangladesh, improved financing to get SMEs by banks is known as a major part. Bangladesh Traditional bank, the nationwide bank, features $16 millionrefinancing scheme to market lending to SMEs by banks and financial institutions. In January june 2006, the bank acquired agreement with six banking companies and 8-10 financial institutions and about 2, 500 SMEs have benefited in the scheme upto the end of January (Bangladesh Bank). ‘Small and Channel Enterprise Sector Development Programme’, a $30 million task of Government of Bangladesh and ADB, is likewise in progress. However , these projects are still quite inadequate. Furthermore, being an forgotten market intended for long, there may be lack of know-how about the customers and their requirements reflecting in absence of appropriate lending technique.
5. In Bangladesh about 90% of the manufacturing and service industries will be fallen below SMEs category. SMEs take into account about 45% of manufacturing worth addition in Bangladesh. That they account for about 80% of business employment, regarding 90% of total professional units regarding 25% of total work force. The total contribution to foreign trade earnings differs from 75- 80 percent based on the Economic Census 2001-2003.
(The New Region, 2008).
* According to the Bangladesh Bureau of Statistics, SME’s provide about 44 percent employment of the country. It contributes Tk 14, 940 crore (149. 40 billion) to the GROSS DOMESTIC PRODUCT during the fiscal year 2006-07. In another statistics we find that the total number of SMEs can be estimated at 79754 institutions, of which 93. 6% happen to be small and 6. 4% happen to be medium. The 2003 Exclusive Sector Review estimated that about 6 million micro, small , and medium companies defined as enterprises with less than 100 employees, contributed around 20-25% of GDP ” (The New Nation, 2008).
* Today, the term LOS is used generally in a number of contexts and includes decision support systems, resource and people administration applications, organization resource preparing (ERP), venture performance administration (EPM), source chain management (SCM), buyer relationship managing (CRM)
project supervision and database retrieval applications. “Kenneth C. Laudon & Jane P. Laudon.
Today in this portion, we will certainly discuss about the SME services of three different banks that operate inside our country.
1) BRAC Lender:
BRAC Bank, staying the most youthful bank, took a step to be able to away from usual tradition and tapped in to the true suburb entrepreneurial projects. Today, with over 14, 500 crores of loans disbursed until date, BRAC Bank can be country’s major SME financier that has built more than 320, 000 dreams come true.
SME Products of BRAC Traditional bank:
Term of Traditional bank
Bank loan size
Any institution can wide open this bank account in the name of the Institution Opening balance only BDT. 12, 000. 00 & BDT. 5000
From BDT 3 lac to BDT 9. 5 lac
From lowest BDT three or more lac up to maximum of BDT 9. 5 lac
Minimum of five lac to maximum of 35 lac BDT
Starting from BDT almost 8 lac to maximum of BDT 30 lac
Minimal BDT three or more lac to maximum BDT 30 lac
Minimum of 3 lac to maximum of 30 lac
Anonno Rin: This is a tiny scale financial loan designed to fund small scale trading, manufacturing and service projects, especially to help the purchase of fixed property and to financing working capital. Eligibility
Entrepreneurs older between 18 to 6 decades
Entrepreneurs with minimum a couple of years experience inside the same profession
A business which must be a going-concern exceeding 1 year functioning Maximum Volume
From minimal BDT 3 lac about maximum of BDT 8 lac Features
Loan without home loan
For exceptional borrowers who may have paid or perhaps paying in due instances, we offer reduced rates
Speedy, quality financial throughout the country
Potential females entrepreneurs will even get the establishments of this financial loan
Apurbo Rin: In order to support our SME borrowers for financing working capital or to purchase fixed possessions, BRAC Bank offers APURBO. It answers the needs of entrepreneurs who are operating in trading, manufacturing, service, agriculture, nonfarm activities, agro- based industrial sectors and other industries of our economy. Eligibility
Internet marketers having a minimum of 3 years of some organization activities
A company which has to be a heading concern to get 3 years
Era minimum more than 20 years and maximum up to 60 years Maximum Volume
Starting from BDT 8 lac to more BDT 40 lac Features
Without home loan below 15 lac
Straightforward loan finalizing for growing your business
Payment in one or maybe more installment
Flexible monthly repayment loan
Pathshala Rin: This really is a loan created to meet the needs of small and medium sized private language schools, such as kindergartens, schools and colleges and so forth Eligibility
A little & moderate educational commence that is functioning for lowest 3 years
The institution ought to be sole proprietorship, partnership, personal limited organization or society
The educational company must be money making concern
Minimum BDT 3 lac to maximum BDT 40 lac
Without mortgage loan for loan below 15 lac
Laon for fixed assets purchase & civil construction
Loan repayment could be spread up to 4 years
