2. SME investment activities & disbursement
process : A comparative study on SME
activities of EXIM Bank of Bangladesh Ltd.
2
3. The aim of our presentation is to provide a clear
idea about the SME investment procedures of EXIM
Bank Limited and their position in SME banking
among the competitors.
3
4. Introductory Part
◦ Introduction
◦ Objectives of the report
◦ Scope of the study
◦ Limitation of the study
Organizational Part
◦ Organizational overview
◦ Mission, Vision & Objectives
◦ Management of EXIM Bank Limited
◦ Organizational structure
◦ EXIM Bank subsidiaries
◦ Products & services
◦ Financial Performances of EXIM Bank Ltd.
Actual Task Part
o Job Part
◦ Definition of SME as per Bangladesh Bank
◦ SME history of EXIM Bank Ltd.
◦ Importance of SME
◦ Types of SME Investment
◦ Terms & Condition of SME Loan
◦ Procedures of SME Loan
◦ SME Investment process Flow chart
◦ Disbursement of SME Investment
◦ Sector-wise SME Distribution
4
5. ◦ Analysis of SME Credit Scheme of Five
Different Banks currently Available in
Bangladesh
◦ Financial Aspects
◦ RATIO
◦ Summary of Findings & Analysis,
Financial Aspects
Research Part
o Material
◦ Hypothesis Development
◦ Hypotheses Testing
◦ Graphical representation
◦ Findings
◦ Recommandation
◦ Conclusion
5
7. Broad Objective
1. How EXIM Bank Ltd operates SME banking operation around the country through
its network.
2. To review the SME banking of Bangladesh.
Specific Objectives
◦ To analyze the SME investment processing activities.
◦ To know the disbursement and recovery procedures of SME investment.
◦ To know the enterprise selection criteria to provide SME investment.
◦ To know the terms and conditions of SME investment.
◦ To conduct a comparative analysis of SME banking in EXIM Bank and four other
private commercial banks.
7
8. ◦ Concept of SME and its impact in overall economy of Bangladesh.
◦ Importance of SME banking in context of Bangladesh.
◦ Entrepreneurship development situation through SME banking.
◦ Small entrepreneurs of rural – urban spectrum are enjoying the EXIM Bank
investment facility without the presence of bank at rural area.
◦ The report focuses on the comparative analysis of SME Banking of EXIM Bank with
four other private commercial banks.
◦ Data from EXIM Bank is highly confidential for the outside people and we had no
authority to use the core banking software.
◦ As the duration of the internship program is three months and the process of this
program is job rotation, so we didn’t get sufficient time in each department to
understand their activities.
◦ Since the bank personals where very busy, they could provide us little time.
◦ Banking sector is a very vast sector where we have a little knowledge about it which
limits our report.
8
11. ◦ EXIM Bank was established under the leadership of Late Mr. Shahjahan
Kabir .
◦ The bank starts functioning from 03 August, 1999 with its name as Bengal
Export Import Bank Limited.
◦ On 16 November, 1999 it was renamed as Export Import of Bangladesh
Limited.
◦ EXIM Bank's footprint has grown to 80 branches.
◦ EXIM Bank provides necessary funds for executing various programs in the
process of economic development.
11
12. Mission
To be the most caring and customer friendly and service oriented bank.
To create a technology based most efficient banking environment for its customer.
To ensure ethics and transparency in all levels.
To ensure sustainable growth and establish full value of the honorable shareholders.
Vision
◦ Believes in togetherness with its customers.
◦ To achieve the desired goal, there will be pursuit of excellence at all stages.
◦ Bank’s strategic plans and networking will strengthen its competitive environment.
12
13. Objectives
◦ Building a strong customer focus and relationship based on integrity, superior
service.
◦ To provide high quality financial services.
◦ To perform social responsibility for a happy future.
◦ To encourage the new entrepreneurs for investment and thus to develop the
country’s industry sector and contribute to the economic development.
13
14. Mr. Md. Nazrul Islam Mazumder Chairman
Mr. Md. Abdul Mannan Director
Mr. Md. Nazrul Islam Swapan Director
Mr. Mohammad Abdullah Director
Mrs. Nasreen Islam Director
Mr. Mohammed Shahidullah Director
Mr. Md. Nurul Amin Director
Mr. Mohammad Omar Farooque Bhuiyan Director
Mr. Anjan Kumar Saha Director
Mr. Muhammad Sekandar Khan Director
Mr. Khandakar Mohammed Saiful Alam Director
Mr. Md. Habib Ullah Director
Major Khandaker Nural Afser (Retd) Director
Lt Col (Retd) Serajul Islam Director
Mr. Ranjan Chowdhury Director
Dr. Mohammed Haider Ali Miah Managing Director 14
15. 15
Management Hierarchy
Organization Structure
Chairman
Board of Directors
Managing Director
Deputy Managing Director
Executive Vice President
Senior Vice President
Trainee Officer
Vice President
Senior Assistant Vice President
Assistant Vice President
Senior Principal Officer
Principal Officer
Executive Officer
Management Trainee Officer
Junior Officer
Assistant Officer
20. Internship Experience
◦ We got the opportunity to work as an intern in the Garib-e-Newaz branch of EXIM
Bank Ltd and the duration of our internship was 11th September to 11th December
2014.
