Entrepreneurship Development Program Available in Bangladesh

Entrepreneurship is often considered one of the most effective and flexible strategies for economic development of a country. So lack of entrepreneurship development is one of the reasons for not developing the economy. In Bangladesh at the time of initiating enterprise, an entrepreneur faces many problems such as shortage of skilled workers and infrastructural facilities.In Bangladesh lack of political commitments and absence of creation of healthy environment required for entrepreneurial growth are the limiting factors in the process of adequate supply of reasonable number of entrepreneurs. Today, some Govt. and some non-govt. organizations have come forward with great facilities for entrepreneurs.

Entrepreneurship development program available in Bangladesh:

In Bangladesh, both Govt. and NGO’s provide special support to entrepreneurs. Among them some Govt. organizations are-

• BSCIC,
•  Karmasangsthan Bank,
• Krishi Bank,
• Basic Bank Ltd.

Some NGO’s are-

• Grameen Bank Ltd.,
• BRAC,
• MIDAS Financing Ltd.,
• BRAC Bank Ltd

A case study on entrepreneurship development program provided by them in Bangladesh is given below-

BSCIC:

Bangladesh Small and Cottage Industries Corporation (BSCIC) is the prime mover organization entrusted with the responsibility of development of small and cottage industries (SCI) in Bangladesh. It is an autonomous corporation under the Ministry of Industries and was established by an Act of the parliament in 1957. It is the successor organization of EPSCIC.

Main Objectives of BSCIC:

•    Increase of industrial production and productivity in the SCI sector;

•    Creation of employment opportunities;

•    Poverty alleviation;

•    Balanced regional growth;

•    Ensure optimum utilization of economic and human resources;

•    Accelerate overall economic growth of the country through SCI.

BSCIC Provides-

• Pre-investment counselling
• Post-investment extension services
• Technical information
• Design and prototype of handicrafts
• Industrial profiles and fact sheets
• Marketing information

• Infrastructural facilities
• Skill development training
• Entrepreneurship development training
• In-plant advisory services
• Credit facilities etc.

Credit Programme: For the promotion and extension of small & cottage industries BSCIC arranges credit facilities with the help of banks and other financial institutions .

On the other hand BSCIC has some credit programmes .These are:

• Development of rural industries
• Poverty Alleviation Through Income Generation Programme
• Self employment through small & cottage industries
• Women Entrepreneurship Development Programme
• Revitalization Of Rural Economy Through Development of rural industries

Karmasangsthan Bank:

The Karmasangsthan Bank was established in 1998 as per Karmasangsthan Bank Act No.7 of 1998 with a view to involving the unemployed people of the country especially the unemployed youths in the economic activities through self-employment opportunities for poverty alleviation. The Government enforced this law on 30 June 1998 being empowered to do so by article 1(2) of this Act. The Bank formally started functioning since 22 September 1998 through disbursement of loans from its main branch at Dhaka.

Activities of the Bank:

Karmasangsthan Bank provides credit facilities in cash or in any any other manner for all sorts of economic activities, especially to the unemployed youths, for self-employment, with or without security. Karmasangsthan Bank can perform the following activities subject to terms and conditions prescribed by Bangladesh Bank :

1. To receive deposits from statutory bodies, companies, loanees of the Bank and from such other persons as not determined as a single person for the purpose by the Govt.
2. To procure/receive credit by way of mortgage of its assets or anything else for conducting its business.
3. To secure pledge, mortgage, hypothecation or assignment of movable or immovable property as security against loans and advances granted by the Bank.
4. To purchase shares of any statutory body.
5. To receive savings certificates, title deeds of ownership or any other valuable articles for keeping them in safe custody.
6. To form, operate and control any kind of fund or trust and to hold and deliver shares of such fund or trust.
7. To accord advice to the loanees of the Bank about investment of the loan.
8. To invest Bank’s fund in any sector approved by the Govt.
9. To set up, manage, develop and conduct any institution or project for the purpose of training, welfare & development of the unemployeds.
10. To receive, collect, remit and pay monies, securities and bills within the country.
11. With a view to conducting the business, to secure/manage and transfer movable or immovable property with housing facilities.
12. To advise the unemployeds about investment.
13. To encourage the unemployed workforce to invest in agro product processing & cottage industries.
14. To provide the loanees with managerial, marketing, technical & administrative assistances.
15. To open account with any bank or financial institution, to make contract with them or to act as their Agent.
16. To sell and manage all properties earned by the Bank.
17. With a view to generating employment opportunities, to procure credit or aid from any donor agency or organization subject to approval of the Govt.
18.  To make arrangement for collection of information, research and publications relating to employment, particularly self-employment in the country.
19.  To do such other acts as the Bank is entitled to do and are determined by the Govt. through Govt. Gazette Notifications.
20.  To do any other necessary act which is compatible with objectives of the Karmasangsthan Bank Act.
21.  Besides the above activities, the Bank can issue and sell Bonds and Debentures subject to prior approval of the Govt. The rates of interest of such Bonds and Debentures shall be that as determined by the Govt. and each of such Bond or Debenture shall have Govt. surety behind itself.
22.  It is mentionable that with a view to eliminating unemployment and alleviating poverty through generation of self-employment for the unemployed youths, the Bank is now providing loans without security in various productive economic activities.