Monthly repayment loan
Adaptable interest rate based upon security Aroggo Rin: This loan is appropricate for private treatment centers, diagnostics centers and doctors’ chambers to purchase fixed property under equated monthly installments. Membership
Institutions with at least 2 years functioning & profit making concern
Doctors having 5 a lot of experience Optimum Amount
Minimum of three or more lac to maximum of 31 lac
Loan with out mortgage up to 8 lac
Easy financial loan processing
Bank loan repayment timetable is distributed up to three years
1% loan processing charge
Flexible interest based on reliability
Digoon Rin: It is a loan facility to get Small and Channel enterprise. This kind of product’s main objective is to help different Small and Channel entrepreneurs in order to meet their short-study cash flow shortages or bridge the fund-flow gaps. Eligibility
Entrepreneur having minimum a couple of years of organization activities
this individual business which in turn must be going concern for 2 years
Old between 18 years to 55 years Optimum Amount
Minimum of 5 lac to maximum of 30 lac BDT Features
Double quantity of bank loan on your first deposit
Attractive return against the deposit
Flexible repayment plan month-to-month installment and single payments
Highlights of SME Bank Division of BRAC Bank
Number of Product offices 429
Volume of Staff two, 104
No of Loan disbanded (cumulative) 202, 101
Cumulative Payment (in million BDT) 84, 170. 23
Number of excellent Account a hundred and twenty, 685
Portfolio in amount (in million BDT) 32, 996. 18
Amount of Deposit (in million BDT) 3, 352. 6
No of SME Sales & assistance Center 31
Sector wise Distribution of SMEs
2) Dhaka Traditional bank Ltd:
As inception, the Dhaka Financial institution has kept socio-economic advancement in excessive esteem and was among the first to recognize the potentials of SMEs.
Dhaka Bank’s Engagement:
Recognizing the SME segment’s value upgrades and employment generation capacities quite early on, the Bank features pioneered SME financing in Bangladesh in 2003, concentrating on stimulating the manufacturing sector and positively promoting trading and service businesses.
Account of a powerful Branch in SME Funding:
The Bank started branch functions at Belkuchi Sirajgonj in April the year 2003. Prior to the Bank’s intervention, the weaving community did not have financial power to inventory their products until “Eid ul Fitr when the annual deal takes place. Investors were taking advantage to the situation by purchasing up complete productions at low prices and liquidating stocks just before “Eid. With financial services from Dhaka Bank Limited, the weavers have transformed into power harnesses, significantly increased profitability and reduced the involvement of middlemen. The lender is now taking care of institutionalizing the learnings and applying them in other areas across Bangladesh, particularly in textiles, light engineering and other manufacturing clusters. Already it includes identified many clusters and is also working on enhancing access to financing within these clusters.
Knowledge & Learnings
A problem behind the lower end of the SME sector of Dhaka Financial institution is that it can be unable to understand fully its requires. Even if these needs will be understood
they are rarely met with the right product mixture. Small business owners are unable to provide banking companies with necessary information in the right type and quality. It has created a space between the debtor and the banking companies and provides served to limit the outreach of SME lending options. In order to get over this obstacle, Dhaka Traditional bank SME Device provides extensive support to prospective clients in evaluating their business and preparing the mandatory documents in acceptable platforms. In this regard, the Dhaka Lender SME Product has been working in close cooperation with the USAID, the Southern region Asia Business Development Facility (SEDF) a major international Finance Firm (IFC) handled multidonor facility and the World Bank. The lender has recently been provided technological assistance by the World Bank and is likewise working with various other development organizations and contributor for ongoing improvements in the products and services it includes.
SME Ventures of Dhaka Bank:
All SME businesses where key workers have a couple of years experience inside the line of business. Adequate credit report
Method of Evaluation
The clients organization experience, knowledge, business amounts and month-to-month cash flow are being used in the assessment process. Margins (indicative)
The quality of receivables would be of importance in repairing margins up to which seed money is made offered. Tenor
Maximum twelve months (renewable)
Risk structured pricing technique, in line with the industry rates.
¢ Charge on the products on hand and receivables.
¢ Charge in other current assets
¢ Personal guarantee of proprietor /partners/ directors. ¢ Charge upon fixed
¢ Guarantee security on a case-to-case basis.
Set Rate, commonly for twelve months.
Facility terms & pricing are both reviewed in least annually Processing cost
Control fee of 1% is generally charged on small financial loans. Actual fee charged is determined on a case-to-case basis.
