Internship Report On

SME loans and financial analysis

on
IDLC Finance Ltd.
UNITED INTERNATIONAL UNIVERSITY

Course Title: Internship

Course Code: INT 4399

Submitted To:

Mossabbir Uddin Ahmad

Asst. Professor, School of business & Economics
United International University

Submitted By:
MD. Emamul Haque
ID: 111 132 052

Date: 04th August, 2018

Letter of Transmittal
04th August, 2018
Mossabbir Uddin Ahmad
Asst. Professor, School of business & Economics
United International University

Subject: Submission of Internship Report on “Different types of SME loans and financial
analysis of IDLC Finance Ltd”

Dear Sir,
With due respect and humble approach, this is my immense pleasure to present my Internship
report on the topic titled “Different types of SME loans and financial analysis of IDLC Finance
Ltd”. I have conducted my internship program at IDLC Finance Limited (Dilkhusha Branch)
under your close supervision.
I have tried my best to complete the report with respect to the desired requirements. I have
studied related documents and I also observed workings of Credit Risk Management department
for SME loans. By combining all of these I tried my best to prepare the report informative.

Hence, I am submitting my report and hope that you will appreciate my effort and instructive
approach. In case of any further explanation and clarification about the report, I will be glad to
assist you. Kindly accept my report and oblige thereby.

Sincerely Yours,
Md. Emamul Haque
ID: 111 132 052
Acknowledgement
Academic language might improve our mind but our thinking process will be reserved unless or
until this information is concerned in our life. If we want to raise a proper knowledge, we must
have to apply our knowledge and ideas in our work life. So, in terms of achieving a appropriate
education, then we must have to understand our knowledge which has been learned in the
academic courses. “Internship” is one of the possible ways of learning the things practically in
both our professional and own life. By Internship a student gain a practical knowledge about real
life. A student can realize how he/she can enlarge themselves in their future life. I am finished
my internship form IDLC Finance Limited which is considered to be one of the biggest non
banking financial institutions (NBFI). This report is very important of my BBA degree under the
supervision of the Mosabbir Uddin Ahmad Sir. I will make this report as informative as
possible. I would also like to thank my Supervisor of the IDLC Finance Limited; Mohammed
Areful Islam, Senior Manager & Senior Regional Credit Manager, Credit Risk Management.
Without his lively supervision and support, it‟s not possible by me to prepare the report. The
both practical and hypothetical support of him has helped me undoubtedly for the preparation of
the last three month‟s performance analysis of IDLC Finance Limited- SME Loan‟s.
Contents
Chapter 1....................................................................................................................................................... 1
Introduction .................................................................................................................................................. 1
1.1. Introduction to the Report:........................................................................................................... 2
1.2. Statement of the report: ............................................................................................................... 2
1.3. Objectives of the report: ............................................................................................................... 2
1.4. Methodology:................................................................................................................................ 3
1.5. Limitation of the research:............................................................................................................ 3
Chapter 2....................................................................................................................................................... 4
Overview of IDLC ........................................................................................................................................... 4
Chapter 3..................................................................................................................................................... 13
Product/ Services of IDLC ............................................................................................................................ 13
Chapter 4..................................................................................................................................................... 23
SME Finance ................................................................................................................................................ 23
4.7 Official Ranking in SME: .................................................................................................................... 30
4.8. SME Products of IDLC:................................................................................................................. 31
SME Term Loan/ Business loan: ........................................................................................................ 32
IDLC Purnota Loan: ........................................................................................................................... 33
ABASHAN Loan: ............................................................................................................................... 34
COMMERCIAL VEHICLE FINANCING: ....................................................................................... 35
REVOLVING SHORT TERM LOAN (RSTL):................................................................................. 35
PARTIALLY SECURED LOAN: ...................................................................................................... 36
IDLC STARTUP LOAN: ................................................................................................................... 36
IDLC UDBHABON: .......................................................................................................................... 37
4.9. LOAN PROCESS FLOW CHART: .................................................................................................... 39
Chapter 5..................................................................................................................................................... 40
Comparative analysis .................................................................................................................................. 40
5. Ratio Analysis: ................................................................................................................................. 41
5.1 Profitability Ratio: ............................................................................................................................. 41
5.1.1. Return on Asset: ........................................................................................................................ 41
5.2 Financial leverage ratio: .................................................................................................................... 44
5.2.1 Equity Multiplier:....................................................................................................................... 44
 5.3 Efficiency Ratio:........................................................................................................................... 45
5.4Loan Ratio: ......................................................................................................................................... 46
Chapter 6..................................................................................................................................................... 48
Recommendation& Conclusion .................................................................................................................. 48
6.1. Recommendations: .......................................................................................................................... 49
Conclusion: .............................................................................................................................................. 50
Chapter 7..................................................................................................................................................... 51
Bibliography ................................................................................................................................................ 51
7.1. References: ...................................................................................................................................... 52
7.2. Appendix: SME Appraisal report: ..................................................................................................... 53
Executive Summary
SME is small and medium enterprises which has great impact on the overall economy of our
country. The contribution of the SME is enormous. It plays a vital role for the growth and
development of the Bangladesh. A Large amount of capital is investing in capital market by the
contribution of SMEs. So this sector is helping the other sectors. As the importance of this sector
is increasing, in every year our country is organizing SME fair. In this year the fair has started on
4th April 2018. As there are enormous opportunities to invest in SMEs, people are trying to start
their own business. To help these people many banking and non-banking institutions are vastly
contributing in SME sector.

IDLC Finance ltd. is the one of the largest non-banking financial institutions. And they are
holding the leading position. They are providing the different loans to the SMEs. For the
expansion of SME sector IDLC is trying their best to contribute. IDLC has a good reputation
regarding the SME loans. They are well recognized by the customers. The reason behind that
they can provide loan within short period of time.

As I got the opportunity to work in IDLC Credit Risk Management department, I tried to find out
the different criteria‟s loan, loan process, document regarding the loan, disbursement procedure.
In my report I figure out the SME loans and the financial performance of the IDLC finance. I
also did financial analysis between IDLC Finance and Lankabangla finance as they are from the
same sector. Though it was difficult to find vast information within the short time but I tried my
best to make this report informative. I hope this report will help to do further research.

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 Chapter 1

Introduction

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1.1.Introduction to the Report:
The contribution of SME sector is enormous for the development of our economy. The role of
SME is everywhere. It‟s growing rapidly. For helping the SME sector the public banks as well as
private banks and non-banks are providing different services. As consequences, IDLC Finance
Ltd is one of the non-banking institutions in Bangladesh. They stared their business as leasing
Company back in 1985. Now they are the largest & holding as a market leader in this sector.
IDLC is enriched with their different types of services and products. They have expanded their
business into Consumer, SME, Retail, Corporate and Capital market sectors. IDLC has three
subsidiaries.

