...Executive summary In this paper, an attempt is made to delineate the deficiencies of the existing financial system in Bangladesh to cater to financing needs of SMEs or new potential entrepreneurs and a proposal has been given to develop the venture capital industry to meet financing and non-financing needs of SMEs. SMEs play a vital role within Bangladesh’s economy in terms of creation of industrial outputs and generation of employment. Even though they play a significant role they face problems in securing investment or manage finance to develop their ideas or to expand their existing business. It is not possible for Bangladesh to accelerate economic growth without catering to the financing needs of SMEs, Thus, the paper proposes the development of the venture capital industry as an additional financial intermediary to Cater to financing and non-financing needs of SMEs. The paper discusses available sources of finance for SMEs and the Constraints of these sources. There are basically three sources from which SMEs may receive finance. These are banks, non-government organizations (NGOs) and the capital market. Then, we discuss the advantages that venture capitalists have over banks in catering to the funding needs of SMEs. It is argued that venture capitalists perform the role of ‘active investors’ by way of offering both financial and non-financial commitment to the investee company, which is essential in a market characterized by a high level of uncertainties. Also, it is argued...
Words: 3834 - Pages: 16
...CRAB Rating Scale CRAB Long Term Rating Scale CRAB Short Term Rating Scale CRAB Long Term Rating Scale Rating Methodologies: It’s different for several sectors. Such as several methodologies for bank rating, financial institution rating, corporate rating, general insurance rating, life insurance rating, government owned enterprise rating and securitization rating. Other services: 1. Grading Services 2. Advisory & Consulting Services 3. Information Service National Credit Ratings Ltd National Credit Ratings Limited (NCR) is a credit rating agency in Bangladesh. It was incorporated as a public limited company under the Registrar of Joint Stock Companies in August 2010 and received its certificate for commencement of business in July 2010. It was granted a licence by the Securities & Exchange Commission (SEC) of Bangladesh for operating as a credit rating company in September 2010. The formal launching of the company was held on 18 October 2010. Managing director & CEO: MD. Momin Ullah Patwary, BP, is a former secretary to the Govt. of Bangladesh. Services: The services provide by the agency are followings: Entity Rating, Instrument Rating, Insurance Company rating, Asset Manager Rating, Sectoral Grading and Ranking. Methodology A true and fair opinion is our responsibility. NCR gives opinion as to the ability of an entity to meet its financial obligations. The rating process primarily concentrates on business and financial risks...
Words: 2113 - Pages: 9
...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...
Words: 7518 - Pages: 31
...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:...
Words: 8191 - Pages: 33
...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 in Business Administration. BACKGROUND AND PROBLEM DISCUSSION: Small and medium sized enterprises (SMEs) are...
Words: 13904 - Pages: 56
...Letter of Transmittal March 22, 2016 Dr. Salehuddin Ahmed Faculty Masters of Business Administration BRAC University Subject: Submission of project paper on “Venture Capital Firm” Dear Sir, We are pleased to present our project paper of startup of a “Venture Capital Firm” after a long and rigorous teamwork. We have tried to integrate the knowledge that you have imparted upon us into various topics in the report. This report consists of the overview of our venture capital firm “SEED”.. We hope that you would be kind enough to have your insight in our paper .We will be glad to answer any of your queries regarding the study and report. Sincerely Yours Acknowledgement At first we would like to express our gratitude to Almighty Allah who makes us able to prepare this project paper with good health and sound mind. Then we would like to express our deepest gratitude and warmest appreciation to our research supervisor Dr. Salehuddin Ahmed, whose assistance and guidance was outstanding for the successful completion of this project paper. Without his help, it was impossible for us to complete this project paper. His excellent method of guiding helped us to understand this critical title easily. We also thanked him for kindly assigning us such a nice and significant title which we are always supposed to remember gratefully. Table of Content Section | Page No. | 1. Background and justification of the project | | 2. Objectives of the...