3) Mercantile Traditional bank Ltd:
Cargo Bank Limited provides Small , and Medium Organization (SME) bank loan facilities to experienced and inexperienced internet marketers located in the urban and sub-urban areas to motivate new and educated young entrepreneurs to undertake productive projects, to assist these to take part in the economic activities. A special credit scheme as and style “Small and Channel Enterprise (SME) Scheme continues to be introduced to lengthen credit services to the small , and medium business people of the nation. It’s SME products happen to be:
CHAKA (Term Loan).
ANANYA (Women Entrepreneur’s Loan).
CHALTI MULDHAN (Continuous Loan).
SINGLE REPAYMENT LOAN (Short Term Periodic Loan)
ONE PAYMENT FINANCIAL LOAN
Tk 0. 40 -50. 00 lac pertaining to SE
Tk zero. 50 -50. 00 lac for APRENDÍ
Tk 0. 50 -50. 00 lac to get SE
Tk zero. 50 -50. 00 lac for SONY ERICSSON & ME
Tk zero. 50 -500. 00 lac for ME
Tk 0. 40 -500. 00 lac to me
SE & ME
SE & ME
SE & ME
1 ” 5 years
you ” a few years
Maximum 9 months
Optimum 6 months
Maximum six months for term loan
13%-15% p. a applicable as per function of financing.
10% p. a
13% p. a
15% p. a
1 % higher upon overdue quantity
1 % higher over the typical rate on overdue amount.
2 % higher on overdue amount.
1 % larger on overdue amount.
EMI or perhaps at lum sum in or just before expiry while applicable
EMI or perhaps at lum sum on or before expiry while applicable
At lum sum on or prior to expiry
At lum sum about or prior to expiry
PG, Cheques plus others as appropriate
PG, Cheques as well as others as applicable
PG, Cheques plus others as appropriate
PG, Cheques additionally others because applicable
ÙSME = Small & Medium Enterprise
ÙEMI=Equal Monthly Installment
Ù PG = Personal Guarantee
Repayment of Bank loan:
1 . Term Loan: Maximum 60 obligations.
installment payments on your Working Capital: Optimum 12 obligations, 40% with the loan volume should be reclaimed within initial 6 months and remaining 60 per cent should be reclaimed within following 6 months. By maturity the money will be totally adjusted. After repayment of 75% of the loan the client may make an application for new credit facility.
Choice of Borrower:
1 . Small and method enterprise financing, like additional credit features must be controlled by the Bank’s management procedure setup with this particular organization. The process can include, identifying method to obtain repayment and assessing customer’s ability to pay off, expected long term cash runs, his/her past dealings with the bank, the internet worth and information from CIB. The financial institution must discover the key individuals of their consumers business, the important thing risks for their business.
2 . At the time of sanctioning facility below various ways of SME financing, a written assertion shall be extracted from the lender disclosing detailsof various facilities already obtained from other establishments to ensure that the overall exposure with regards to the repayment capacity of the customer does not exceed the reasonable restrictions as laid down in the approved guidelines of the bank as well as to support avoid coverage having multiple facilities. several. Age limit: The age of the proprietor as well as partners as well as directors need to range among 21 years to 60 years.
Fees and Charges of SME Auto financing:
1 . Interest: 15% (for women entrepreneur 10%)
2 . Risk Fund: 1%
a few. Service fee: 1%
4. Application Fee: Tk. 200. 00
five. Loan Processing Fee: Tk. 500. 00
Limit intended for Loan:
Optimum Limit for small businesses is Tk. 20. 00 lac (Term loan and Working Capital) and Channel Enterprises is usually Tk. 55. 00 lac (Term Bank loan and Working Capital).
ATM Booth and SME Support Centre:
The bank serves absolutely free themes by providing ATM Booth and SME Services Centre facilities. A number of CREDIT Booths and SME Service centers have been unlocked at different commercially significant locations of the nation to serve the customers, to save their period, consequently, to make them totally free of hassle. Concentrate on Segments to get SME Funding:
1 . Hospitals and Treatment centers
installment payments on your It related business
3. Gardening and Agricultural
4. Sportfishing and doing some fishing business
5. Travel and Conversation
6th. Forestry and furniture
7. Construction business and housing creation
eight. Leather marketing and leather products
being unfaithful. Knitwear and ready made apparel
15. Plastic and other synthetics
13. Resort and travel and leisure
18. Warehouse and container services
12-15. Printing and packaging
16. Gunning and Bailing
17. Pathological Laboratories
18. Cold Storage area
19. Horticulture- Flower growing and Marketing
20. Food and olive oil processing plant life
21. Higher education and expertise
several. 22. Collection of SME Loan
% of total payment
forty-four, 584, 784
a few. 05%
57, 562, 928
780, 719, 288
882, 867, 000
From this previously mentioned diagram we could say that, of SME bank loan mercantile traditional bank give even more preference in trading sector but they can easily finance above manufacturing and service sector to increase service and Manufacturing sector. Manufacturing sector is very important for the country to further improve economic progress and as well while service era and generate employment.
