July 11, 2009

Monika Charkraborty
Department of Management
Faculty of Business Stadies
Jagannath Unuversity
Dhaka.

Re: Submission of Term paper.

Dear Madam,

Please accept the term paper entitled “SME loan in Bangladesh.” This is done for the partial
fulfillment of the requirement of ‘MGT 208: Entrepreneurship and Small Business Management’
course.
Your kind approval and suggestions to this report will be highly appreciated.

Sincerely,

Shamol Chandra Sen

Abdulla-Al-Monir

Mahboob-Al-Rashid

Maksuda Akter

Rashedul Hasan
 Acknowledgement

First of all we like to thank to the almighty Allah, Who creates me and help me to do

this assignment. we like to thank my course teacher Monika Chokraboty to give me

the opportunities of doing the assignment on Entrepreneurship (SME loan) with his

kind information, suggestion & guidance. we like to special thank to Mr. Abdulla-Al-

Kawsar Personnel executive of Commercial Bank of Ceylon PLC. we can also very

thankful to my classmates who also contribute to complete this assignment.

We are grateful to my family and others.

Thank You
Contents Page No.

I. Abstract 1-1

II. Main Tex

Commercial Bank of Ceylon PLC 2-2

SME loan & Entrepreneur 2-2

SME loan and CBC 3-3

SME Loan Details 3-5

III. Conclusion 5-5

IV. Reference 6-6

V. Attachment

Questionnaire 8-8

Annual financial Report 9-13

Abstracts:

This paper is written from the perspective that the situation of entrepreneur to get the SME

loan from the private banking sector. SME is the most buzz word in Bangladesh corporate

culture. SME loan design for the entrepreneur but the procedures are varied from bank to

bank. Lending in SME sector helps the banks to derive higher spread over corporate ones.

Profit margin in corporate business houses is relatively getting lower due to stiff competition

in the market. They remain in the profit track increasing the sales volume only, having the

advantage of big investment.

It is turf work to work with all private banks as we select Commercial Bank of Ceylon PLC

Bangladesh who very recently start SME loan. To know about their banking we visit their

main corporate branch at Dilkhusha, Dhaka. In there, we know about their new product of

SME loan, procedure, legal requirement etc. To do this we use some structure

questionnaire. In this paper we also concern about the legal steps of failure EMI.
Main Tex:

i. Commercial Bank of Ceylon PLC:

With an unblemished history of nearly a century in the Sri Lanka's Banking arena,
Commercial Bank has been rated as the Best Bank in
th
Sri Lanka for the 11 successive year by Global
Finance magazine - New York and as Bank of the Year
Sri Lanka by The Banker magazine - UK for seven
years. Equipped with modern technology and a unique
versatility as an efficient service provider, the Bank’s
mission is to 'Redefine convenience in financial services'.

Over the period of last 5 years of operation in Bangladesh, CBC has expanded its branch
network to 7 branches, 2 booths, 2 specialised OBU sections in Dhaka(Dhanmondi) and
Chittagong(CEPZ) and 2 SME centres in Bangsal Road(Dhaka) and Jubilee
Road(Chittagong). Unique products and services, superior service quality and efficient and
customised solutions to the requirements of corporate and personal banking customers are
hallmarks of the successful stride of CBC in Bangladesh.

ii. SME loan & Entrepreneur:

 Though SME concept is nothing new, as evident from the establishment of
Bangladesh Small and Cottage Industries Corporation (BSCIC), but a fresh look into and
Endeavour to boosting the sector are still imperative. Bangladesh Bank re-finance scheme
for SME is laudable. The role of IFC-SEDF for creating awareness among the entrepreneurs
and banks/NBFIs to be more focused in SME deserve appreciation.

SME means Small and medium enterprises (also SMEs, small and medium
businesses, SMBs, and variations thereof) are companies whose employees and capital are
certain limit. Entrepreneur means innovates or invents something either developing new
products and services or change the process of existing product using new ways.

