...1. Non Banking Financial Institutions in Bangladesh: Initially, NBFIs were incorporated in Bangladesh under the Companies Act, 1913 and were regulated by the provision relating to Non-Banking Institutions as contained in Chapter V of the Bangladesh Bank Order, 1972. But this regulatory framework was not adequate and NBFIs had the scope of carrying out their business in the line of banking. Later, Bangladesh Bank promulgated an order titled ‘Non Banking Financial Institutions Order, 1989’ to promote better regulation and also to remove the ambiguity relating to the permissible areas of operation of NBFIs. But the order did not cover the whole range of NBFI activities. It also did not mention anything about the statutory liquidity requirement to be maintained with the central bank. To remove the regulatory deficiency and also to define a wide range of activities to be covered by NBFIs, a new act titled ‘Financial Institution Act, 1993’ was enacted in 1993 (Barai et al. 1999). Industrial Promotion and Development Company (IPDC) was the first private sector NBFI in Bangladesh, which started its operation in 1981. Since then the number has been increasing and in December 2006 it reached 29. Of these, one is government owned, 15 are local (private) and the other 13 are established under joint venture with foreign participation. 1.1 Recent Development & Activities of NBFIs The major business of most NBFIs in Bangladesh is leasing, though some are also diversifying into other...
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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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...will eventually be published in learned journals after the due review process. Neither the Board of Directors nor the management of BB or any agency of the Government of Bangladesh, however, necessarily endorses any or all of the views expressed in these Papers. The latter reflect views based on professional analysis carried out by the research staff of Bangladesh Bank, and hence the usual caveat as to the veracity of research reports applies. [An electronic version of this paper is available at www.bangladeshbank.org.bd] Non-Bank Financial Institutions in Bangladesh: An Analytical Review Md. Nehal Ahmed∗ and Mainul Islam Chowdhury∗ Abstract Non-Bank Financial Institutions (NBFIs) in Bangladesh are gaining increased popularity in recent times. Though the major business of most NBFIs is leasing some are also diversifying into other lines of business like term lending, housing finance, merchant banking,...
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...NBFI The NBFI sector will have to improve their capital market investment, decision making, and risk management capabilities and also they should seek out new clients. Selim R.F. Hussain CEO & Managing Director, IDLC 2012 has been a challenging year for the NBFI sector for a number of reasons. 2012 witnessed severe liquidity challenges for the first three quarters of the year with interest rates sky rocketing while the liquidity in the interbank shrank significantly. Although the liquidity conditions eased in the last quarter of the year, interest rates remained consistently high throughout the year causing the NBFI sector much pain. Meeting the capital requirement of BDT 100 crore under the BASEL 2 was another major hurdle for this sector. From a business growth perspective, the shortage of power and gas created difficulties for both existing and pipeline industries and good investment or lending opportunities were relatively scarce. The bearish capital market also created havoc for the NBFI sector as many companies are heavily dependant on the stock market for their revenues. Overall, 2012 was a difficult year for the NBFI sector. Q A What’s your opinion about the year 2012 for the NBFI sector? In 2012, the earnings of the NBFIs have seen continuous downtrend. Where do you see the bottom of this downfall in revenue? The downtrend in revenues can be attributed to the failure of managing the challenges that were seen in the year 2012. The capital market revenues of the...
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...government owned specialized banks, domestic private banks, foreign banks, 29 non-bank financial institutions (NBFI), merchant banks and insurance companies. . In order to ensure flow of term loans and to meet the credit gap, development of NBFIs is a compelling necessity for the economy. Although NBFIs have immense necessity and greater importance in the financial system of Bangladesh, they are severely suffering from some problems including the fund problem in terms of both availability and cost. The major business of most financial institutions (non-bank) in Bangladesh is leasing and term loans extended to various. The leasing sector, a vital segment of financial sector has contributed significantly over the year, in spite of many constrains like tremendous competition with the banking sector of the country, challenges and regulatory changes which are affecting adversely on the business. At present there are 21 leasing companies operating under license of Bangladesh Bank. The lease financing practices in Bangladesh have grown significantly within last few years. Competition among the leasing companies has grown stronger with the growth of the NBFIs, besides entrance of commercial banks in the lease financing market who have the advantage of lower costs of fund compared to the NBFIs. Among 21 leasing companies 17 are listed with the capital market. Leasing companies as NBFIs are facing some difficulties in raising their fund and operating business. Leasing Companies have to collect...