Result and Discussion:
In this portion, we can make a comparison with the SME activities of the 3 selected banking companies as shown below:
Comparison analysis of SME loans of three different banking companies
The banks to get comparative research have been chosen in the basis of the following requirements: * Bank loan Size:
BRAC Lender Limited
Dhaka Bank Limited
Mercantile financial institution Limited
3lac ” 30 lac
one particular lac- 55 lac
2lac ” 40 lac
Among the banks, Cargo bank offers the highest loan amount to customer where as BRAC Bank offers the lowest financial loan to it is customer.
* Rate of Interest:
BRAC Financial institution Limited
Dhaka Bank Limited
Mercantile traditional bank Limited
Regarding interest rate, Mercantile bank and BRAC financial institution offer the decrease rate of interest to its clients. The highest price is charged by Dhaka bank limited.
* Loan Processing Charge:
BRAC Bank Limited
Dhaka Traditional bank Limited
Cargo bank Limited
zero. 50% in the loan sum
TK five-hundred. 00
The BRAC Traditional bank limited simply charges. 50 percent as bank loan processing and Mercantile Bank charges TK. 500 to get loan finalizing.
* Period of loan:
BRAC Traditional bank Limited
Dhaka Bank Limited
Mercantile financial institution Limited
1 year to three years
1 year to three years
Upto 2-5 years
Among the banks, the highest financial loan maturity particular date is offered simply by Mercantile traditional bank Limited.
2. Mode of Finance:
BRAC Bank Limited
Dhaka Bank Limited
Mercantile lender Limited
Only Term loan
Term bank loan and working capital loan
Only Term bank loan
All the banking institutions provide SME financing features but do not provide long-term loan to its buyers. Among the banking institutions Dhaka bank provides both term loan and seed money loan for their customer. Different banks present only term loan to its consumers.
Portfolio size of different banking companies in SME sector:
name of Bank
BRAC Bank Limited
Dhaka Lender Limited
Mercantile Bank Limited
of sixteen. 38
From the table we can see that BRAC bank gets the highest expense in the SME sector.
General Comparison of three banks
BRAC Bank Limited
Dhaka Traditional bank Limited
Mercantile Bank Limited
Rate of interest
15% p. a
17% g. a
15% p. a
Bank loan processing cost
. 50% with the loan amount
Risk pay for
1%-2% of loan amount
1%of loan amount
1%-2% of mortgage amount
1%of loan sum
1 . 5% quarterly
Period of bank loan
1yr ” 3 year
1yr ” 3 yr
Upto 2-5 yrs
Mode of finance
Just term loan
Term loan and working capital
Upto 8 lac collateral free & above 8 lac collateral is usually mandatory Upto 5 lac collateral free(case to circumstance above a few lac and collateral obligatory )
Above 10. 00 Lac Collateral security mandatory
Table: Comparative analysis of SME mortgage of different lender:
Comparative overall performance analysis of SME financial loan of different banking institutions:
BRAC Bank Limited
Dhaka Bank Limited
Cargo Bank Limited
Year of operation
Rate of recover
From the above examination and studies of the examine, it is apparent that there is a whole lot of market potential for Mercantile Bank Limited in SME loan. Even as we came to find out from the research that BRAC bank is considered the most dominant gamer in the market and except BRAC bank different players will be more or significantly less similar category. But because the market brings a high development potential and BRAC financial institution having simple infrastructure and a larger customer base it is very challenging for the other financial institution to cope with BRAC bank unless they build some alliances to develop this kind of infrastructure to serve the customer at better service. In the beginning, it will require a massive concentration, however the bank is usually financially sound to fees such sum of investment in new line of business. Besides the expenditure Mercantile Financial institution Limited ought to improve their credit rating facilities, customer satisfaction, and add attractive features for the product to attract every course of people.
Taking into consideration the existing scenario, the following recommendations are submit for present and foreseeable future sustainability in the Management Data Systems in the SME sectors of Bangladesh:
* The current computer technology should be applied appropriately to develop the Small & Medium Corporations of the region * Details systems designers, whether inside to the company or part of an outside organization should assure the technical quality of the MIS system and the ease of the user program. * Program designers must oversee the system style and implementation, assess the influence of the fresh system on the organization, and develop approaches to protect the device from maltreatment after it can be installed. * Small business owners and managers need to plan what sort of MIS devices to put into practice and to ensure that the actual data happen to be accurate and useful. 2. Selection, buy and application of the appropriate technology should be made certain that would allow production of goods of competitive quality and competitive selling price, maintaining optimum productivity, while environmentallynot harmful.