Experience Regarding Personal Improvement
◦ Time management
◦ Formal dress code
Practical Working Experience
20
21. Duties and Responsibilities
◦ Update information of SME & Account opening files in checklist.
◦ Update information of these files in central database using “T-24” a software that is currently
EXIMBL using.
◦ Finally used to update these data in net server and used to make report to project manager at the
end of work.
Specification Contributions
◦ We have updated and made report of approximate 5,000 files.
◦ We have given different ideas which helped our project manager to continue the project in right
fashion which saved time and labor as well.
◦ Being a responsible member of the project we have saved for EXIM Bank Ltd. by finding an
important SME investment file from archive of EXIM Bank limited.
21
22. Organizations not a public limited company meet the following criteria:
22
Enterprise Criteria Trading/Services Manufacturing
Small Enterprise Number of Staff
(Not More than)
25 50
Fixed Asset
(Except Land &
building)
BDT 50 Thousand –
BDT 50 Lac
BDT 50 thousand –
BDT 1.5 Crore
Medium Enterprise Number of Staff
(Not more than)
50 150
Fixed Asset
(Except Land &
building)
BDT 50 Lac – BDT 1
Crore
BDT 1.5 Crore –
BDT 20 Crore
23. ◦ EXIM Bank Ltd. has successfully made a mark in creating platform for small and
medium entrepreneur.
◦ Discharging over 7,000 crore taka in SME loan and helping fulfillment of more
than thousand dreams that change hundreds and thousands of lives every day.
◦ The bank has incorporated double bottom line approach in its operation –
1) Making profit by mobilizing fund from urban to rural areas.
2) Performing social responsibility by creating an entrepreneurial class.
23
25. 1. UDDYOG SME Investment
UDDYOG is a business investment scheme which starts from BDT 2 Lac to10 Lac to meet any
kind of business needs.
◦ Easy installment.
◦ Investment processing is Easy.
Eligibility
◦ At least 2 or more years has been working and any kind of business having valid trade license
◦ Sole proprietorship or Partnership
◦ Small sized businesses (Production, Trading, Service, Agro based products and others)
◦ Expertise of entrepreneur
25
26. 2. ABALAMBON SME Loan
ABALAMBAN is a small scaled business investment scheme for operating and extending small
and medium level business and industries.
◦ Facility of repayment at a time or installments according to the return of business
◦ As low as 10% interest rate
◦ Provide investment facility in a easiest way
Eligibility
◦ At least 3 years has been working and any kind of business having valid trade license.
◦ Those who have land/building/property.
◦ Expertise of entrepreneur
◦ Annual transaction and income
26
27. ◦ The prospective borrowers and enterprises have to fulfill the selection criteria
◦ The investment amount is between Tk 2 lacs to 10 lacs.
Investment can be repaid in two ways:
a)In equal monthly investment installment with monthly interest payment, or
b)By one single payment at maturity, with interest repayable a quarter end
remaining on maturity
27
Investment Amount Investment Processing Fee
2 lacs to 2.99 lacs Tk 5000
3 lacs to 5 lacs Tk 7500
5.01 lacs to 10lacs Tk 10000
30. a) Pre Disbursement Manual Activities
◦ Prepare investment file
◦ Charge documents checking
◦ Documents deficiency and problem resolving
◦ Prepare disbursement list
◦ Disbursement of the amount
Message sent to the unit office
MBS (Millennium Banking System) entries for
disbursement:
◦ Initial ID generation
◦ Investment account opening
◦ Cost center assign
Security details set-up
Guarantor details set-up
Loan other details set-up
◦ Risk fund collection
◦ Activision of the loan
Loan sanction details set-up
Repayment timetable set-up and printing
Loan activation
Disbursement and voucher print
Disbursement voucher posting
b) Post Disbursement Manual Activities
◦ Repayment schedule sent to unit office
◦ Investment details MBS entry
◦ Document stamp cancellation
◦ Send the investment file to archive
30
32. Details EXIM Bank Ltd AB Bank Ltd
Prime Bank
Ltd
Eastern Bank
Ltd
Dutch-Bangla
Bank Ltd
Bank Opening Year 1999 1984 1996 1992 1996
SME Operation Year 2008 1984 1999 2005 2008
SME Division Opening Year 2008 2008 2009 2005 2009
Number of SME Branch 65 74 17 8 124
Number of SME Service Centre 15 11 None 53 None
Number of SME Unit Offices None None None None None
Total Number of SME Touch Points 80 85 17 61 124
Number of SME Customers 2657 4300 4500 5700 6500
Total Number of SME Products 2 7 6 14 6
Number of SME Deposit Products None None None 3 None
Number of SME Investment Products 2 7 6 11 6
SME Investment Outstanding Tk.1031 crore Tk.3150 crore Tk.2100 crore Tk.2935 crore Tk.3500 crore
32
33. Details EXIM Bank Ltd. AB Bank Ltd. Prime Bank Ltd. Eastern Bank Ltd.
Dutch Bangla Bank
Ltd.