In the view of bank SME means different. Commercial bank of Ceylon PLC (CBC)
define entrepreneur for SME loan as the individuals who have account on this bank only and
who have outstanding performance in this sector existingly.

The new account holder (only this bank) evaluate as new entrepreneur and existing
account holder (also other bank account) evaluate as old entrepreneur.

iii. SME loan and CBC:

Commercial Bank of Ceylon (CBC) launched its SME (small and medium
entrepreneur) loan product under the brand name of 'Probriddhi' in May 2009. ‘Probriddhi' is
a medium term loan, applicable to the SME customers to meet their capital need for starting
or expansion of their business, in line with the criteria set for the facility. The loan is offered
with many attractive features, with an assurance of fast and easy processing so that the
customers can get maximum benefit from the capital provided.

SMEs are at the core of our economic development and many FIs( Financial institute) and
NBFIs( Non-Bank Financial Institutes) are coming up with SME specific products. BRAC bank
is very visible on the SME front, so is Eastern Bank we guess. Now CBC joins the party.
iv. SME Loan Details:

Commercial Bank of Ceylon PLC maintains some common and special feature for
SME loan. CBC has only one types of SME loan that is 'Probriddhi' although the most of
bank have many. According to CBC the SME procedures are describe below.

Account:

The entrepreneur must have an account on this bank. Minimum account

requirements are-

■ Must be 18 years old

■ Two passport size recant photos.

■ Nominee

■ Reference of account.

Processing Fee of Loan:

■ Fill up the application

■ 1% of processing fee on total amount of loan.

Interest of Loan:

■ Interst only 14% annually.

Tenure of Loan:

■ Generally 5 years.
 ■ Extended for application.

EMI:

■ Each Month Interest

■ 60 EMI.

Security:

■ No special security money.

■ Concern with reference.

■ Optional of security money.

Loan Range:

■ Maintain Bangladesh Bank criteria.

■ Up to 200% of the fixed deposit held with the CBC

■ subject to a minimum of BDT 2 lacs and maximum of BDT 2

crore.

■ Loan rang is 50000-20000000.

Required Document:

■ Trade License

■ TIN certificate

■ CIB (Central information Breure of Bangladesh Bank)

 Failure of Paying Loan:

■ For failure of paying loan, bank give two notice.

■ If individuals failure after second notice, bank send third

notice final notice.

■ After third notice, bank gives CIB objection.

■ BB (Bangladesh Bank) takes necessary steps.

As CBC start SME loan in this year, although the annual

report of the bank attach for showing growth of this bank and
also attach the questionnaire. Particularly say, about their loan
power.

In CBC with Mr. Kawsar

Conclusion:

The traditional attitude of the bankers to earn more profit shall have to be changed
to contribute to economic development of the country promoting SME. The government may
also help motivate the bankers to change their attitude from corporate to SME customers
allowing tax rebate for financing in SME sectors.
 Though, Bangladesh Small and Cottage Industries Corporation (BSCIC) has been
established long back to promote small and cottage industries of the country, but could not
be made so effective, rather the organization is now on the verge of closure. Since BSCIC
has wide network all over the country with established set up, it may be well integrated with
today's SME concept to start the journey of industrialization afresh and so to save both time
and money in the process.

References:
● Entrepreneurship & small Business Management, N. Siropolis

● Entrepreneurship small Business & Lives of Sucessful Entrepreneurs. A.R.Khan

● Entrepreneurship & small Business Management, Mosharaf, Bedar, Attaur

● Entrepreneurship & small Business Managemen, Mizanur Rahman.

● Annual Report of CBC

External Links:

● www.combank.net

● www.wikipedia.org

● www.corporateblog.com

● www.dailystar.net

● www.marketilebank.com

● google.search

● bing

● www.hugebookonline.com
1. Processing loan fee.
2. Interest rate of loan.

3. EMI

4. Experience / Trade license

5. Tenure of loan.

6. In case of failure of return the loan, what actions are taken.

7. Security money or other criteria.

8. Required Document.