I did my internship from IDLC finance ltd. Where I have learned their different loans of SME. I
was in credit risk management- SEF department. To prepare the report I used much practical
information which I collected from my day to day activities in the company. In this report I have
mainly focused on SME loans, difference between different loans and some performance
analysis between IDLC finance ltd and LankaBangla Finance limited. By the combination of
practical and theoretical experience I have prepared the report.

Under the SME there are mainly four types of loan:

 Small Business
 Supplier Business
 Medium Business
 Deposits

1.2.Statement of the report:

To know about the different types of loan of SME. And financial performance between IDLC
and Lankabangla finance ltd.

1.3.Objectives of the report:

The objectives can be shown as:

 Broad Objective:
To get overall idea about the loans of SME of IDLC finance. Find the differences and
specifications. And to know about the financial performance of IDLC Finance

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  Specific Objective:
 To know about the activities of SME division.
 To know the process and policy of the department.
 To know about the process of loan sanction.
 To know about the requirements of different loans.
 To know about the loan evaluation policy.
 To know about the formalities of disbursement.
 To know about the different ratio analysis and financial performance.

1.4.Methodology:
It is one of the important parts to prepare a successful report. I have used both primary and
secondary data to make the report enrich and informative. By utilizing and analyzing the data I
have provided the report.

 Primary Data:

I have collected the primary information directly from the company with the help of my
supervisor. I talked with customers to know about the detail about the services of the IDLC
finance. I also collected date from the appraisal report of different loans.

 Secondary Data:

From different sources I have collected secondary data. The sources are:

1. The website of IDLC Finance Limited and LankaBangla Finance Limited.

2. Annual reports of IDLC finance limited (year-2017)
3. Annual reports of LankaBangla Finance Limited (year-2017)
4. Different articles, books, journals and newspapers.

1.5.Limitation of the research:

2. Restriction of some confidential information.
3. Non- Banking institutions are very busy. And couldn‟t find enough time for discussion.
4. Unavailability ofappropriate journals.
5. The SME is huge, 3 months is not enough to get a good knowledge about all things.

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 Chapter 2

Overview of IDLC

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2.1 IDLC Finance:

In 1985 Industrial Development Leasing Company (IDLC) of Bangladesh Limited started their
journey. Now they are the largest Non-Banking Financial Institution (NBFI) of Bangladesh.
They started their business with a single product „lease financing‟ with 5 employees. After 33
years now they are the biggest multi-product with different segments NBFI in Bangladesh. They
have diversified, strong and smooth establishment in Corporate, SME, Retail and Capital
Market segments.

They are the company of 3 fully owned subsidiaries within their group. IDLC has strong footing
& presence over the 24 cities. They are serving almost fifty thousand customers overall the
country with 38 branches and booths where 1400 dedicated employees are working for them.
Their purpose is to finance people for the betterment of the customers and to chase their dreams.

IDLC provides wide variety of services and products in the form of „Small & Medium Enterprise
Finance (SME), Corporate Finance, Lease Finance, Term Finance, Retail Finance, Structured
Finance, Supplier and Distribute finance, Term Deposit Schemes, and Corporate Advisory
Services‟. With three subsidiaries they are also serving merchant banking, asset management
service and stock broker service.

The company is maintaining their standard and ethics strongly to hold their leading position. The
biggest secret to become the leading position is to maintain timeliness and fast service. IDLC
always provides best quality products to their customers for this the company holds a strong
position in the corporate section in Bangladesh.

2.2. History of IDLC:

IDLC started as a leasing company in 1985. By the initiative ofInternational Finance

Corporationthe company was established. IDLC was formed by different domestic &
international companies. The collaboration were made by International Finance Corporation
(IFC), Aga Khan Fund for Economic Development, German Investment and Development
Company, Bookman Bank, Korea Development Financing Corporation (KDLC),SadharanBima
Corporation and The City Bank Limited, Bangladesh Limited.

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IDLC AT A GLANCE

2.2 Non-Bank Financial Institution:

A Non-banking financial institution provides certain types of banking services, but do not hold a
banking license. They do not take any kind of deposit from the public. This institution can offer
many banking services such as loans and credit facilities, retirement planning, merchant banking,
money markets and etc.

This kind of organizations is enrolled under the Companies Act, 1956 and bargains in the matter
of credits and advances, interests in securities, shares, debentures, stock and other attractive
securities Viz.

To do stores activation, long haul credit, makes business, improvement of money related market;
this institutions can assume an extraordinary part.

2.3 Mission

The mission of IDLC is to concern about quality growth, great customer experience and
sustainable business practices

2.4 Vision

Presents themselves as the best financial brand throughout the country.

2.5 Values of IDLC:

IDLC always try to provide the best to the customers. Maintain equality & focus on their
customer services is the most valuable thing for IDLC. Their values are;

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  Equal Opportunity
 Integrity
 Customer Focus
 Trust and respect
 Passion
 Eco- Friendly
 Simplicity

2.6. Strategic Objectives of IDLC:

 Grow and develop our talent pool

 Optimise distribution points
 Fully leverage the core banking platform
 Grow sales and service capabilities in theconsumer division.
 Sustainably grow SME portfolio
 Consolidate capital market operations andenhance capabilities
 Focus on top-tier clients in the corporate segment
 Embrace internationally accepted corporate governance and sustainable business
practices.

2.7. Business orientation:

i. Profitable: IDLC try to maintain a sustainable profit growth.

ii. Growth-oriented: According to the present market condition IDLC try to have
some long term approaches.
iii. Low risk: Their credit quality control the NPL. They are achieving continuous
results by managing treasury conservatively.
iv. Cash generative: As they have strong cash flows so they can make a good
balance in reinvestment and dividend pay-outs.
v. Aligned interests: IDLC try to maintain their standard of values and ethics. And
confirm the code of conducts in every year.
vi. Return on capital: To get the highest return IDLC allocate their capital to
business & market. And maintain their strategy.

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 Organizational Chart of IDLC

2.8. Code of Conduct& Ethical Guideline of IDLC:

IDLC‟s employees should follow the code of conducts strictly.

 Employees need to do their work with integrity dignity & competence. They also need to
follow ethical manner when they deal with customers, colleagues or public.
 They need to have knowledge to perform with applicable rules and laws.
 Employees need to encourage others to have professional knowledge& ethical manner.
And behave like that to other employees or people.
 Try to maintain improves & do competition with other business.
 All the conflicts of interest have to be disclosed.