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...B) Descriptive part * Significance of the report * Overall scenario of NBFI in BD * Sector Description * SWOT Analysis * Market operations * Financial performance * Capital Market Involvement(Main Focus) * Growth and prospects * Overall scenario of Capital Market in BD C) Analytical part * Prospective Analysis- * Time series * Trend * Chart and table * Regression Analysis-profitability & amount of investment * Scenario Analysis * Sensitivity Analysis D) Conclusion Part * Analytical outcome * Recommendations/Suggestions * Bibliography * References * Appendices * Involvement of Financial Institutions in Capital Market: Bangladesh Scenario * Prospects of Financial Institutions in Capital Market: A study of regulatory framework, growth and performance Non-bank financial institutions (NBFIs) represent one of the most important parts of a financial system. In Bangladesh, NBFIs are new in the financial system as compared to banking financial institutions (BFIs). Starting from the IPDC in 1981, a total of 29 NBFIs are now working in the country. As on June 30, 2001 the total amount of paid up capital and reserve of 28 NBFIs stood Tk.0000 million (BB, 2010). The NBFIs sector in Bangladesh consisting primarily...
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...Institutions to Strengthen the Financial System of Bangladesh - MONZUR HOSSAIN∗ -MD. SHAHIDUZZAMAN∗ Abstract Non-bank financial institutions (NBFIs) represent one of the most important parts of a financial system. In Bangladesh, NBFIs are new in the financial system as compared to banking financial institutions (BFIs). Starting from the IPDC in 1981, a total of 25 NBFIs are now working in the country. As on June 30, 2001 the total amount of paid up capital and reserve of 24 NBFIs stood Tk.6901.8 million (BB, 2002). The NBFIs sector in Bangladesh consisting primarily of the development financial institutions, leasing enterprises, investment companies, merchant bankers etc. The financing modes of the NBFIs are long term in nature. Traditionally our banking financial institutions are involved in term lending activities, which are mostly unfamiliar products for them. Inefficiency of BFIs in long-term loan management has already leaded an enormous volume of outstanding loan in our country. At this backdrop, in order to ensure flow of term loans and to meet the credit gap, NBFIs have immense importance in the economy. In addition, non-bank financial sector is important to increase the mobilization of term savings and for the sake of providing support services to the capital market. The focus of this paper is to highlight the necessity and importance of NBFIs to strengthen the financial system for rapid economic development of the country. 1. Introduction Building a sound financial system is...
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...*Corresponding author Determinants of profitability of Non Bank Financial Institutions’ in a developing country: Evidence from Bangladesh Abstract This project examines the determinants of the profitability of firms in the Non Banking Financial Institution (NBFIs) industry of Bangladesh. Financial Performance of a financial institution basically depends on its some key financial determinants. Specially operating efficiency is main influencing factor which is calculated through operating income. Besides it capital Structure composite of equity and liability, operating expense, total asset significantly affect the profitability of any NBFI company. In addition term deposit also affects the profitability though that is statistically not significant. Different Statistical techniques such as correlation matrix, multiple regressions have been used to determine the relationships between variables. And before doing regression analysis normality distribution test by Run test, and K-W test for randomness has been done. The research is an attempt to find out the statistically significant key determinants variable and their level of influence over net profit. Key words: Determinants, Non Banking Financial Institution (NBFIs), Financial Performance, Capital Structure, 1.00...
