Presentation on

Analysis of Credit management of

LankaBangla Finance Ltd
 Presented by
S.M. Rasel
ID: 12132101576
Intake: 30
Department of Finance
Bangladesh University of Business and Technology
(BUBT)
Area Covered
Objectives of the Report
Methodology of the Report
Limitation of the Study
Profile of LankaBangla Finance Ltd
Theoretical Aspects
Analysis of Credit disbursement And Recovery
Procedure
Findings of the Study
Recommendations
Objectives
Broad Objective
Broad objective of this report is to analyze the Credit management of
LankaBangla Finance Ltd.

Specific Objectives
The specific objectives of the study are as follows:
To know the lending and recovery procedure of credit of LBFL.
To analyze the trend of loan over the years.
To analyze the industry and geographical wise loan and advances of LBFL.
To examine the credit recovery performance of LBFL,
Methodology
To analyze and to prepare the report I used several
software like Microsoft Word and Microsoft Excel. To
analyze the credit Performance of LBFL, I used trend
analysis.
Sources of Data
Primary sources:
Face to face conversation with the institutions officers and staffs.
Direct conversation with the client.
Study of different files of different section of the institution.
Practical deskwork.

Secondary sources:
Annual report of LankaBangla Finance Limited
Unpublished data from the organization
Different publications of LankaBangla Finance Limited
website.
LBFL Database
Limitations
The main constrain of the study was insufficiency of information, which
was required for the study. There is various information the company's
employee can't provide due to security and other corporate obligations.
Due to time limitation, many of the aspects could not be discussed in
the present report.
Learning all the functions within just 90 days is really tough.
Since the company's personnel were very busy, they could not provide
enough time.
Lack of opportunity to have conversation with higher authority.
Since I am not a professional researcher, the accuracy of the study may
not have been completely perfect.
Company Profile
Name : LankaBangla Finance Limited
Year of Establishment : 1996 as Vanik Bangladesh Limited
and renamed
LankaBangla Finance Limited in 2005
Type of Business : Joint Venture Company
Authorized Capital : TK. 1000.00 million
Paid Up Capital : TK. 442.00 million
Business Segment : Non Bank Financial service
Theoretical Aspects
Credit
Credit is the confidence of the lender on the ability and
willingness of the borrower to repay the debts at a future
date.
Loan
A loan is the act of giving money, property or other
material goods to another party in exchange for future
repayment of the principal amount along with interest.
Loan Classification
Classified

Unclassified

Sub-Standard : Overdue 6 months to 9 months

Doubtful : Overdue 9 months to 12 months

Bad/Less : Overdue more than 12 months

5Cs
Character: Borrowers integrity, honesty and intention
to repay the loan money.
Capacity: Borrowers business ability, especially profit
making ability.
Capital: Enough capital to cover the business risk.
Condition: Whether the applicants business is
favorable in the economy or not.
Collateral: Borrowers ability to produce additional
securities.
Credit Disbursement Procedures
Recovery Procedures
Analysis of Credit Management
Total Deposit of LBFL
Years 2011 2012 2013 2014 2015
Total Deposit 5,569 7,676 10,875 16,794 30,196
(BDT in Million)
Growth (%) 15.68 37.83 41.68 54.43 79.80
Leases, Loans and Advances
Credit to Deposit Ratio
Investment of LBFL
Investment to Deposit Ratio
Credit Concentration (Sector wise)
Credit Concentration (Location
wise)
Credit Concentration (Location
wise)
Classification of Leases, Loan and advances
in 2015
 Findings
Being an NBFI, LBFL get very low deposit. But there is very impressive growth of deposit in
last 5 years. 79.80% in 2015 is highest in last 5 years.

According to the lending guideline of Bangladesh bank, every institute need to segregate
its credit to different sector on the basis of their credit strength, economic condition and
institution's credit risk tolerance. From the analysis, it has been seen that LBFL has given a
large portion of credit in Agricultural sector in 2015 than other sectors.

LBFL is providing large proportion of credit in Dhaka division which is almost 75.11% to
their total credit and lowest proportion of credit in Barisal division which is 0.08% to their
total credit.

The amount of classified loan in 2011 is BDT 925 million which is 8.35% of their total credit,
in the year of 2014 the classified loan was 5.07% to its total credit. So, it is not a positive
sign for bank. In the classified loan the amount of "Bad & loss" was in 2011, 87.89%.
Recommendations
It has seen that LBFL is focusing agricultural sectors and only Dhaka division
while providing credit. In order to minimize the credit risk LBFL need to focus
on every sector and division and moreover LBFL need to focus on productive
sector while providing loan.
The retail department of LBFL should be effective and well enough to manage
actual and potential customer.
Classified investment in 2011 and 2014 is very high. So, LBFL should give
concentration to control the classified investment by Continuous
communication with client and before disbursement of fund LBFL should
properly check the document of the applied client.
As LBFL earns its principal revenue from loan interests. It must follow the rules
regulation to make the repayment and the collection of more smoothly. Before
giving any loan the officer must observe every aspects of giving loan is filled
and other things such as credit requirement, accountability, prepayment of
loans, collections, insurance and other required fields are covered or not.