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  To do professional judgement independently always uses reasonable care.
 Not to prevent others for performing their professional obligations.
 According the policy of IDLC employees need to deliver professional services
 Keep privacy to the confidential information of customers from others.
 Not to engage with any kind of dishonesty, deceit, fraudulent activity or
misrepresentation of information.
IDLC employees have to maintain theses ethics.

2.9. Shareholding Composition of IDLC: [December 31, 2017]

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 2.10 Subsidiaries of IDLC:

IDLC has three subsidiaries.

 IDLC Investments Limited:

IDLC Investments Limited is a completely merchant bank. They provide different types of
services. They assist their clients in IPO process for the company.Different types of portfolio
management for clients.Their various services:

 PORTFOLIO MANAGEMENT
 Easy Invest
 MAXCAP
 Profit – Loss Sharing Scheme
 Capital Protected Scheme
 Portfolio Advisory Service
 Cap Invest; etc.

 IDLC Securities Limited:

To ensure the long term investment IDLC securities is here to help their clients. They prefer the
clients‟ interest first & try to serve knowledgeable brokerage service.Their services:

 Brokerage.
 Investment Option

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  Value Added Services.
 Trading Tools
 Clients Segments

 IDLC Asset Management Limited:

IDLC Asset Management Limited provides „Mutual Fund‟ services to their customers.

Their Products:

 IDLC Growth Fund

 IDLC Balanced Fund

2.11.Corporate Social Responsibility:

IDLC always concern about their CSR activities. For the development of long term value (value
of stakeholder, community & environment) IDLC is always committed for that.

In 2018 they took different initiatives:

 In this winter IDLC donates worm clothes to ProthomAlo trust.

 By collaborating with Green Saver, IDLC teaches students at Bhulta High School and
college about environment.
 IDLC update the „Local Cultural Hub At Noakhali‟
 To do volunteer works IDLC provides a community platform called „KhushirKheya’

Some moments:

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2.12 Location of Head Office and Different Branches of IDLC:

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 Chapter 3

Product/ Services of IDLC

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3.1 Product & Services of IDLC Finance:

IDLC Finance has different type of products& services for their long term growth, which ensure
the customers‟ demands. In this competitive business environment they try to serve their best to
ensure the customer as well as their employees benefit. IDLC has different products and services
like „Corporate division, Consumer Division, SME Division and the Capital Market‟.

In Corporate Division IDLC have Corporate Finance (Lease Financing, Term Loan Financing,
Working Capital Financing, Project Financing and Specialized Products), Structured Finance
(Fund-raising, Securitization of Assets Advisory Services, and FAQ) and Fees and Charges.

3.2 CONSUMER:

They have different types of consumer services,

1. IDLC DEPOSITS:

Deposit means sum of money paid into a bank or financial institution to get benefits in future.
IDLC provides these faculties & ensure that the customer will obtain guaranteed income after the
maturity period. After the certain period customers will be benefited by interest. IDLC Finance
has achieved the highest safety & security credit rating „AAA‟ (Triple A), which says that the
company has strong capacity to meet financial commitments with minimal credit risk.

1.1. Regular Term Deposit:

There are various Regular Term Deposits IDLC serves by this people can get guaranteed income
and they can use it for any personal or business need. For the financial future plan these deposits
are best suited to fulfil it. There are suitable deposit tenures IDLC has designed for the
betterment of consumers.

Three types of Term Deposits are

i. 3-15 months Term Deposit.
ii. 500 days Term Deposit.
iii. 2-5 year Term Deposit.

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1.2.Monthly Earner Deposit:

For a regular source of monthly income this deposit would be the best one. It‟s agood financial
solution for individual. This deposit is safe & secure.

This product is suitable for:

 Retired Persons
 Housewives
 Others

People can prefer any tenure from 1 to 5 years.

1.3.Quarterly Earner Deposit:

For the secure source of quarterly income this is the best possible deposits. From this deposit
people can earn competitive as well as fixed return after 3 months. People can select any of the
tenure from 1 to 5 years.

1.4.Double Money Deposit:

In this deposit scheme people can double up their amount of money they invest. This is one of
the popular deposit schemes. People can invest their idle money in this deposit. For the long term
future goal it would be the correct choice.

1.5.Triple Money Deposit:

For any big & long term plan without hesitation people can take Triple Money Deposit scheme.

Key features & benefits of IDLC Deposits:

 Flexibility of tenors.
 For the Consecutive „AAA” credit rating deposits have highest safety.
 Monthly/ quarterly interest is automatically transferred to the customer‟s bank account.
 Competitive interest rate.
 No fees for account maintenance.

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  Secured loan facility within shortest possible time.
 Online branch.
 Dedicated relationship manager for customers.
 Auto renewal facility.

Minimum Deposit Amount:

 For 3-5 months ( Regular Term Deposit product) = BDT 10,000

 For all other deposits = BDT 50,000

Payment Mode:

 Account payee cheque or pay order in favour of IDLC Finance Limited.

Saving Facilities:

From deposits customers are benefited by interest. Various saving facilities are,

Saving Facilities

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Female clients (Individual account & if account is opened singly) will get 0.10% higher interest
rate on Regular Term Deposits & Regular Earner Products.

2. IDLC HOME LOAN:

Having an own home is a dream for many people. IDLC finance makes this easy for the people.
After giving appropriate information,within a short time anyone can get loan amount. By giving
long term periodic payment system it will be convenient for the people to pay back the loan
amount. There are different types loan IDLC is providing to the customers. Interest is varied in
different categories of loan.

 Procedure for this loan:

IDLC will use the home/ apartment or the asset as the mortgage against this loan.

2.1. APARTMENT PURCHASE LOAN:

For the safety of family & children IDLC bring this APARTMENT PURCHASE LOAN.
Customer can easily purchase an Apartment.

PRODUCT FEATURES:

 Through EMI Customer can repay the loan.

 Interest rate is flexible & it depends on loan amount.
 Interest can be fixed or variable.
 There is no hidden charge.

SOME TERMS:

 Applicants: Professional, Job Holder, Self-Employer.

 Location: Near to the IDLC branch/ booth

Interest Rate Maximum Term Maximum Age

Fixed 25 years 65 years
Variable 20 years 65 years

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2.2. HOME EQUITY LOAN:

It‟s a special loan for renovation of old home. For designing, decorating, expansion of home this
loan is perfect solution for any individual. It is very easy to get the loan.

PRODUCT FEATURES:

 Term: 15 to 20 Years.
 Through EMI Customer can repay the loan.
 Interest can be fixed or variable.
 Disbursement/ Loan amount: It‟s up to 75% of the building value (Including
Registration).

