...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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...financing Chapter 1: Background of the Study 1.1 Introduction The international trade activities are grown day by day. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community. Although banks also finance domestic trade, their role in financing international trade and payment system is more critical due to the additional complications involved. First, the exporter might question the importer’s ability to make payment. Second, even if the importer is creditworthy, the government might impose exchange controls that prevent payment to the exporter. Third, the importer might not trust the exporter to ship the goods ordered. Fourth, even if the exporter does ship the goods, trade barriers or time lags in international transportation might delay arrival time. Financial managers must recognize methods that they can use to make payment and finance international trade so that they can conduct exporting or importing in a manner that maximizes the value of a business. In any international trade transaction, credit is provided by the exporter, the importer, one or more financing institutions, or any combination of these. The supplier may have sufficient cash flow to finance the entire trade cycle, beginning with the production of the product until payment is eventually made by the buyer. In some cases, the exporter may require bank financing to augment its cash flow...
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...Lease financing was first introduced in Bangladesh in the early 1980s. Industrial development leasing company of Bangladesh ltd. (IDLC), the first leasing company of the country, was established in 1986 under the regulatory framework of Bangladesh Bank. It was a joint venture of the Industrial Promotion and Development Company of Bangladesh ltd. (IPDC), International Finance Corporation, and Korea development leasing corporation. Another leasing firm, the united leasing company ltd. started its operations in 1989. The number of leasing companies grew quickly after 1994 and by the year 2000, rose to16. The leasing business became competitive with the increase in the number of companies and wider distribution of their market share. There are, however, six other companies conducting leasing business in the country, although they do not use the word leasing in their names. in terms of money value, the leasing business in Bangladesh increased from tk 41.44 million in 1988 to tk 3.16 billion in 2000. Lease financing, as organized in Bangladesh, operates with the following objectives: • To assist the development and promotion of productive enterprises by providing equipment lease financing and related services • To assist in balancing, modernization, replacement and expansion of existing enterprises; • To extend financial support to small and medium scale enterprises • To provide finance for various agriculture equipment • To activate the capital market by operating as managers...
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...Introduction The Small and Medium scale Enterprise (SME) are recognized worldwide as engines of economic growth. The commonly perceived merits often emphasized for their promotion especially in the developing countries like Bangladesh include their relatively high labor intensity, dependence on indigenous skills and technology, contributions to entrepreneurship development and innovativeness and growth of industrial linkages. The case for fostering SME growth in Bangladesh is irrefutable as these industries offer bright prospects for creating large-scale employment and income earning opportunities at relatively low cost for the unemployed especially in the rural areas strengthening the efforts towards achieving high and sustained economic growth which are critically important prerequisites for triggering an exit from endemic poverty and socio-economic deprivation. These promotional arguments for the SMEs, while universally emphasized are often put forward by their ardent advocates in a small versus large context and thus arouse serious debates concerning their economic viability. Much of such controversies may, however breakdown if the intrinsic virtues specific to SMEs and unavailable to large-scale industries are correctly identified and carefully exploited. A combined interaction of the forces of product-mix, location factors, technological advantages and market advantages create opportunities for SMEs to grow and prosper at all levels of development which are often ignored...
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...Lease Financing Lease is a contract between the owner and the user of assets for a certain time period during which the second party uses an asset in exchange of making periodic rental payments to the first party without purchasing it. Under lease financing, the lessee regularly pays the fixed lease rent over a period of time at the beginning or at the end of a month, 3 months, 6 months or a year. At the end of the lease contract the asset reverts to the real owner. However, in case of long-term lease contracts, the lessee is generally given the option to buy the leased asset or renew the lease contract. The three major types of leases are the operating lease, financial/capital lease and the direct financing lease. The operating lease is a short-term lease contract where the lessor bears all operating and repairing costs of the asset and the lessee pays periodic rental payments to the lessor, and where the lease is cancelable, and there is no bargain purchase option. Financial/capital lease is a long-term lease contract where the lessee bears all operating, repairing and maintenance costs, and makes periodic rental payments to the lessor. The lease is not cancelable and the lessee has the option for bargain purchase or renewal of lease contract at the end of the original lease period. In a direct financing lease, the lessor leases the asset by manufacturing or by purchasing from the manufacturer to the lessee directly and the lessee makes regular rental payments to the lessor...
