...Introduction What is Financial Institution? In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries. Most financial institutions are highly regulated by government. Broadly speaking, there are three major types of financial institutions: • Deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies; • Insurance companies and pension funds; • Brokers, underwriters and investment funds. Functions of a Financial Institution: The functions of Financial Institutions are: • Financial institutions provide service as intermediaries of the capital and debt markets. • They are responsible for transferring funds from investors to companies in need of those funds. • Financial institutions facilitate the flow of money through the economy. To do so, savings a risk brought to provide funds for loans. Such is the primary means for depository institutions to develop revenue. Should the yield curve become inverse, firms in this arena will offer additional fee-generating services including securities underwriting, and pre. Regulation Structures of Financial Institutions: Financial institutions in most countries operate in a heavily regulated environment as they...
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...Chapter: Development Studies Rural Development The economy of Bangladesh is based on agriculture. When the question of development arises in this society, the question of rural development comes automatically. It has been accorded the highest priority in our development strategy. It aims at qualitative change in the life pattern of our people. Definition of Rural Development: Rural development is the betterment in the totality of life for rural people. According to World Bank (2006), “Rural development is a strategy designed to improve the economic and social life of a specific group of people-the rural poor.” The Objectives of Rural Development: The objectives encompass improved productivity, increased employment and thus higher incomes and health. A national programme of rural development should include a mix of activities, including to projects to raise agricultural output, create new employment, improve health and education, expand communications and improve housing. Importance of Rural Development: For a country like Bangladesh, rural development is important. The reason behind this is that most of the people of the country are living in the villages. There is a direct link between the rural development and the development of our national economy. The rural sectors contribute about two-thirds of the GDP. We can achieve our cherished goal of financial development by the development of our villages which hold the key to our success. Specific Targets of...
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...Conclusion Bang vs india The village communities of Bangladesh are generally more socially and economically homogeneous and less divided by caste than their counterparts in most Indian villages. Hence, it is easier to form groups that would follow a standardized procedure. This makes it easier to operate with the Grameen system in Bangladesh than in India. It is observed that the Grameen system is better suited for more densely populated areas. There are parts of India which are as densely populated as Bangladesh, and some of the Northern hill tracts, and some part of the Sundarbans, are fairly thinly populated. The population density in India is a little higher than 1/3rd that of Bangladesh. In the Grameen system, the groups avail micro-financial services from the Bank, while the SHGs are effectively a microbank carrying out their own savings mobilization and lending. The basic difference in the approaches of the Grameen system and the SHG model is that the former starts with microcredit and then graduates to micro-savings, while the SHG model is based on the concept of micro-savings leading to micro-credit. Thus, the SHG model is more sustainable from viability point of view. Though both the models are for the poor, yet Grameen system is more suited to the very poor category of people who may not have sufficient fund to generate the initial savings required in the SGH system. Unlike Bangladesh, India has a good network of commercial banks with almost 70% of the 80,000-odd...
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...A SIMPLE REPRESENTATION OF THE ACTIVITIES OF MICRO FINANCE INSTITUTIONS Annesha Zeheen Introduction This paper attempts to graphically present a simplified version of the activities of a microfinance institution (MFI) with a view to facilitating our understanding of its activities and role in economic development, creating an enabling environment for MFIs to work, promoting and fostering sustainable development of microfinance institutions and comprehending the need and ways to regulate them. The main function of a microfinance institution is to provide sustainable financial services mainly to the small borrowers and clients. Intially 5 to 6 like-minded persons mostly women organize a Group, several groups make a Center. Usually memebrs have to attend the weekly meetings and deposit weekly savings. The loans are mostly provided against little or no collateral, but repayment rate is generally commendable because of the peer pressure originated from members of groups. MFIs’ services are not limited to credit, but include savings, insurance, money transfers and others. The credit-deposit methods include group-lending and -liability, short repayment period with frequent installments, pre-loan savings requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly[1]. (Microfinance Gateway 2009). Borrowers take micro-loans for starting or expanding small busenesses, fro the profit of...