SOME TERMS:

 Age: 25 to 60 years.(For the professional it can be vary)

 Earnings: Employee or Businessman
 Location: Near to the IDLC branch/ booth

2.3. HOME LOAN SHIELD:

It is the complete protection of the loan trough insurance. If the loan holder faces any obstacle to
repay the loan amount then the insurance company will cover some portion of the loan. To
protect the family burden this loan is introduced. If the holder can‟t pay the loan for any reason.
The insurance company will provide it.

SOME TERMS:

 Loan Coverage: 50% to 100% coverage of total loan. But this is based on the loan holder
age, loan term, outstanding of principle amount.
 Term: Same as term of home loan.
 Premium is single & low.
 It provides medical examination from any hospital ( Free of cost)

Nominees Claim to insured amount:

 Within 7 days the nominees have to claim & explain.

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  Have to show the appropriate information regarding the event.
 Help the insurance company if they do any investigation.
 Loan holder has to show relevant evidence to claim the insured amount.

2.4. CONSTRUCTION LOAN:

To build own property this is the preferred option for customers. It‟s a dream for any people to
build his/ her own property or office. For any new or existing projects this loan is suitable to get
money easily from IDLC.

PRODUCT FEATURES:

 Loan Amount: It is up to 85% of the total building value (Registration is included).

 Term: Up to 20 Years. It depends on project.
 Mortgage: It may the property itself, any asset or security (equivalent).
 Through EMI Customer can repay the loan.
 Early prepayment option whether it‟s full or part.
 Any technical advice is available.

How to Use: For New residential buildings or existing residential buildings construction.

SOME TERMS:

 Age: 25 to 60 years
 Applicants: Professional, Service Holder, Self-Employed / Business person orLandlord.
 Location: Near to IDLC branch or booth.

2.5. REGISTRA LOAN:

After having any property it‟s a must to do registration of the property. To secure the property
registration some time it is very costly to do this. For the easy registration IDLC is proving the
best solution to the people. Home owner doesn‟t need to bear the burden of the registration.

PRODUCT FEATURES:

 Term: Up to 10 Year.
 Loan will be provided up to 15% of total property cost.

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  Through EMI Customer can repay the loan.
 Age: 25 to 60 Years.

2.6. LAND PURCHASE LOAN:

This loan will give an opportunity to buy a land.

Condition:

 The land will be treated as the mortgage against loan.

 Age: 20 to 65 years.

PRODUCT FEATURES:

 Loan can be taken up to the 75% of the value of the land

 The value use for the land must be present value.
 Loan term is up to 12 years.
 Mortgage is required for the loan.
 Through EMI Customer can repay the loan.

3. IDLC CAR LOAN:

To have an own car is very safety and convenient for any family. As the cost is very high, it‟s
difficult to have an own car. IDLC is giving the opportunity to grab an own car with easy
condition. Different types of loans are:

3.1. NEW CAR LOAN:

This loan is providing for the new car.

PRODUCT FEATURES:

 Loan Amount: Up to 80% of the total cost of new car.

 Term: Up to 6 years.
 Fast Service
 Through EMI Customer can repay the loan.

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  Sometimes get discount form the special arrangement from IDLC which is offer by
renowned dealer.
 Payment option: Partial or Full
 Different advisory services like technical advice.

3.2. RECONDITIONED CAR LOAN:

For purchasing a reconditioned car IDLC provides this loan.

PRODUCT FEATURES:

 Same as New Car Loan feathers.

3.3. PRE ORDERED CAR LOAN:

PRODUCT FEATURES:

 Same as New Car Loan feathers.

Eligibility of the Car loan:These criteria should be matched to get the loan. Criteria‟s are same
for these car loans.

 Age: 22 to 60 Years
 Experience:
1. House Holders- Need 2 years‟ work experience.
2. Entrepreneurs- Need 3 to 5 years of business experience
 Income Criteria: Monthly amount required (minimum).

Service-holders/Professionals BDT= 40,000

Landlords BDT= 50,000
Business Person (SME) BDT= 50,000
Business Person (Corporate) BDT= 75,000
NRB Service-holders BDT= 75,000
NRB Business Persons BDT= 100,000

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3.4 IDLC PERSONAL LOAN:

For any personal purpose people can get loan from IDLC. Like for business, education etc. The
list is given below:

Usage of this loan:

 To buy customers durable.

 To meet financial liabilities.
 Marriage
 Education
 Any kind travelling ( Foreign or Local)
 Medical support for family
 Or some other need.

PRODUCT FEATURES:

 Loan/ Disbursement Amount: BDT 50000 to 10 Lac

 Term: 1 to 5 Years.
 The loan processing time is very fast
 Interest: Depend on facility amount
 Dedicated relationship manager.
 Through EMI Customer can repay the loan.

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 Chapter 4

SME Finance

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4.1. What is SME Financing?

The full form of SME is Small and medium-sized enterprise. These businesses are defines by
certain number of employees working in the organization. To fund and develop these
organizations the SME Financing is invented. For the development of the overall economy Small
and medium enterprises have curtail contribution. They are playing important role for growing
the economy, creating jobs and social attachment. SME is also contributing in different industrial
sectors. By the contribution of SME, enterprises are investing a large amount of capital in
financial market. Deferent banks & financial institution are now focusing on the sector. And they
are actively concentrating.

4.2. SME definition in Bangladesh:

Replacement Cost
Number of
Types of Industry (Excluding Land and Factory
employees
building cost)
Small Manufacturing BDT 7.5 million to 150 million 31 to 120
Industry Service BDT 1 million to 20 million 16 to 50
121 to 300
But for labour/ RMG
Medium Manufacturing BDT 150 million to 500 million
industries, it is not
Industry
more than 1000
Service BDT 20 million to 300 million 51 to 120

Source: National Industrial Policy 2016

4.3. SME in Bangladesh:

SME (Small and Medium Enterprise) have a significant role in Bangladesh. For the development
of economy& industrialization these types of organizations are working relentlessly. They are
also creating new employment opportunity. By the SMEs the countries poverty is also decreasing

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and increasing the income of rural people. Though SMEs sectors need less energy supply, not
many infrastructure facilities but they are contributing more in the society. The environment risk
is also lower

 SME is contributing 25 percent of totalGDP.