Words: 4439 - Pages: 18
...2012), PP 18-29 www.iosrjournals.org Promoting Women’s Entrepreneurship through SME: Growth and Development in the context of Bangladesh Afiya Sultana * Lecturer, Faculty of Business Administration, University of Science and Technology Chittagong, Post Box- 1079, Chittagong, Bangladesh. Abstract: Women’s entrepreneurship is an inevitable part of country’s economic development process. The main objective of this study is to having an overview of women entrepreneurs in Bangladesh and growth situation through SME. The issue covered by this study are socio-demographic profile of women entrepreneur, types of women owned entrepreneur, regulatory procedures, training and capacity building and human resources development through women’s empowerment. The study also focused on role of SME to promoting women entrepreneurs. It also explores the social perspective of women entrepreneurs as well as the impact of these entrepreneurs on the economic development of Bangladesh. Both qualitative and quantitative research methods adapting with primary data collection process were applied to explore information from sample unit of women entrepreneur of Chittagong region in Bangladesh. A semi structured questionnaire survey was conducted to collect primary data. Data were analyzed using various statistical software including SPSS, MS Excel. The findings shows that women’s entrepreneurship of Bangladesh is growing at accelerate rate and their contribution to socio- economic development...
Words: 4472 - Pages: 18
...V, Issue– 02, July-December, 2010 Problems and Prospects of SMEs Loan Management: A Study on Mercantile Bank Limited, Khulna Branch S. M. AKTERUJJAMAN 1 Abstract SMEs all over the world have been playing a crucial role in promoting economic development as well as industrial production. SME financing has been identified as a major obstacle to SME growth. Unfortunately, the issue seems to be as unresolved as it always has been. Though the majority of the issues are with the SME themselves, the banks also have major issues in designing financial products for the SMEs. This study tries to find out the underlying problems from the bank’s perspective. The major findings are related to the high interest and loan duration rates, reasons for SMEs relatively informal way of doing business in contrast to bank’s formal procedures and prerequisites, bank’s relative inexperience in this field. They are also related to the bank’s lack of perspective, the viability and benefits of cluster unity, approach to informal loan takers and non-usage of modern technology and accounting procedures. The recommendations were provided based on the analysis and findings. Key words: Small and Medium Enterprises (SMEs), Financing, Loan, Technology, Cluster. 1. INTRODUCTION Small and medium enterprises (SMEs) all over the world have been playing a crucial role in promoting economic development as well as industrial production. In particular, SMEs provide the necessary foundations for sustained growth and rising...
Words: 3816 - Pages: 16
...Enterprises (SMEs) play a pivotal role in poverty alleviation and rapid industrialization of the developing countries like Bangladesh. In this paper we tried to appraise the Problems and Prospects of SMEs in Bangladesh. We observed from the research that non availability of adequate credit, complex loan granting procedure, inadequate infrastructure facilities, problems of collateral requirements, paucity of working capital, non availability of skilled work force, poor salary structure, lack of coordination among SME related organizations, lack of appropriate marketing strategies etc. are the major hindrances to the development of the SMEs in Bangladesh. In order to overcome the problems researchers have tried to provide some recommendations for the developments of SMEs in Bangladesh based on sound reasoning. Background of the Assignment Small and Medium Enterprises (SMEs) act as a vital player for the economic growth, poverty alleviation and rapid industrialization of the developing countries like Bangladesh. SMEs are significant in underlying country’s economic growth, employment generation and accelerated industrialization. Government of Bangladesh has highlighted the importance of SME in the Industrial Policy-2005. SMEs have been identified by the Ministry of Industries as a ‘Thrust sector’. As the SME sector is labor intensive, it can create more employment opportunities. For this reason government of Bangladesh has recognized SME as a poverty alleviation tool. SMEs also foster...
Words: 3435 - Pages: 14
...OVERVIEW 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. 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 and volume of foreign trade. As we know the in this age of globalization, it is impossible to stop the flow of foreign goods to any country. Only quality products can meet the challenges in global market. For meeting this situation SMEs need to upgrade their technological capabilities and production facilities in order to produce quality products at a competitive price. DEFINITION Small and medium enterprises or small and medium-sized enterprises (also: Small and Medium-sized Enterprises; acronym in the plural: SMEs; small and medium businesses or small and medium-sized businesses, acronym: SMBs; and variations thereof) are companies whose headcount or turnover falls below certain limits. Enterprises Fixed Capital Investment Employees Small ≤Tk.100...
Words: 5315 - Pages: 22
...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...