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...Overview of Financial system of Bangladesh The financial system of Bangladesh is comprised of three broad fragmented sectors: Formal Sector, Semi-Formal Sector, Informal Sector. The sectors have been categorized in accordance with their degree of regulation. The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs). The semi formal sector includes those institutions which are regulated otherwise but do not fall under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non Governmental Organizations (NGOsand discrete government programs. The informal sector includes private intermediaries which are completely unregulated. [pic] The financial market in Bangladesh is mainly of following types: Money Market: The primary money market is comprised of banks, FIs and primary dealers as intermediaries and savings & lending instruments, treasury bills as instruments. There are currently 15 primary dealers (12 banks and 3 FIs) in Bangladesh. The only active secondary market is overnight call money market which is participated...
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...[pic] |Background | BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) registered under the Companies Act 1913 on the 2nd of August, 1988, started its operations from the 21st of January ,1989. It is governed by the Banking Companies Act 1991. The Bank was established as the policy makers of the country felt the urgency for a bank in the private sector for financing small scale Industries (SSIs). At the outset, the Bank started as a joint venture enterprise of the BCC Foundation with 70 percent shares and the Government of Bangladesh (GOB) with the remaining 30 percent shares. The BCC Foundation being nonfunctional following the closure of the BCCI, the Government of Bangladesh took over 100 percent ownership of the bank on 4th June 1992. Thus the Bank is state-owned. However, the Bank is not nationalized; it operates like a private bank as before. BASIC Bank Limited is unique in its objectives. It is a blend of development and commercial banks. The Memorandum and Articles of Association of the Bank stipulate that 50 percent of loanable funds shall be invested in small and cottage industries sector. |Present Chairman |Mr. Sheikh Abdul Hye Bacchu | |Present Managing Director |Mr. Kazi Faqurul Islam | Capital Position |Authorized capital |Tk. 2000.00 million | |Paid up capital...
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...from depending on donor funding and grants - ASA's Microfinance Model gradually transformed itself to become the globally renowned "ASA Cost–effective and Sustainable Microfinance Model." Following this model, ASA became self-sustainable within a short span of time and the organization declared itself a "donor free MFI" in 2001. This model, that has been practiced and perfected in the field by ASA, has proved effective in making a branch self-reliant within 12 months. Any MFI that adopts this model for operations becomes sustainable within the shortest possible time. It has been adopted by many MFIs around the world to get result within the shortest possible time. As of October 2011, ASA has successfully extended its outreach in Bangladesh through 3,164 branches and its 21,298...
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...ROLE OF NGO IN POVERTY REDUCTION OF BANGLADESH BASED ON A 2013 SURVEY OF NGO ACTIVITIES IN BANGLADESH ROLE OF NGO IN POVERTY REDUCTION OF BANGLADESH BASED ON A 2013 SURVEY OF NGO ACTIVITIES IN BANGLADESH Prepared for Ms. Kohinoor Biswas Assistant Professor Department of Business Administration East West University, Dhaka. Prepared by Muhammad Kawsar Khan ID: 2011-1-10-411 Section: 02 April 17, 2014 April 17, 2014 Ms. Kohinoor Biswas Assistant Professor Department of Business Administration East West University Subject: Submission of assignment on Role of NGO in Poverty Reduction of Bangladesh Dear Madam, This is a great pleasure for us to submit an assignment on ‘Role of NGO in Poverty Reduction of Bangladesh’. We considered your remarks and instructions very carefully while preparing this report. We have tried to visualize all the areas related to this topic. We also used your lecture to fulfill your requirements. We would like to express our heartiest gratitude to you for your tiresome efforts for us which provided us the opportunity to prepare this report. We have tried our level best to present this assignment according to the vital standard and requirements. While preparing this report we have enriched our knowledge a lot about role of NGO in poverty reduction in Bangladesh. We appreciate this opportunity to demonstrate ore educational and analytical skills. Thank you. Sincerely yours, Muhammad Kawsar Khan ...