 By the initiative of government, there are five national fairs have held by the SME
foundation since 2007. In these fairs goods of BDT 1107 crore had been sold and also got
order of BDT 1297 crore had been received.
 Almost 75 lac SMEs are ding there business around the country.
 For good financing to SME, almost 11 banks and FI (financial institutions) are providing
single digit loan to the entrepreneurs since 2009.
 Creating employment for almost 31 million people, also giving 75% of household
income.
 SME is contributing 80%-85% of industrial employment and overall 23% of total
employment.
 Almost 70%- 80% of non- agricultural employees get employment opportunity from
SMEs.
 From the last 5 years 20 percent new entrepreneurs have taken initiative for small and
medium business

Different private banks and financial institutions are contributing to develop SME sectors.
Financial institution like IDLC, IPDC, Lanka Bangla, United Finance etc.Private Banks like IFIC
bank, BRAC bank, Pubali bank, Dhaka Bank, Standard Chartered bank, Islami Bank Bangladesh
etc. Many government banks are also providing these facilities. Like Janata Bank is promoting
SMEs by funded a good amount of money. Their projects are:

1. Small enterprise development projects

2. Investment facility for small enterprises.

25 | P a g e
Growth in manufacturing sector of Bangladesh:

(In croreTk)

Industry 2009-10 2010-11 2011-12 2012-13 2013-14

Small & 200039.5 21176.0 22569.1 24557.9 26179.8
Cottage (8.17) (5.67) (6.58) (8.81) (6.60)
Medium- 79631.4 88475.3 97998.3 108436.2 118364
Large (6.27) (11.11) (10.76) (10.65) (9.16)
99670.9 109651.4 120567.4 132994.1 144543.8
Total
(6.65) (10.01) (9.96) (10.31) (8.68)
Source: Bangladesh Bureau of Statistics

Role of SMEs in Different Aspects of Business:

Aspects Contribution
National Gross Domestic Products 25%
Total Labor Force 25%
Industrial Job 85%
Gross Manufacturing Output 40%
Percent Of Business Over 95%
Total Exporting Earnings 89%
Absorbed Industrial Workers 70 to 80%
Source: Statistics and Information Division, 2016

Overall the SME is contributing a lot in Bangladesh. Creating employments, producing

machines, parts of machines; these all are saving a large amount of foreign currency. For the
development of our country we should emphasize on SMEs sectors to increase foreign trade as
well as industry base. SMEs are producing different incentive goods like, toys, small tools,
consumer products, paper items for local market. This sector is creating opportunities for
investment. If the industries are developed then the investment opportunities will increase. IN
Export sector SMEs has obtained momentum in last couple of years.

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Not only Bangladesh, if we see the Asia‟s different countries we will have a clear idea about the
contributions of SMEs;

Percent of Enterprises in ASIA:

Countries Enterprises
Malaysia 97.3%
China 97.3%
Kazakhstan 97.5%
Singapore 99.4%
Vietnam 97.7%
Japan 99.7%

SME Financing by IDLC:

SME financing procedures/ policies of IDLC:

Approval Authority:

There are some authorities who can approve the loan. Loan Approval varies from authority to
authority. Board of Director has the highest authority to approve loan. IDLC‟s Authorities are:

Authorities Amount Clients

Exposure more than BDT
Board of Director New & Existing Clients
250million
Exposure more than BDT
Executive Committee New & Existing Clients
50million to 250 million

CEO & Managing Up to 50 million New clients

Director Up to 70 million Existing clients.

27 | P a g e
Loan criteria for clients:

These are the criteria for the IDLC‟s clients. These criteria must be ensured by the clients to get
loan from IDLC.

1. Client has to be in reputed business arena.

2. Client has diversified business.
3. Client should be treated as good borrower by sanctioning authority.

Other Issues:

1. If there is 3rd party mortgage, Personal guarantor of owner is necessary.

2. Personal guarantors have to be supported by Personal Net Worth (PNW). And it should
be up to date.
3. If it is cash security, cash must be collected before disbursement of loan.
4. In case of security mortgage should be taken.

Security Coverage:

For any secured loan securities is must. From loan to loan securities vary. Loan amount is also
dependent on the security mortgage. IDLC takes different securities for their secured loan. These
are:

Collateral Security Coverage

Land 80% of Market value

Building 50% of market value

Vehicle Within down value

Share 50% market value or face value; which is

lower.

cash security on FDR 100%

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Credit Evaluation Committee Rights:
 Approve the appraisal reports as per the term & conditions. If the approval authority is
not CEO, then with recommendations the appraisal handover to the next approved
authorities.
 Request for additional information.
 Request for evidence regarding the information.
 suggest to change or increase the security
 Change the loan amount
 Suggest the equity participations of clients.
 Suggest to provide additional guarantors
 Decline a financial proposal by its risk management.

29 | P a g e
4.7 Official Ranking in SME:

Junior Officer

Assistant Officer

Officer

Senior officer

Senior Executive Officer

Assistant Manager

Manager

Senior Manager

Assistant General Manager (AGM)

General Manager/ Head of credit

Figure 15:Official Ranking in SME

Source: Internal Data Source

30 | P a g e
4.8.SME Products of IDLC:
In is growing market SMEs have great influence in overall economy. For this different Banks &
Financial Institutions are providing various loans to small and medium enterprises. IDLC is one
of them. For the SMEs loan IDLC treated as the best option for taking the service. Now they are
market leader in this sector. The loan is made for service, manufacturing & for small companies.

Why IDLC are in leading position:

 Their TAT (Turn around Time) is very lower. It says that they can disburse their loan
within 7 days.
 A dedicated relationship manager for customers.

Most Banks & Financial Institutions take time to disburse the loan

IDLC’s SME loan features:

Features of the loan:

 Loan term:

Loan Amount Limitation:

 BDT 5 lakh to 2 crore.

Client Eligibility:

 Applicant has to be 2 years‟ experience in business sector.

 Business must be in running process

Required Documents:

 Trade license of the Business ( for last 1 year)

 Tin Number.
 Business details.
 Financial report (Annual report of the company)
 Bank transaction ( for last 1 year)
 Assets legal information
 Guarantors‟ information for secured loan.

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  National ID card, Photo ( passport size)

SME Term Loan/ Business loan:

This is also called working capital loan. For the purchasing of fixed assets to expand the
business, this loan is appropriate.

Purpose:

 Working capital.
 Financing for lease
 Purchasing of fixed asset.

Features:

 Loan Limit: It is up to Tk 2 crore.

 Tenure: Minimum 13 months to 60 months
 Loan without collateral: financing can be provided up to 25 lac.
 Repayment system: They offer convenient repayment system.
 Fixed monthly instalment
 Customized instalment.
 Loan processing is very fast.

Eligibility:

 Age: It‟s between 20 to 60 years.

 Experience:The business must be operating for 2 years.

Necessary Documents:

 TIN certificate.
 Last 1 year bank transaction statement.
 Proper evidence for assets
 Trade license

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IDLC Purnota Loan:
IDLC Purnota loan is invented specially for the women entrepreneurs to finance them. For small
or medium businesses this loan is preferable.