* People of our nation should be furnished with adequate education, training skill and technological knowledge of the field of MIS in order that they are unable to put into practice it inside the SME sector.
* Better and increased MIS establishments must be supplied in the SME sector
5. SME Loan sanctioning and disbursement method should be simple flexible getting considered the requirements of different classes of people.
* Bottlenecks or barriers needs to be removed through advanced stages in mode of disbursement, charge documents and approval process.
* Organization Power for sanctioning loans and developments can be elevated at branch level.
2. The use of MIS should be expanded to the country areas of each of our country.
* The Government from the country should certainly ensure use and setup of LOS technology in order to develop the SME sector
* More SME service centers should be added to totally take the good thing about the huge possible client segments.
In the conclusion, we can claim that, SME is among the most emerging sector to increase the clinical and technical capabilities of an organization. Even so such SMEs should be pre-loaded with better laptop facilities and implementation strategies like the MIS.
The options of using the appropriate Supervision Information Systems are not sufficient considering the small , and medium enterprises of our country. Many small , medium corporations are using this kind of technology, but the scopeis limited. It is hence very clear that MIS development should proceed hand in hand with micro enterprise development.
It can be interesting to observe that the conditions for small industry expansion that we get today, being at the tolerance of total globalization, are extremely much the same since observed several-decades ago. Despite the criticism and neglect of the SME sector on the grounds of inefficiency and nonoptimal make use of productive elements compared to bigger industries, SMEs are beginning being extolled for his or her greater reliance on labour-intensive development techniques, lower requirements of imported advices and better geographical dispersion.
So , appropriate initiatives needs to be taken in order to develop the flow of Management data system it the small and medium companies of our country.
1 . Laudon, K., & Laudon, J. (2010). “Management Information Systems- Managing the Digital Organization, 11th Release. Prentice Hall/CourseSmart, 12/30/2008. )
2 . Hossain, N. (1998), “Constraints to SME creation in Bangladesh), Jobs task, USAID 3. Meagher, S (1998), “Secured Finance for SMEs in Bangladesh, Careers project, USAID 4. Ahmed, Z. U. (1999), “Problems of Entry to Credit for Small and Channel Enterprises in Bangladesh, Jobs project, USAID 5. Baldwin, J. and Picot, G. (1994), “Employment Generation by simply Small Suppliers in Canadian Manufacturing Sector, Journal to get Small Business Economics 6. CPD (2003), “Industrial Policy, Privatization and SME, National Insurance plan Review Discussion board, Centre to get Policy Conversation, Bangladesh 7. SEAF (2004), “The Expansion Impact of Small and Channel Enterprises: Lessons Learned via SEAF Investment, Small Venture Assistance Pay for, Washington.
1 . http://www.answers.com/topic/management-information-system#ixzz1fXXQa1Ro 2 . www.bssrcbd.org/¦/BANGLADESH%20INSTITUTE%20OF%20MANAGEMEN. 3. www.sap.hokkyodai.ac.jp/otu/neelima-bangladesh.pdf
5. wiki. answers. com/¦/Separate_MIS_department_in_Bangladesh_and_their_activities 6. www.bangladeshstudent.com/showthread.php?p=3 ”
almost 8. www.sa-dhan.net/Adls/¦/MIS/MISIssueschallenges.pdf ”
9. www.univdhaka.edu/¦/facultymemberdetail.php?¦fmmis91025¦mis twelve. www.cacci.org.tw/Journal/¦/SMEs%20in%20Bangladesh.pdf
12. www.nextbillion.net/¦/bangladesh-bank-report-finds-smes-can-curb-poverty 13. wiki. answers. com/¦/Problems_of_SME_in_Bangladesh
12-15. www.tmcnet.com/¦/-bangladesh-sme-foundation¦/4135674.htm sixteen. www.wiki.answers.com/Q/What_are_the_barriers_of_implementing_MIS_inbangladesh seventeen. http://www.scribd.com/doc/53648930/BRAC-SME
18. http://www.scribd.com/doc/62738514/BRAC- Bank-Internee-Report 19. http://www.scribd.com/doc/16733174/Case-Study-on-SME-Banking 20. http://www.scribd.com/doc/16892284/Case-Study-on-SME-Banking-Dhaka-BANK
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