Research Proposal

On

Credit facilities to the agricultural sector

(From the viewpoint of a private commercial
bank)

Submitted to
Mahfuzul Hoque
Associate professor,
Department of Accounting & Information systems,
University of Dhaka.

Submitted by
(Group 7)
MBA 9th Batch
Department of Accounting & Information Systems
University of Dhaka.
 Date of Submission: 21/10/2008.

Name of the Group Members

Name ID
Abdul Alim Baser 9097
S.M. Abdus Shakur 9100
Kazi Tahiti Samina 9124
Ihsan Saleheen 9140
A.S.M. Moynul Morshad 9263

Department of Accounting and Information Systems,

University of Dhaka.
 Introduction
Bangladesh is an agricultural country. Its contribution to the GDP in the year 2006-07 fiscal was
21.11% at constant prices. Though direct contribution has been reduced (from 21.84% in 2005-
2006 to 21.11%) but it has indirect contribution to the overall GDP growth. Moreover, to lessen
the inequality between the rural and urban from the perspective of overall development, it helps a
lot as almost 52% of our labor force is engaged in agriculture and agriculture related activities,
that may be farm or non-farm activity. In the fiscal year 2005-06, total export of agro-products
was amounted to $772.7 million; this amounted to 7.34% of the total export earnings. In the year
2005-06, total irrigated land was 5409659 hectors and more cultivable land is being taken under
cultivation, to fight with the increasing hungry faces as the result of population explosion and
world food crisis due to price hike. So, the support of every kind that may be financial and non-
financial is of greater importance to this sector.
 Rationale of the research
For the proper development a country has to stand on two legs, not one i.e. both on agriculture
and industry. Without feeding the hungry faces development is like building castle in the air. To
solve this, we have to strengthen our agriculture in a bid to strengthen food security. For this
reasons, though over the years has been a alien to the agriculture sector, private commercial
banks are now encouraged or in same cases being pressured to extend its credit facilities
(banking products) to the agriculture sector. But since these are “private” banks, they have to
earn some profit. Here lies the main issue. So, the research attempted to find out-

• The market size of the products

• The probable return of its investments
• The attractiveness of the products.

The above purposes are fully from private angle. The social angle purposes may be-

 To find out the greater employment opportunity

 To fulfill the corporate social responsibility.

How the study will be done

The study will be done by both field survey and secondary data analysis. A particular area of a
thana will be a test case. These survey will be conducted among 100 farmers, which includes
landless, marginal, having own land. They will be interviewed for some questions enclosed here
after (Questions enclosed here with). Secondary data will be provided the information about the
size of the market; it will also help to design the products.

How data will be gathered

To find out the relevant and reliable information, data will be gathered, for surveys by the field
workers and for the secondary data, from the publications by the Bangladesh Bureau of statistics
(BBS), Finance Ministry, Ministry of Agriculture and Bangladesh Bank.

Procedure of producing information

 Data found by the test case will be aligned with the secondary data to find out the information.
Special recommendations by the specialist will also be considered here.

Communication of the information

Information will be communicated through a written report to the upper level management. Here
also a presentation session will be held to make it more informative and effective.

Budget and time schedule

The time required for the study will require at least 2 months. The probable expenditures related
to the study

Entertainment 2000 Tk
Honorarium to a respected local 1000
Conveyance 1500
Hotel rental 1000
Miscellaneous 500
Total Survey expenses 6000 Tk
Purchase of publication 2000
Honorarium to specialist 2000
Telephone expenses 500
Supplies expenses 1000
Printing expenses 1000
Others 500
Total 13000 Tk
 Appendix

Questions that will be asked will be but not confined to –

1. Do you think loan will help you to do your activities at an eased way?
 Yes
 No
 To some extent

2. How much land do you have?

 1 acre
 More than 1 acre
 Less than 1 acre

3. How many crops do you cultivate in your land?

 3 crops
 2 crops
 1 crop

4. What is the production rate per acre (paddy)?

 1500 kg
 Less than 1500 kg
 More than 1500 kg

5. Which crop is more profitable?

 Paddy
 Vegetables
 Others

6. In which season do you need more money?

 During paddy production
 During other time

7. How you finance your cost of production?

 Own capital
 Borrowed capital

8. How much time you required to pay the loan?

 6 months
  More than 6 months
 Less than 6 months

9. Can you fully repay your loan (percentage of total)?

 90%
 80%
 Below 80%

10. What sort of loan do you want?

 Collateral fee
 Collateralized

11. What is important to you in case of loan?

 Time
 Interest rate
 Amount

12. How much interest rate do you expect?

..............................

13. Will you insurance your crops?

 Yes
 No

14. How much premium will you be able to pay?

 100 Tk monthly
 More than 100 Tk
 Less than 100 Tk

15. What is the minimum amount of loan you want to get?

 5000 Tk
 More than 5000 Tk
 Less than 5000 Tk
 Bibliography
(1) Bangladesh Bureau of Statistics (BBS)
(2) Bangladesh Economic Review (2007)
(3) Different publications