Loan Amount:

 Minimum = BDT 3 lac

 Maximum = BDT 25 lac ( For unsecured loan)

Features:

 Tenure: 13 months to 60 months

 Based on business cash flow, flexible repayment is considered.
 At 9% interest scheme loans can be provided up to BDT 50 lac by the reference of
Bangladesh bank

Eligibility:

 Age: minimum 20 & maximum 60 years.

 Minimum one year business experience.

Coverage:

 BDT 1 lac to 10 lac

Various benefits of IDLC Purnota:

IDLC Purnota clients will get different non-financial helps for the growth of the client‟s
business. These are:

 Business Facilitation service:

To get regulatory license & documents IDLC helps to collect those. They are provided many
guide lines to get the documents as early as possible without any problem. There are different
types of documents are need like; TIN Certification, Trade license, Environmental certification,
Import Realization certificate (IRC), BSTI certificate etc.

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  Purnota Helpline:

To get information & guidance for any topic Purnota Helpline will provide the service. There are
different types of information that client need like; business loan, Purnota loan, Training
schedules, banking systems, bookkeeping and accounts, deposit related information, loan
information etc.

 Purnota Training Centre:

There are 2 trainings in Purnota training centre. One is Capacity & skill development; another is
Management & vocational training. There are other trainings:

Ex- Working capital management, book keeping, production management etc.

 Purnota Insurance:

To prevent the losses in business Purnota Insurance provide insurance. Losses that are connected
toindividual or family business will be mitigated by the insurance. Different risks are accidental
death, Injury, physical injuries.

 Punta Club:

In this club the women entrepreneurs talk to each other and discuss about skills, experiences and
skills. From this club a network creates among all of them.

ABASHAN Loan:
To utilize the unused property, land or buildings for industrial areas workers; this is possibly the
best opportunity. By taking the IDLC Abashan loan anyone can take the opportunity. This loan is
also created for the small businesses. The places that already have permanent structure or
construct for commercial rent. It is also called mess rent. Normally these places are near by the
EPZs or industrial areas.

Loan amount:

 Up to 2 crores.
 Without any collateral: BDT 15 lacs.

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Features:

 This service is fast and has quality service.

 Repayment system: Equal Monthly instalments (EMI).
 If applicants have another loan from other institution they can also get the loan.

Eligibility:

 Minimum 1 year business experience is mandatory for the entrepreneurs.

 Business must be running and at least 1 year operating experience.

COMMERCIAL VEHICLE FINANCING:

For the business purpose we need vehicles. To meet the expectation and fast the business process
the Commercial Vehicle Financing have designed to help the business.

People can take this loan for:

 Procurement of passenger vehicles and

 Transpiration vehicles forthe business.

Features:

 Loan limit: up to 80 percent price of the transport / vehicle.

 Tenure: Maximum 5 years

Eligibility:

 The business must be running and also have 2 years of business experience.
 Age: Minimum 20 years to 60 years.

REVOLVING SHORT TERM LOAN (RSTL):

To meet daily small term demands of business. The appropriate loan. It is also called working
capital loan. The main feature of this loan is, it can be sanctioned one or multiple dropdowns.
But the payback system is according to business cash cycle.

35 | P a g e
Features:

 Loan limit: up to taka 1 crore.

 Tenure: up to 1 year.
 Based on business cash flow the flexible payment system maintained.
 Based on the needs IDLC fixed the disbursement methods.
 Drawdown‟s is unlimited within the full contract period

Eligibility:

 Clients must have 3 years of business experiences

 Age: 30 – 60 years.

PARTIALLY SECURED LOAN:

To meet the business demand of fixed asset & working capital.

Features:

 Loan limit: up to 1 crore.

 Tenure: 13 – 60 months.
 Based on business cash flow the flexible payment system maintained.

Eligibility:

Eligibility:

 Clients must have 2 years of business experiences

 Age: 20 – 60 years.

IDLC STARTUP LOAN:

To start a new business with new idea. IDLC is always ready to help these entrepreneurs.
Today‟s risk is tomorrow‟s gain. To cheese the ambitions entrepreneurs need capital in an easiest
way. IDLC would be the best option.

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Purpose:

 To finance the new business

 To accelerate the new business.

Features:

 Loan limit: up to 25 lac.

 Tenure: up to 5 years.
 Grace period: 3 - 6 months
 Repayment procedure: Structure or EMI method.
 Fast loan processing.
 To ensure fast processing IDLC have committed service team.

Eligibility:

 Experience: Less than 3 years.

 Age: 18 – 45 years.
 No previous experience in ownership business.
 No previous borrowing.

IDLC UDBHABON:
With the tagline of „Finance your digital dream‟ IDLC finance come up with IDLC
UDBHABON. Here they provide loan to ICT dreamers to speed up their business in association
with Basis.

Features:

 Loan amount: Minimum taka 5 lacs.

 Unsecured: up to taka 25 lacs.
 Partially secured: up to taka 1 crore.
 Tenure: 13 to 60 months.
 Repayment system: EMI
 Basis members will get special benefits.

37 | P a g e
Eligibility:

 Age: 20 years to 60 years.

 2 years of running business operations.

Lease Loans:

Lease Financing:

 To purchase the new machine this loan is appropriate. The security is backed by the new
asset.
 Up to 100 costs IDLC provides extended financial facility.
 Finance Term: 2 - 5 years.
 In the whole period the ownership remains to IDLC, after the end of the period it will be
transferred to their client.

Sale & Lease Back:

 It offers financing against the existing/ current asset. Like office equipment, commercial
equipment, vehicle etc.
 In the whole period the ownership remains to IDLC, after the end of the period it will be
transferred to their client.
 Finance Term: 2 - 5 years.
 Payment Method: EMI

38 | P a g e
4.9.LOAN PROCESS FLOW CHART:

• Application For loan:

• Here the clients will fillup a application form.
1

• Businees People/ Relationship Manager:

• They primarily contact with client. And make apprisal report.
2
• Credit risk management (SEF) department
• Analyse the apprisal report & compliance with credit policy of IDLC
3

• Analyse:
• CIB (Credit Information Bureau) report and bank opinion, analysis of
4 financial statement, varification of financial projections, detarmine risks.

• Client Visit:
• Credit Analysts then visit the clients business physically.
5
• Approval:
• If all things are ok & have low risk then the approval authority approve the
6 loan.

• Legal (operation) Department

• After the approval; then it goes to legal deparment for further varification of
7 documents.