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...Draft Final Report E-Commerce in Bangladesh: Status, Potential and Constraints Najmul Hossain December 2000 A report prepared for JOBS/IRIS Program of USAID. The author gratefully acknowledges comments received from Thierry Van Bastelaer, Catherine Mann, Dewan Alamgir, Asif Khan, Abu Saeed Khan, Tahmina Begum, Shabnam Nadiya and Tonmoy Bashar. The views and analyses in the paper do not necessarily reflect the official position of the IRIS Center, the University of Maryland or that of USAID. E-Commerce in Bangladesh: Status, Potential and Constraints ACRONYMS ASM B2B B2C B2G BB BGMEA BTRC BTTB CS DDN DFID DI DSL e-commerce EDF EFT e-mail e-market FDI GOB GSP IDA IOC IPO IPR IRIS ISO ISP IT ITU JOBS L/C LCA LMDS MMDS MOPT NIP OECD OSP Asian Sources Media Group Business-to-Business Business-to-Consumers Business-to-Government Bangladesh Bank Bangladesh Garment Manufacturers and Exporters Association Bangladesh Telecommunications Regulatory Commission Bangladesh Telegraph and Telephone Board Contract System Digital Data Network Department For International Development Data International Digital Subscribers Line Electronic Commerce Export Development Fund Electronic Fund Transfer Electronic mail Electronic Market Foreign Direct Investment Government of Bangladesh Generalized System of Preferences International Development Association International Oil Companies Import Policy Order Intellectual Property Rights Center for Institutional Reform and the Informal Sector at...
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...Role of SMEs Export Growth in Bangladesh Md Shafiqur Rahman Senior Research Officer, Federation of Bangladesh Chambers of Commerce and Industry Abstract: Small and medium enterprises (SMEs) occupy unique position in most of the countries especially in a developing country. They are a primary target for many countries desiring to stimulate economic growth and development. The SMEs sub-sector plays an increasingly dominant role in the technology assimilation and dissemination and in economic development in Bangladesh as well. The emphasis being put on the SMEs has increased greatly now that the time is coming nearer that Bangladesh will have to document its status of implementing actions to achieve the Millennium Development Goals (MDGs) such as eradication of extreme poverty, sustainable industrial development and developing a global partnership for business competitiveness etc.. This paper attempts to render the fundamental concepts of right choice of export development strategy, and the level and process of problems in SMEs sub-sector. It explores the mode, mechanism and management of export growth for SMEs. 1.0 Introduction In Bangladesh, SMEs playing a significant role for the development of our economy by creating employment opportunity and producing important alternative machines and machinery parts for saving huge foreign currency for our country. So as a part of our development strategy, we should intensify our efforts to develop this sector to grow industrial base...
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...Institutional Financing of SME in Bangladesh [pic] [pic] TERM PAPER ON Institutional Financing of SME in Bangladesh Submitted By: ID- Program- BBA Premier University, Chittagong Submitted in partial fulfillment of the requirements for the Bachelor of Business Administration. Submitted To: Ms. Nilufar Sultana Lecturer, Dept. of Finance & Banking, Faculty of Business Studies, Premier University, Chittagong. DATE OF SUBMISSION: /09/2012 Letter of Transmittal Date: To Ms. Nilufar Sultana Faculty of Business Studies Premier University, Chittagong Sub: Letter of Transmitter on Term Paper Dear Madam, This is my pleasure to submit my term paper report on “Institutional financing of SME in Bangladesh” which I was assigned. It was a great opportunity for me to acquire knowledge and experience in respect of the functions, procedures and operational activity, other than my topic of study. I have concentrated my best efforts to achieve the objectives of the assignment study and hope my endeavor will serve the purpose. However, I will always be ready to provide any further clarification that you may require. Sincerely Yours, ID# Program: BBA Batch Number: 16 8th Semester Section: Major:...