NP after tax
1,913,390,869 1,327,983,705 3,662,183,069 2,520,704,413 2,153,642,684
Revenue 23,614,710,000 12,830,837,754 16,736,821,063 9,713,139,461 9,980,301,489
Total Loans &
Advances
143,847,380,000 94,638,218,363 139,408,893,185 81,773,910,178 79,248,994,443
Total Deposit 165,725,529,225 116,151,864,140 159,815,720,972 75,535,746,703 100,711,010,944
Ratios
8.10 10.35 21.88 25.95 21.58
Profitability:
Net profit margin
ROA 1.06 0.87 2.03 2.14 1.75
Liquidity Ratio:
Cash ratio 0.15 0.15 0.09 0.13 0.15
Loans to Total Deposit 0.87 0.81 0.87 1.08 0.79
Loans to Total Asset 0.74 0.62 0.77 0.70 0.65
Asset Activity
Ratio:
Fixed Asset Turnover 7.42 3.33 4.21 2.18 2.51
Net Asset Turnover 0.12 0.08 0.09 0.08 0.08
33
39. Project’s Expenditures
Problem Statement
During our internship we worked specially SME investment of EXIM Bank
Limited. SME investment section is most important for any bank. Although the
performance of SME investment section of EXIMBL is good, however still some
problems are facing by the department. So, we want to find out it and want to
give some suggestions. And for this reason we are doing this research.
39
Particulars Cost (Taka)
Data Collection 800
Transportation 4000
Processing, Printing and Binding 1600
Total = 6400
40. 1. Data collection - a)Primary Data b)Secondary Data
2. Sample - The sample of this study is the all customers of EXIM Bank limited and some
valued clients.
3. Population - Sampling unit or population of our study is existing customers of EXIM Bank
Limited.
4. Sample size - The sample size of my survey is fifty (50) customers of EXIM Bank Limited.
Here, n = sample size = 50
5. Sampling Procedure - To accurately determine the probability, probability sampling is
selected and it is simple random sampling.
6. Analysis of data - Relevant data for this report has been collected primarily by direct
investigation of different records, papers, documents and different personnel.
40
41. With a view of fulfilling the objectives some relevant hypothesis have been
formulated for this study:
◦ HA: SME investment has positive effect on success of the bank.
◦ HA: SME investment has positive impact to increase on the level of EXIMBL’s
customer satisfaction.
◦ HA: EXIMBLs profit rate is more reasonable for SME investment.
◦ HA: EXIMBL provides SME to women entrepreneurs with easy condition.
◦ HA: EXIMBLs SME section uses proper system to meet the clients demand.
◦ HA: EXIMBLs executives are performing well in the SME investment section.
41
43. 1. H0: SME investment has negative effect on success of the bank.
HA: SME investment has positive effect on success of the bank.
H0 : µ= 2.5
HA : µ>2.5
n = 50
Here, = 4.04
= 1.20
Zcal = ( - µ)/ ( /√n) = 9.06
At 5% level of significance, follows Z- distribution 0.05 = 1.645
Since Zcal > Ztab the null hypothesis is not accepted. So at 5% level of
significance, it can be said that SME investment has positive effect on success
of the Bank.
43
Strongly
Disagree
4% Disagree
12%
Neither
Agree
Nor
disagree
10%
Agree
24%
Strongly
Agree
50%
H1
44. 2. H0: SME investment has no positive impact to increase on the level of EXIMBLs
customer satisfaction.
HA: SME investment has positive impact to increase on the level of EXIMBLs
customer satisfaction
H0 : µ= 2.5
HA : µ>2.5
n = 50
Here, = 3.88
= 1.19
Zcal = ( - µ)/ ( /√n) = 8.12
At 5% level of significance, follows Z -distribution 0.05 = 1.645
Since Zcal > Ztab the null hypothesis is not accepted. So at 5% level of significance, it can
be said SME investment has positive impact to increase on the level of EXIMBLs customer
satisfaction.
44
Strongly
Disagree
6%
Disagree
8% Neither
Agree
Nor
disagree
18%
Agree
28%
Strongly
Agree
40%
H2
45. 3. H0 : EXIMBL interest rate is not more reasonable for SME investment.