Figure 16: Loan process chart of IDLC

Source:Internal Date Source (Credit Policy)

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 Chapter 5

Comparative analysis

40 | P a g e
5. Ratio Analysis:
Here I am compare three leading NBFI companies IDLC, LankaBangla & IPDC finance ratio. I
collected five years (2013 to 2017) financial statement of the three companies. I tried to find out
the which companies was better in those years.

5.1 Profitability Ratio:

5.1.1. Return on Asset:

ROA(Return on Asset) 2013 2014 2015 2016 2017
IDLC 1.33% 2.11% 1.99% 2.24% 2.35%
LankaBangla 2.98% 1.16% 0.83% 1.24% 2.25%
IPDC 1.83% 2.02% 1.06% 0.77% 0.85%
Table: Return on Asset

ROA
(Return on Asset)
IDLC LankaBangla IPDC
4.00%

3.00% 2.11% 2.24% 2.35%

2.98% 1.99%
ROA

2.00% 1.33%
2.25%
1.00% 1.24%
1.16%
0.00% 0.83%
2012 2013 2014 2015
Year 2016 2017 2018

Figure 17: Return on Asset

Net Income
Formula: Return on Asset: Average Total Assets

Interpretation: ROA actually shows, by utilizing the total asset how much net income financial
institution can generate. In 2017 IDLC had 2.35% ROA. It means that they are getting 2.35 tk by
utilizing its asset 100 tk. Where Lankabangla and IPDC ROA was 2.25%& 0.85%. In 2013
Lanka Bangla& IPDC was in better position than the IDLC. But by the time IDLC is doing better
and better. In 2014, 2015, 2016 all these years IDLC had good ROA. The reason behind that

41 | P a g e
IDLC has balanced operating income & operating expenses. So the net income after tax is high.
That‟s why IDLC is in better position.

5.1.2 Return on Equity:

ROE(Return on Equity) 2013 2014 2015 2016 2017

IDLC 12.48% 19.08% 18.74% 19.92% 17.86%
LankaBangla 13.96% 6.54% 6.72% 11.90% 23.13%
IPDC 7.00% 7.00% 10.00% 11.00% 11.00%
Table: Return on Equity

ROE
(Return on Equity)
IDLC LankaBangla IPDC

25.00% 18.74% 19.92% 23.13%

20.00%
12.48% 19.08% 17.86%
15.00%
ROE

10.00% 6.54%
13.96%
5.00% 11.90%
0.00% 6.72%
2012 2013 2014 2015 2016 2017 2018
Year

Figure 18: Return on Equity

Net Income
Formula: Return on Equity: Shareholders ‟ equity

Interpretation:ROE actually shows, by utilizing the total shareholders‟ equity how much net
income financial institution can generate. In 2017 the ROE of IDLC was 17.86%. It means that
they are getting 17.86 tk by utilizing 100 shareholders‟ equity. Here we are seeing that
Lankabangla is in fluctuation position. Though in 2013 IDLC and Lankabangla was in almost
similar position. But year after year Lankabangla‟s ROE was going down. IPDC ROE was
increase year after year but the here IDLC &LankaBangla were better than IPDC.

42 | P a g e
Here we can say that IDLC is using shareholders‟ equity in a balanced way. Though in 2017
ratio went little bit down. In 2017 Lankabangla grab the peak position. They are taking some
new strategy to grow it up.

5.1.3 Net Interest Margin:

NIM(Net Interest 2013 2014 2015 2016 2017

Margin)
IDLC 4.26% 5.07% 4.80% 4.85% 4.29%
LankaBangla 2.56% 2.50% 2.25% 2.80% 2.77%
IPDC 0.87% 5.84% 5.62% 2.94% 2.82%
Table: Net Interest Margin

NIM
(Net Interest Margin)
IDLC LankaBangla IPDC
8.00%
6.00% 5.07% 4.80% 4.85%
4.26% 4.29%
NIM

4.00%
2.00%
2.56% 2.50% 2.25% 2.80% 2.77%
0.00%
2012 2013 2014 2015 2016 2017 2018
Year

Figure 19: Net Interest Margin

Investment Income – Interest Expenses

Formula: Net Interest Margin = Average Earning Assets

Interpretation: NIMactually shows, by the investment operations how much money company is
generating. It shows as % (percentage) of total amount of investment assets. In 2017 IDLC had
4.29% NIM. It means by investing 100 tk earning asset IDLC is getting 4.29 tk. In this NIM
ration IDLC is always better than the Lankabangla Finance. Lankabangla had 2.77% where
IDLC had 4.29%. But IPDC NIM was fluctuated. In 2013 it was very low but in 2014 & 2015 it

43 | P a g e
was similar to IDLC but recent year it was decreased. But it was better than LankaBangla.By
seeing the graph we can see the position of IDLC. The reason behind that IDLC is investing in
profitable sectors than lankabangla. That‟s why the figure shows that in NIM ratio IDLC is better
than the lankabangla.

5.2 Financial leverage ratio:

5.2.1 Equity Multiplier:

EM(Equity 2013 2014 2015 2016 2017
Multiplier)
IDLC 9.40 9.03 9.43 8.88 7.60
LankaBangla 4.69 5.63 8.06 9.56 10.26
IPDC 17.22 3.38 3.31 8.14 12.63
Table: Equity Multiplier

EM
(Equity Multiplier)
20.00
EM (Times)

15.00 9.40 9.03 9.43 8.88 10.26

10.00
5.00 9.56 7.60
8.06
0.00 4.69 5.63
2012 2013 2014 2015 2016 2017 2018
Year
IDLC LankaBangla IPDC

Figure 20: Equity Multiplier

Total Assets
Formula: Equity Multiplier = Total Shareholders Equity

Interpretation: EMactually shows the % (percentage) of assets which is owned or financed by

shareholders. It explains about the financial leverage.In 2013 the EM was 9.40. 2013 to 2016 it
the EM increased. It means that IDLC bought asset by taking loan which is more than equity. So
the result is not good here. Because that will increase the interest burden of IDLC finance Ltd.
And the risk is also high. But from 2016 IDLC is try to reduce this statement. And try to

44 | P a g e
minimize their risks.IDLC is trying to use own equity to purchase assets. But LankaBangla was
better EM. LankaBangla purchase their asset by their own equity. On the other hand IPDC in
2013 was high EM. Its means they take loan to buy asset. In 2014 and 2015 they decrease their
EM but 2016 & 2017 they increase their EM. Its means they take more loan.