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...International Journal of Islamic Financial Services Vol. 1 No.3 ISLAMIC BANKING IN BANGLADESH: PERFORMANCE, PROBLEMS & PROSPECTS Md. Abdul Awwal Sarker Islamic banks can provide efficient banking services to the nation if they are supported with appropriate banking laws, and regulations. This will help them introducing PLS modes of operations, which are very much conducive to economic development. It would be better if Islamic banks had the opportunity to work as a sole system in an economy. That would provide Islamic banking system to fully utilize its potentials. Studies show that Islamic banks can not operate with its full efficiency level if it operates under a conventional banking framework, their efficiency goes down in a number of dimensions. The deterioration is not because of Islamic bank’s own mechanical deficiencies. Rather it is the efficiency-blunt operations of the conventional banking system that puts obstructions to efficient operation of Islamic banks. This does not mean that the survival of Islamic banks operating within the conventional banking framework is altogether threatened. Evidences from Bangladesh indicate that Islamic banks can survive even within a conventional banking framework by which over from PLS to trade related modes of financing. The Genesis of Islamic Banking in Bangladesh At birth, Bangladesh inherited an interest based banking system, which was introduced here earlier when the country was a part of British Colony. Since its...
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...new horizon for trade and commerce, namely electronic commerce (e-commerce). E-commerce entails the use of the Internet in the marketing, identification, payment and delivery of goods and services. This paper highlights the status, statutes, potential and constraints to e-commerce development in Bangladesh. Both the statutory laws as well as the challenges in implementing them are discussed. Major legal, regulatory and institutional constraints to e-commerce are identified. The paper also lists specific policy changes aimed at bringing improvements to the legal and regulatory environment affecting e-commerce. Dimensions of E-Commerce The three dimensions of e-commerce are Business-to-Consumers (B2C), Business-to Business (B2B) and Business-to-Government (B2G). B2C e-commerce is unlikely to be of much use in the near future in Bangladesh because of low per capita income, a weak infrastructural and legal environment, lack of trust between business and consumers. B2C for cross border trade is also limited by the factors suggested for the domestic front. In addition, non-availability of international credit cards, foreign currency remittance restrictions, delays and informal payments at customs clearance even for small value and quantity items will discourage B2C. The B2B application already exists in the export sector of Bangladesh, especially in the Ready Made Garments (RMG) industry. RMG has the lion’s share of the export earnings in Bangladesh. The RMG sector...
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...policy can be directed yet more efficiently to further improve competitive advantage of Canada's SMEs. In particular, the baseline survey associated with the SME FDI is an extraordinarily valuable research undertaking. It provides the potential to assess directly the extent to which financing gaps might occur in the capital markets on which SMEs rely. This is an important issue in practical terms, in terms of the role of public policy, and in terms of economic and finance theory. The SME FDI baseline survey data provides, for the first time internationally, a means of empirically testing Nobel prize-winning ideas related to information asymmetry and capital rationing. The data provides a means of providing yet better guidance for public policy with respect to addressing potential capital market imperfections that might constrain growth and economic development of SMEs. As designed, the research initiative can and will provide valuable information about these issues. In summary, the baseline survey undertaken as part of the SME FDI is a potentially invaluable resource with respect to the design, targeting, implementation, and follow-up assessment of public policy approaches to nurturing SME growth and viability. The outcomes of this research process could help Industry Canada and its partners to provide Canadian SMEs with substantial competitive advantage through policy measures that are yet more precisely targeted, effective, and efficient. It is therefore essential that this...