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...Financial support for MSME in Bangladesh The SMEs worldwide are recognized as the most effective vehicle for sustainable economic growth. In Bangladesh , a sustainable level of development of small and medium enterprises (SMEs ) is highly needed to reach the targets set by The United Nations (UN) in the millennium Development Goals (MDGs) to alleviate poverty . This urgency is reflected in the Government’s pro-poor policies, especially in the poverty reduction strategy paper (PRSP) . Small and Medium Enterprises in Bangladesh have recently been considered as an important vehicles of poverty reduction strategy. For the first time, the comprehensive Industrial Policy 2005 highlighted SME development as a flagship policy area for balanced and sustainable industrial development in Bangladesh. Availability of finance is thought to be a major constraint to formation and growth of SMEs in Bangladesh. Banks are reluctant to expand their SME credit portfolio because they do not consider SME lending an attractive and profitable undertaking. This is so because SMEs are regarded as high risk borrowers because of their low capitalization, insufficient assets and their inability to comply with collateral requirements of the banks. Administrative costs are also higher because close monitoring and supervision the SME operation becomes necessary. Despite all these facts banks and financial institutions have been providing finance to the SME sector and the volume of finance is showing...
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...NGO Promoted Microcredit Programs and Women's Empowerment in Rural Bangladesh Introduction: Nongovernmental organizations (NGOs) in rural Bangladesh are reaching out to poor women with collateral-free credit programs aimed at both alleviating poverty and increasing women's status. The present study investigated the hypothesis that participation in credit-related activities by NGO credit members leads to greater empowerment of credit members compared to nonmembers. Objectives: To measure the status of empowerment of rural women (both members and non members of the micro-credit organization) in the selected areas To ascertain the factors related to empowerment of women and To assess the role of the micro-credit organizations in empowering rural women in Bangladesh The main objective in this paper was to determine the important factors that contribute to women’s economic success in microcredit programs Women Empowerment: Empowerment refers to increasing the spiritual, political, social or economic strength of individuals and communities. It often involves the empowered developing confidence in their own capacities. empowerment of women, also called gender empowerment, has become a significant topic of discussion in regards to development and economics. Entire nations, businesses, communities, and groups can benefit from the implementation of programs and policies that adopt the notion of women empowerment.[1] Empowerment is one of the main procedural concerns when addressing...
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...Table of Contents Chapter 1 1.1 introduction 3 1.2 Background of the study 4 1.3 objectives of the study 4 1.4 Scope of the study 4 1.5 Methodology of the study 5 1.6 Limitation 5 Chapter 2 2.1 An Overview of the Specialized Banks of Bangladesh 6 2.2 Significance of Specialized Banks 28 Chapter 3 3.1 Performance Evaluation of Specialized Banks in Bangladesh 29 3.2 Recommendation 32 Chapter 4 4.1 Conclusion 33 4.2 Reference 34 4.3 Appendix 36 Chapter 1 1.1 Introduction: Banks are very old form of financial institution that channel excess funds from surplus unit to deficit unit in consideration of a price called Interest. Banking business definitely established on a relationship of Debtor-Creditor between the surplus unit called depositors and the bank and between the deficit unit called borrowers and the bank. Here, opportunity cost of money works as interest is considered the price of the credit. For the development of an economy, bank furnishes a huge contribution and modern economy cannot be imagined without the services of bank. Economic development of a country requires a well organized, smooth, easy to reach and efficient saving-investment process. The function of a single bank is not limited to its geographical region only rather it has reached beyond the border of the country. So, banking business has been shaped as global business...
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...School of Business United International University FINANCING OPTIONS FOR SMALL AND MEDIUM ENTERPRISES (SMES): EXPLORING NON-BANK FINANCIAL INSTITUTIONS AS AN ALTERNATIVE MEANS OF FINANCING THE CASE OF BANGLADESH Submitted To Submitted By James Bakul Sarkar Md. Moniruzzaman Assistant Professor ID: 111091381 School of Business Bachelor of Business Administration Bachelor’s Degree Thesis in Business Administration ACRONYMS SMES SMALL AND MEDIUM-SIZED ENTERPRISES NBFI NON BANK FINANCIAL INSTITUTIONS. FFS FORMAL FINANCIAL SYSTEM IFS INFORMAL FINANCIAL SYSTEM FMF FEDERAL MINISTRY OF FINANCE CBN CENTRAL BANK OF NIGERIA NDIC NIGERIAN DEPOSIT INSURANCE CORPORATION SEC SECURITIES AND EXCHANGE COMMISSION NIC NATIONAL INSURANCE COMMISSION FMBN FEDERAL MORTGAGE BANK OF NIGERIA NDIC NIGERIA DEPOSIT INSURANCE CORPORATION SEC SECURITY AND EXCHANGE COMMISSION NAICOM NATIONAL INSURANCE COMMISSION ABSTRACT TITLE: FINANCING OPTIONS FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SMES): EXPLORING NON-BANK FINANCIAL INSTITUTIONS AS AN ALTERNATIVE MEANS OF FINANCING. AUTHOR: Md. Moniruzzaman SUPERVISOR: James Bakul Sarkar DEPARTMENT: School of Business, United International University COURSE: Bachelor’s Thesis...