Words: 4586 - Pages: 19
...also called small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. These are the most common businesses found across most of the world’s economies. The World Bank Review on Small Business Activities establishes the commitment of the World Bank Group to the development of the small and medium enterprise (SME) sector as a core element in its strategy to foster economic growth, employment and poverty alleviation. In the context of Bangladesh, the development of Small and Medium Enterprises (SMEs) can be considered as a vital instrument for poverty alleviation and ensure the rapid industrialization. So we can say that the role of Small and Medium Enterprises (SMEs) is indispensable for overall economic development of a country particularly for developing countries like Bangladesh. It has drawn a lot of interest among policy makers, academics, businessmen and people in general. Government of Bangladesh has highlighted the importance of SME in the Industrial Policy-2005. SMEs have been identified by the Ministry of Industries as a ‘thrust sector’. As the SME sector is labor intensive, it can create more employment opportunities. For this reason government of Bangladesh has recognized SME as a poverty alleviation tool. As a result they will enhance the standard of living in rural areas. SMEs (Around the world) : Although the definition of what an SME is varies across nations, the most widely used...
Words: 6439 - Pages: 26
...SME Financing in Bangladesh: Problems and Prospects SME Financing in Bangladesh: Problems and Prospects Prepared for Arafat Rahman Assistant Professor Institute of Business Administration Jahangirnagar University Prepared by Tanjila Sharmin 201301029 Md. Mourshed Uddin 201303006 Naim Ahmad 201403020 Sayeed Ishtiaque Ahmed 201403027 Md. Sazzad Hossain 201403034 Course Participant BUS 501: Managerial Communication (Section-02) WMBA Program Institute of Business Administration Jahangirnagar University December 20, 2014 Letter of authorization November 23, 2014 Course Participant BUS 501: Managerial Communication The purpose of this report is to familiarize you with the basic techniques and principles associated with writing a formal business report so that you can build and enhance this specific written communication skill. This formal report will be coordinated with a formal presentation session on the topic of the report. At a minimum, your report should include information related to the following issues: Introduction to the Industry/Sector/Area – What is the industry/sector/Area? What is the background of the industry/sector/Area in Bangladesh? Who are the major participants? You may show how the industry/sector/area is contributing to the economic development of the country. In this case, you must use industry-related data for the past three years (at least). In case of export-oriented industries...
Words: 5047 - Pages: 21
...medium Enterprises (SMEs) have come into the forefront of development agenda due to the recognition of their contribution in fostering growth, sustaining global economic recovery, generating employment and reducing poverty (OECD, 2004). But this sector is facing severe problem in financing, regulatory aspects, access to non-financial inputs. Some recent trends show that Government policies have discriminated against small-scale enterprises. There is nothing wrong with a situation in which inexperienced entrepreneurs are unable to get institutional credit (Little, 1987). It shows that the relative decline of small-scale enterprises in most developing countries has been accelerated by the industrialization policies adopted in these countries. Protection, regulatory constraint, investment incentives, credit control, and the promotion of industry in the public sector have all discriminated against the small. The common idea that the cost of capital is very high for small enterprises is overly simple (Little, 1987). From A research of World Bank suggests the existence of financial constraint because formal banks do not lend to the smallest firms in most countries. It has also severe impact on the smallest firms (Levy, 1993). In Bangladesh, small and medium enterprises have been facing multifarious problems related to raw materials, power, land, marketing, transport, technical facilities and finance (Ranjit & Rashid, 1996). Due to their weak capital structure and other regulatory...
Words: 5496 - Pages: 22
...Characteristics/Profiles of Bangladeshi Entrepreneurs Several studies were done in order to identify the characteristics or profiles of Bangladeshi entrepreneurs. Papanek (1969) observed psychological trait of risk taking among the people of the then East Pakistan(now Bangladesh). Farouk (1983) did a survey on Bangladeshi entrepreneurs and in this survey he focused on the biography of successful Bangladeshi entrepreneurs. He found that Bangladeshi entrepreneurs are generally hard working, honest, religious, trustworthy, reliable, and less educated and live simple lives. Most of the entrepreneurs in this survey had poor educational background and were not good students. Generally these entrepreneurs come from three groups: 1. Those families who have been in business or industry by tradition and their children Are now in business, 2. Retired government officers or politicians or their family members. 3. Those that began small but achieved considerable success by their personal efforts. Rahman (1989) found that Bangladeshi Entrepreneurs possess some characteristics that are similar to characteristics of entrepreneurs in other countries. He did an extensive survey on 5 living Bangladeshi entrepreneurs and found that they are hard workers, truthful, religious, simple living, honest, sincere, good leaders; task oriented and had capacity to influence others. The highest educational degree they achieved was the Bachelors degree. Most of them started their businesses...
Words: 11869 - Pages: 48