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...When Bangladesh came into existence on the 16th December, 1971, the banking sector of Bangladesh was in a total disarray. With the exception of two local banks incorporated in then East Pakistan, all the bigger local banks became in operational. Starting with such a humble condition, the Banking Sector of Bangladesh has grown to a great extent. The banking industry in Bangladesh has flourished over the years, making double-digit profit percentages, sustaining growth and surviving cut-throat competition while providing attractive returns to shareholders. The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are Nationalized Commercial Banks (NCBs), 28 local private commercial banks, 12 foreign banks and the rest five are Development Financial Institutions (DFIs). Sonali Bank is the largest among the NCBs while Pubali is leading in the private ones. Among the 12 foreign banks, Standard Chartered has become the largest in the country. The number of total branches of all scheduled banks is 6,038 as of June 2000. Of the branches, 39.95 per cent (2,412) are located in the urban areas and 60.05 per cent (3,626) in the rural areas. Of the branches NCBs hold 3,616, private commercial banks 1,214, foreign banks 31 and specialized banks 1,177. [pic] Janata Bank is a state-owned commercial bank of Bangladesh established in 1971. Its headquarter is situated at Motijheel in Dhaka, the capital city of Bangladesh. Immediately after the emergence of Bangladesh...
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...The role of Financial Market and Institution in the Economic Development of Bangladesh Financial market Financial market is created to satisfy particular preferences of market participants.Financial markets transfer funds from those who have excess funs to those who needfunds. That is they facilitate the transfer of funds from surplus unit to deficit unit .Because funding needs vary among deficit units, various financial markets have beenestablished. The primary market allows for the issuance of new securities, while thesecondary market allows for the sale of short term securities, while capital marketsfacilitate the sale of long term securities.The main participants of financial market can be classified as households, businesses andgovernment agencies. Those participants who provide funds to the financial markets arecalled surplus unit . Households are the main type of surplus unit. Participants who usefinancial markets to obtain the funds are called the deficit unit . Money market: Money market an integral part of the financial market of a country. It provides a mediumfor the redistribution of short term loan able funds among financial institutions, which perform this function by selling deposits of various types, certificate of deposits anddiscounting of bills, treasury bills etc. The participants in the money market are: thecentral bank, commercial banks, the government, finance companies, contractual savinginstitutions like the pension funds, insurance companies...
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...1. Introduction 1.1 Background Bangladesh is the third largest Muslim country in the world with around 135 million populations of which 90 percent are Muslim. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur'an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the percepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, as the first of its kind in Southeast Asia, was the true reflection of this inner urge of its people. It was both a hope and a challenge to the Islam loving people of the country in general and the pioneers of the Islamic banking movement to make it a success. In the beginning there was some doubt in the minds of many people about the viability as well as the sustainability of the Islamic banking system. But the history of two decades of Islamic banking operation in Bangladesh not only removed this doubt from the minds of the people but also showed how a new banking concept based on Islamic values could so rapidly establish itself as the most modern, dynamic, and popular bank of the country. Within this short span of time the workforce of Islamic banks in Bangladesh in general and Islami Bank Bangladesh Limited, in particular, by their strong commitment and tireless effort have been able to prove the superiority of Islamic banking over conventional banking in every department of banking operations...
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...An Assignment on Investment Management [FIN 364] Capital Market of Bangladesh Submitted to: Farhana Rahman Lecturer, School of Business UITS Submitted by: Shakerul Islam Tazu ID. 09510127 Eamin Zabed ID. 09510082 Farhana Yeasmin Lopa ID. 09510189 Rawnak Razzak ID. 08310026 UNIVERSITY Of Information Technology & Sciences Baridhara, Dhaka ------------------------------------------------- LETTER OF TRANSMITTAL December 18, 2010 Ms. Farhana Rahman Faculty of Business Administration School of Business UITS Subject: Submission of the Assignment on “Capital Market of Bangladesh”. Dear Madam, It is a great pleasure for us that we have the opportunity to submit the assignment on “Capital Market of Bangladesh”. We have tried our level best to put meticulous effort for prepare this assignment. Any shortcomings or fault may arise as our unintentional mistakes. We will wholeheartedly welcome any clarification and suggestion about any view and conception disseminated through this assignment. Thank you. Yours Sincerely, Shakerul Islam Tazu ID. 09510127 Eamin Zabed ID. 09510082 Farhana Yeasmin Lopa ID. 09510189 Rawnak Razzak ID. 08310026 ------------------------------------------------- Aknowledgement One of the most pleasant parts of writing this report is the opportunity to thanks those who have contributed to it. Unfortunately, in any establishment, the list of expression of thanks- no matter how all-embracing-...
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