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...LONDON SCHOOL OF BUSINESS AND FINANCE CREDIT RISK MANAGEMENT OF NON-BANKING FINANCIAL INSTITTUTION IN GHANA (A CASE STUDY OF TF FINANCIAL SERVICES) BY STEPHEN KWADWO NTIRI A Thesis Submitted to the London School of Business and Finance in Partial Fulfilment of the Requirement for the MBA Degree in Financial Services MARCH 2010 DECLARATION I Stephen Kwadwo Ntiri hereby declare that except for references to other people’s work, which have duly been acknowledged, the work presented here was carried out by me, MBA student of Financial Servies at the London School of Business and Finance (LSBF), under the supervision of Randolph Metz-Johnson. I also declare that this work has never been submitted partially or wholly to any other institution for the award of a certificate. …………………………………………… ……………... Stephen Kwadwo Ntiri Date (Student) ………………………………………… …………… Randolph Metz-Johnson Date (Supervisor) Dedication This research project is dedicated to Almighty God for His abundant blessings and protection given me throughout this study, and also to my family for the support I received from them. Acknowledgement I am most grateful to Almighty God who through His infinite mercy and love guided me throughout the duration of the programme. I wish to acknowledge the help and encouragement I got from the entire staff of TF Financial Services, especially Mr. Benjamin Turkson, which has enabled me to complete this work. I also want to thank my wife, Esther Yamoaba...
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...Term Paper On Credit Risk Grading Of Non Bank Financial Institution. A Study on IDLC Finance Limited. Submitted To: .......................... Supervisor of Term Paper Committee Faculty of Business Studies Premier University Submitted By: ...................... Student ID: ................ Program: BBA, Major in Finance Department of Business Studies Date of Submission: August 28, 2012 FACULTY OF BUSINESS STUDIES PREMIER UNIVERSITY, CHITTAGONG September 16, 2012 Dr. Mr. Ifthekhar Uddin Chowdhury Dean for the Faculties, Faculty of Business Studies, Premier University. [ Subject: Presentation of The Term Paper On study of “Credit Risk Grading Of Non-Bank Financial Institution”. Dear Sir, With an immense pleasure, I would like to submit my Term Paper titled, “Credit Risk Grading of Non- bank financial Institutions.” to fulfill the requirement of BBA Program. I am very delight to tell you that working on this internship report has given me a wide range of exposure. To prepare this report, I have faced extensive face to face interviews with professionals as well as customers. It has taught me the value of patience, and has given me a higher insight on the level of communication in the practical world. In every segment of the report, I have tried to make an honest endeavor to present it as good combination of my knowledge, intelligence and the information gathering. It is highly pleasure for me to get...
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...Executive Summary The financial institutions industry in our country represents one of the most important industries those control the monetary flow in the economy. From the very first of its journey (Started by Industrial Promotion Company of Bangladesh Limited.) this industry has shown so much prospect as well as progress. Sharing some common characteristics of Banks & some of its own it brought diversification in the financial market. In the same time it witnessed impressive growth during the last years. In our country like most other industries financial institutions are also big city especially Dhaka concentrated. Financial institutions rarely spread their branches outside divisional cities let alone the urban areas. So the fierce competition among as well as across the group is strengthening. So the market segmentation, expansion and product diversification may be some key tools to get out of the situation for the FIs. But currently the industry seems to become matured with so many competitors. The recent inclusion of another two new financial institutions (Bangladesh Infrastructure Finance Fund Limited (BIFFL) & Agrani SME Financing Company Limited) in the market has increased the number of competitors at 31. From the research & provided data it is very clear that the companies are trying to strengthen their position in the market as the investment n fixed asset seems to on the rise. Besides following the stock market crash in 2010 and recent rise in the...