5.3 Efficiency Ratio:

ER(Efficiency 2013 2014 2015 2016 2017

Ratio)
IDLC 45.05% 40.02% 35.92% 37.97% 37.19%
LankaBangla 40.22% 62.16% 63.92% 59.89% 51.95%
IPDC 32.03% 31.82% 30.28% 40.38% 45.99%
Table: Efficiency Ratio

ER
(Efiiciency Ratio)
100.00% 40.22% 51.95%
40.02% 63.92% 59.89%
ER

50.00% 62.16%
0.00% 45.05% 35.92% 37.97% 37.19%
2012 2013 2014 2015 2016 2017 2018
Year

IDLC LankaBangla IPDC

Figure 21: Efficiency Ratio

Expenses
Formula: Efficiency Ratio = Revenue

Interpretation: Efficiency Ratio actually explain that the total overhead cost to get revenue in
percentage form. In 2017 the efficiency ratio of IDLC was 37.19%. That means to get revenue
IDLC expense is 37.19%. In overall situation IDLC is in balanced way. Where lankabangla‟s
expense is far higher to get revenue. So IDLC has good efficiency to utilize money to get
revenue. Overall lankabangla is failed to reduce their operating expenses. Where IDLC doing

45 | P a g e
this efficiently. Here IPDC also better thenLankaBangla. Because they also maintain their
operating cost.

5.4Loan Ratio:
LR(Loan 2013 2014 2015 2016 2017
Ratio)
IDLC 81.19% 79.88% 75.19% 78.46% 74.72%
LankaBangla 77.47% 77.68% 82.90% 80.15% 77.88%
IPDC 16.15% 73.31% 78.22% 86.29% 87.73%

Table: Loan Ratio

LR
100.00% (Loan Ratio)
79.88%
80.00%
77.47%
81.19% 80.15%77.88%
78.46%
82.90%
77.68% 75.19%
60.00% 74.72%
LR

40.00%

20.00%

0.00%
2012 2013 2014 2015 2016 2017 2018
Year
IDLC LankaBangla IPDC

Figure 22: Loan Ratio

Loan and advances

Formula: Loan Ratio: Total Assets

Interpretation: Loan Ratio actually explains that how much assets are in 3rd party‟s hand. In
2017 IDLC‟s Loan ratio was 74.72%. That shows that, they have 74.72 taka loan out of 100 taka
asset. That is not much good. But if we consider the last couple of years it was more except
2015. On the other hand lankabangla is in bad position. In 2015, 2016 the ratio was 82.90 &
80.15 percent. Now it is 77.88%. This is near to IDLC. But IDLC is tried to decrease this

46 | P a g e
situation. Here IPDC was very good position in 2013 but recent year their loan ratio was very
high.

Overall this situation is little bit alarming for three of the company.

5.4 Earnings Per Share

EPS 2013 2014 2015 2016 2017

IDLC 4.16 6.19 5.18 7.08 6.13
LankaBangla 4.58 2.08 1.75 2.88 5.97
IPDC 1.36 1.44 1.90 2.00 1.85
Table: EPS

Earnings Per Share

8
7
6
5
4
3
2
1
0
2013 2014 2015 2016 2017
IDLC LankaBangla IPDC

Figure 23: EPS

Implication: EPS shows that how much profit allocated to each share. Here we see that IDLC
was provided better EPS then LankaBangla& IPDC Finance. Every year IDLC was increasing
their EPS. In 2013 LankaBnagla was almost same to IDLC but in 2014 & 2015 they decrease
their EPS. Its means LankaBangla net income was decreased. On the other hand, IPDC was
maintaining a same EPS every year. But it was lower than IDLC &LankaBangla.

47 | P a g e
 Chapter 6

Recommendation& Conclusion

48 | P a g e
6.1. Recommendations:
The importance of SME is growing very high day by day. By this sector countries economy is
increasing faster. In recent calculation SME contributes almost 25 percent of the total GDP. It is
also reducing the unemployment by creating new employments. The contribution of the SME
sector is enormous. IDLC, IPDC &LankaBangla the three companies are very good in finance
industries. But the ratio indicates that IDLC little batter then the IPDC &LankaBangla in some
situation. So if IDLC wants to number one finance company they should improve some areas.

 IDLC requires more market research to serve new services or product according to
clients‟ requirement.
 For the agro financing purpose IDLC should make a new service or loan scheme. Where
Lankabangla is providing „Swarnaloi Loan‟ for the agro financing.
 To provide the information about SME loan, IDLC should conduct different seminars or
workshop in district level or rural areas.
 It is important to conduct some programs to provide clear information about the
requirements of loan. By this the customer will understand while they will take loan.
 For the urgent file they should response faster.
 There can be some program for interns like skill development.
 There are some bugs in internal database software. They need to focus on it. By this the
error problem will be lower.
 The demand of SME loan is increasing day by day. In future they might need different
new products. Management should concern about it.
 They should concern about their operating expenses in order to maximise their profit.
 ROE has little bit decrease in 2017. So they should concern about this. By this the
profitability will high.
 Data entry process should be faster.
 Services of loan requisition process need to be more flexible. By this they can serve more
people.
 To mitigate the risk they should invest in diversified portfolio.
 When the loan application comes more and more, sometimes it‟s difficult for the credit
analyst to analyse timely. So the manpower should be increased. Departments need to
concern about it.

49 | P a g e
Conclusion:
We know the role and importance of SME sector to develop the country‟s economies enormous.
That‟s way the demand of SME is increasing rapidly. One countries economic flow can be
change by this sector. Bangladesh is a place where there are enormous opportunities for short &
medium business. As the lacking of jobs, people are trying start their own business. By this, it is
beneficiary for the country. Because the unemployment rate reduces by the blessings of SME
sectors.

As the demand is increasing the loan against this sector is also increasing. To start the business
entrepreneurs need capital and to help the enthusiast entrepreneurs‟ banks& non-banks are
always ready to provide their service. IDLC is one of them to help the SMEs. They have
different types of services according the demand of clients.

IDLC finance is holding the leading position now in Bangladesh for their services. Their activity
and services are so fast. Their „Turnaround Time‟ is less than any other organizations. They are
also involved in different CSR activities. By this they are helping many people in rural as well as
urban people to develop the society. That‟s why they are the market leader. They should
continue their progress to help the SMEs and the economy of Bangladesh.

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 Chapter 7

Bibliography

51 | P a g e
7.1. References:
1. http://idlc.com/
2. http://lankabd.com/homepage
3. http://www.theindependentbd.com/printversion/details/121103
4. http://www.thedailystar.net/education-employment/smes-and-our-development-goals-
1366591
5. https://www.scribd.com/document/288576458/Role-of-SMEs-in-the-Economy-of-
Bangladesh
6. https://www.myaccountingcourse.com/financial-ratios/

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7.2. Appendix: SME Appraisal report:

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