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...INTRODUCTION 1. Overview The chapter will constitute Background of the study, statement of the problem, objectives of the study, research questions, significance of the study, scope of the study, limitations of the study and conceptual frame-work of the study. 2. Background to the study The micro finance business embraced today arose in Bangladesh in 1976 with the founding of the Grameen Bank. It became popular in the 1980s s a response to doubts and research findings about a state delivery of subsidized credit to the poor farmers. According to Ledgerwood (2001), prior the 1980s government agencies were the predominant avenue for providing productive credit to those with no previous access to credit facilities. Their services had and still have limited access, because they need collateral as a requirement for getting a loan and the transaction costs are so high. Governments and international donors assumed that the poor required cheap credit and saw this as a way of promoting agricultural production by small landholders. Since the 1980s the fields of Micro finance (MF) has grown substantially. Donors actively support and encourage micro finance activities focusing on micro finance institutions (MFIs) that are committed to achieving substantial outreach and financial sustainability. In Uganda, the health of the financial sector has been impaired by political and social turmoil. It was indicated that the troubles of the 1970s and early 1980s produced a severe contraction...
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...Status of Women Entrepreneurs In Bangladesh 1. Background of the Survey 1.1 Women in Bangladesh Bangladesh is a resource-limited and overpopulated country where society is highly stratified, services and opportunities are determined by gender, class and location. However, women make nearly half of the population (Table -1), which means huge potential to be utilised for socio -economic development of the country. Table -1 Population Status of Bangladesh Census From 1998 Total Male Female 1262000 64819000 61381000 00 Share at Total Population Share at Total (%) Population (%) 51.48% 49.52% 51.36% 48.64% Source: Statistical Pocketbook, Bangladesh ’99, Bangladesh Bureau of Statistics, Government of the People’s Republic of Bangladesh, Dhaka 1999, Page 85. Total 10631500 0 Sex and Age-based Structure of the Population (Table-2) shows that like the male population of the country, the women represent a vast resource for the country. They must be provided equal opportunity in education, employment and economic activities, only then this resource could be utilised properly. Table -2 Sex and Age-based Structure of the Population 1996 Age-base Group Total Population (%) Male Population (%) Female Population (%) 10-14 Years 12.6 12.52 11.58 15-19 Years 8.52 8.41 8.65 20-24 Years 8.40 7.60 9.25 25-29 Years 6.10 7.92 9.11 30-34 Years 4.25 6.10 6.10 35-39 Years 3.25 5.87 5.14 40-44 Years 2.89 4.40 4.09 Source: Statistical Pocketbook, Bangla desh ’99, Bangladesh Bureau of Statistics, Government...
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...Case study Bangladesh: Financial Linkages in Bangladesh Abdul Awal, Director, CDF Abstract: Microfinance in Bangladesh has almost reached the stage of a matured market. However, there are still substantial segments of potential clientele who are not serviced by any microfinance organization (MFI). Inadequate finance is one of the most important reasons MFIs have not reach these clients. Fund shortage is more prevalent among the smaller MFIs. Moreover, due to the scaling up of microenterprises of the existing clients, they are requiring larger loan amounts. On the other hand, though the formal financial organizations are burdened with significant amounts of excess liquidity, they are not in a position to directly provide services to microcredit clients - it is not viable. Even funding operations of smaller MFIs directly, are out of their reach. In such a situation, an effective linkage between the MFIs with financial constraint and banks with excess liquidity is a simple but highly effective solution. Introduction Poverty has always been on the development agenda in Bangladesh. In the history of this country, poverty has been rampant and presently Bangladesh is third in terms of number of poor following India and China. It is a densely populated country of only 150,000 square kilometers and a population of around 140 million. The country consists mainly of a flat delta plain. In addition to its very high population density, the country has a limited natural resource base and is...
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