HA : EXIMBL interest rate is more reasonable for SME investment.
H0 : µ= 2.5
HA : µ> 2.5
n = 50
Here, = 3.24
= 1.49
Zcal = ( - µ)/ ( /√n) = 3.52
At 5% level of significance, follows Z distribution 0.05 =1.645
Since Zcal > Ztab the null hypothesis is not accepted. So at 5% level of
significance, it can be said EXIMBL interest rate is more reasonable for SME
investment.
45
Strongly
Disagree
16%
Disagree
24%
Neither
Agree
Nor
disagree
10%
Agree
20%
Strongly
Agree
30%
H3
46. 4. H0 : EXIMBL does not provide SME to women entrepreneurs with easy
condition.
HA : EXIMBL provides SME to women entrepreneurs with easy condition.
H0 : µ= 2.5
HA : µ> 2.5
n = 50
Here, = 3.68
= 1.29
Zcal = ( - µ)/ ( /√n) = 6.55
At 5% level of significance, follows Z distribution 0.05 =1.645
Since Zcal > Ztab the null hypothesis is not accepted. So at 5% level of
significance, it can be said that EXIMBL provides SME investment facility to
women entrepreneurs with easy condition .
46
Strongly
Disagree
6% Disagree
14%
Neither
Agree
Nor
disagree
26%Agree
14%
Strongly
Agree
40%
H4
47. 5. H0 : EXIMBL SME section does not use proper system to meet the clients demand.
HA : EXIMBL SME section uses proper system to meet the clients demand.
H0 : µ= 2.5
HA : µ>2.5
n = 50
Here, = 3.58
= 1.22
Zcal = ( - µ)/ ( /√n) = 6.35
At 5% level of significance, follows Z distribution 0.05 =1.645
Since Zcal > Ztab the null hypothesis is not accepted. So at 5% level of
significance, it can be said that EXIMBL SME section uses proper system to meet
the clients demand .
47
Strongly
Disagree
8%
Disagree
12%
Neither
Agree
Nor
disagree
20%
Agree
34%
Strongly
Agree
26%
H5
48. 6. H0 : EXIMBL executives are not performing well in the SME investment section
HA : EXIMBL executives are not performing well in the SME investment section.
H0 : µ= 2.5
HA : µ>2.5
n = 50
Here, = 3.56
= 1.27
Zcal = ( - µ)/ ( /√n) = 5.89
At 5% level of significance, follows Z distribution 0.05 =1.645
Since Zcal > Ztab the null hypothesis is not accepted. So at 5% level of
significance, it can be said that EXIMBL executives are performing well in the
SME investment section.
48
Strongly
Disagree
0%
Disagree
10%
Neither
Agree
Nor
disagree
16%
Agree
42%
Strongly
Agree
32%
H6
49. ◦ In hypothesis-1, Around 24% respondents have agreed and 50% respondents strongly agreed that to
achieve the success of EXIMBL, the SME investment plays a great role of banks profitability.
◦ In hypothesis-2, Around 28% respondents have agreed and 40% respondents strongly agreed that,
SME investment has positive impact to increase on the level of EXIMBLs customer satisfaction .
◦ In hypothesis-3, Around 20% respondents have agreed and 30% respondents strongly agreed
that EXIMBL interest rate is more reasonable for SME investment. In contrast 24% respondents
have disagreed.
◦ In hypothesis-4, Around 14% respondents have agreed and 40% respondents strongly agreed,
that EXIMBL provides SME to women entrepreneurs with easy condition.
◦ In hypothesis-5, Around 34% respondents have agreed and 26% respondents strongly agreed
that EXIMBL SME section uses proper system to meet the clients demand.
◦ In hypothesis-6, Around 40% respondents have agreed and 24% respondents strongly agreed
that EXIMBL executives are performing well in the SME investment section.
49
50. 1.To achieve the success of EXIMBL, the SME investment plays a great role of banks
profitability. So EXIMBL should more careful on SME Investment.
2. To increase the level of customer satisfaction the bank should provide incentives
SME products and imposed the reasonable interest rate.
3.From the customers feedback the EXIMBLs interest rate is more reasonable from
others because their goal is that less profit more customer. Even EXIMBL should
more careful on their interest rate because about 24% respondents have disagreed.
4.EXIMBL should focus on encouraging more women entrepreneurs for SME
investment. EXIMBL should also provide investment facility to women
entrepreneurs with easy provision continuously.
50
51. 5.EXIMBL has their IT departments. So for SME investments they are applying proper
system by using modern technologies like they are making on line CIB inquiry
against SME holders. Sometimes their network does not work properly in the
branch. So they should more careful about that.
6.The organizational success depends on their employees performances. The EXIMBL
executives providing the best performances in the SME investment sections. Even
EXIMBL should always monitor the performance of its employees.
51