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...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 (NGOs and discrete government programs. The informal sector includes private intermediaries which are completely unregulated. | | | Related links About financial markets | Regulators | Bank & FIs | Capital market | Insurance | Micro Finance Institutions (MFIs) | Recent developments | Key financial indicators | Print this page | | | | | Financial System of Bangladesh | Formal Sector | Semi Formal Sector | Informal Sector | Financial Market | Money Market (Banks, NBFIs,Primary Dealers) | Capital Market (Investment banks, Stock Exchanges, Credit Rating Companies etc.) | Foreign Exchange Market (Authorized Dealers) | Bangladesh Bank (Central Bank) | Specialized Financial Institutions: 1. House Building Financial Corporation(HBFC) 2. Palli Karma Sahayak Foundation(PKSF) 3. Samabay Bank 4. Grameen Bank | Regulators &...
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...1. Financial System of Bangladesh: Financial system is a Set of institutional arrangement through which financial surpluses will be mobilized from the surplus units and will be transferred to the deficit units. It is a framework for describing set of markets, organisations, and individuals that engage in the transaction of financial instruments (securities), as well as regulatory institutions. The basic role of Financial System is essentially channelling of funds within the different units of the economy – from surplus units to deficit units for productive purposes. 1.1 COMPONENTS OF FINANCIAL SYSTEM: There are mainly three components of financial system. These are: I. Financial Market II. Financial Intermediaries III. Financial Instrument I. FINANCIAL MARKET Financial markets are a mechanism enabling participants to deal in financial claims. The markets also provide a facility in which their demands and requirements interact to set a price for such claims. Financial markets perform the essential function of channeling funds from economic players that have saved surplus funds to those that have a shortage of funds. At any point in time in an economy, there are individuals or organizations with excess amounts of funds, and others with a lack of funds they need for example to consume or to invest. Exchange between these two groups of agents is settled in financial markets. The first group is commonly referred to as lenders...
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...Internship Report on Functions oF credit risk management in non Banking Financial institutions (nBFi) in Bangladesh A study on IDLC Finance Limited Internship Report on Functions oF credit risk management in non Banking Financial institutions (nBFi) in Bangladesh A study on IDLC Finance Limited Submitted to: Sharmin Shabnam Rahman Dewan Mostafizur Rahman Internship supervisor of the submitter BRAC Business School (BBS) BRAC University Submitted By: Chowdhury Tasmiah Jabeen ID-06104024 BRAC Business School (BBS) BRAC University Date of Submission: 23rd December 2009 Letter of Transmittal_______________________ 23rd December 2009 Sharmin Shabnam Rahman BRAC Business School (BBS) BRAC University Subject: Submission of Internship Report of BBA Programme Dear Madam, It is my great pleasure to submit the internship report on "Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd " which is a part of BBA Programme to you for your consideration. I made sincere efforts to study related materials, documents, observe operations performed in IDLC Finance Limited and examine relevant records for preparation of the report. Within the time limit, I have tried my best to compile the pertinent information as comprehensively as possible and if you need any further information, I will be glad to assist you. Thanking you, Chowdhury Tasmiah Jabeen ID-06104024 BRAC...
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...lenders to borrowers, to create liquidity and money, to provide payments mechanism, to provide financial services. The present structure of the financial system in Bangladesh comprises of various types of banks, insurance companies, non-bank financial institutions and share market. Money market Bank NBFI Share market Insurance Bank: Bangladesh Bank is at the top of the banking system and is accountable for assuring prudential administration and central banking activities for all types of banks operating within the banking industry. Bangladesh Bank monitor, control the overall banking system. Banks in Bangladesh are two types: a) Scheduled Banks, b) Non Schedule bank. a) Schedule Bank: Basically Schedule bank is two type: i) State owned commercial bank. i.e. Sonali bank. ii) Private commercial bank. i.e. Prime bank, Islami bank NBFI: Non-banking financial institutions, which are not, banks. These institutions cannot perform all functions of banks. NBFI cannot issue check, not allowed to take all type of deposits except fixed deposit. It provides long term loan. Not regulated all the time by Bangladesh bank. For example: IDLC Share market: Bangladesh Securities and Exchange Commission (BSES) is the regulator of Share market. Infrastructure: i) DSE, CSE. ii) CDBL. iii) RJSCF, iv) Merchant bank,...
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