Credit policy:

Main Characteristics of loan disbursement policy are stated below:

 A. Eligibility for Loan/Credit facility:

1. The applicant’s age should be generally from 18 years to 40 years (Age limit : 18-45 years); but Age limit is flexible incase of old loanee of the bank.
2. The applicant should be unemployed/Quasi-unemployed.
3.  Ability to operate the Project/Business organization.
4.  Must have experience & training in operating the proposed project/ business organization.
5.  Should not be the loan defaulter as declared by any other Bank/Financial institute /NGO.

B. Guarantor’s Eligibility:

1. Being able to pay the loan; Father/Mother/Husband/Wife of the applicant may become the Guarantor of the loan. Besides this, being able to pay the loan a person who lives permanently in the project area or who has house & land property within the project area may also become the Guarantor.
2. Highest a person can become the Guarantor for two loanee/one group.
3. A person serving in Govt/Semi-Govt/Autonomous Organization may become the Guarantor as per rules set out by that organization.

C. Non- encumbrance Certificate:

The entrepreneur/Guarantor need to submit Non-Encumbrance Certificate (NEC) issued by the relevant Sub-Register for loan limit above Tk= 5.00 Lacs.

 D. Selection of borrower/entrepreneur:

Criteria listed below are usually followed to select a borrower/entrepreneur:

1. An enthusiastic person desirous for loan among the Youths (Male & Female) trained from the Directorate of Youth development.
2. A person, who achieved/secured training form various Govt/Govt’s approved private organizations.
3. An enthusiastic person within the jurisdiction area of the branch. Who comes to seek loan in response to the local advertisement.
4. A person, who is familiar to the present entrepreneur/Loanee of the Bank.
5. Self- initiated person who comes to seek loan.
6. Persons selected by the field workers of the Bank during their tour in the assigned area.

E. Application & fees:

The applicant should have to apply in the prescribed form for loan supplied by the bank in free of cost. No need to pay any sort of Fees at the time of submission of the loan application.

F. Scope of loan:

Non-proscribed & commercially viable/ productive/ Commercial/Service oriented any type of Economic activities may be regarded as head of loan.

G. Rate of Interest:

1. 12 % simple interest rate in commercial sector
2. 10 % simple interest rate in productive & service oriented sector.

H. Limit of Credit facility/Loan limit:

1. Highest Tk. = 5.00 Lac in case of person;
2. Highest Tk. = 25.00 Lac in case of group.

Security of Loan:

1. Personal Guarantee against loan limit upto Tk. 50,000/-
2. In addition to personal Guarantee equitable Mortgage (deposition of Title Deed in the Bank) against loan limit Tk. 50,001/- – 5.00 lac.
3. Registered Mortgage against loan limit above Tk. 5.00 lac.

 J. Tenure of Loan: Highest 05 (five) years.

K. Weekly Savings:

1. The Loanee under the category of loan limit up to Tk. 50,000/- shall have to deposit at least Tk. 10/- per week;
2. The loanee under the category of loan limit from Tk. 50,000/- to 1 lack. Shall have to deposit at least Tk. 20/- per week.
3. The loanee under the category of loan limit above Tk. 1.00 lac shall have to deposit at least Tk. 40/- per week.

L. Loan sanctioning Authority:

1.  Branch Manager at Upazilla Level: upto Tk. 40,000/-
2.  Branch Manager at District Level: upto Tk. 50,000/-
3.  Head office: Above Tk. 50,000/-

Special Credit Programs:

The following welfare oriented special credit Programmes of the Government are being implemented by this Bank-

1. Programme for eradication of Hazardous Child Labour in Bangladesh (EHCLB) is being launched by this bank under the patronage of the Ministry of labour & employment. Mean While, the Bank has provided credit facilities without security to the parents of 5000 Child-labour.
2. With a view to revamp & uplift the economic condition of the country, the bank under the guidance of the Ministry of Finance is executing the credit Programme to assist the entrepreneurs for the development of Agro-based industries.
3. 3.      Under the Patronage of the Ministry of Labour & Employment this Bank is providing credit facilities without security among the self-Retired/retrenched workers & employees of industries & factories for their Self-employment.

 Karmasangsthan bank offers the following welfare oriented special credit Programmes :

• Programme for eradication of Hazardous Child Labour in Bangladesh (EHCLB)
• Programme to assist the entrepreneurs for the development of Agro-based industries
• Programme for self-Retired/retrenched workers & employees of industries & factories for their Self-employment. (SEIF)

Bangladesh Krishi Bank:

Bangladesh Krishi Bank (BKB) is a 100% government owned specialized Bank in Bangladesh. KRISHI means Agriculture. Since its inception, BKB is financing in agricultural sector remarkably. BKB also performs commercial banking.

The major occupation of the people of Bangladesh is “Krishi”. Krishi is a Bengali word which means “Agriculture”. About 85% of the population depends directly or indirectly on agriculture which contributes a significant portion to GDP.

Bangladesh Krishi Bank (BKB) has been established under the Bangladesh Krishi Bank order 1973 (President’s Order No 27 of 1973). BKB is a Banking Company under the Banking Company Act-1991.

Credit Programs:

1. 1.        Crop Loan: Out of total annual allocation of Loan portfolio, 60% is earmarked for Crop financing. The Credit program covers all the seasonal crops produced in the country. The loan is disbursed as per norms set by the Bangladesh Bank. The rate of interest for this sector is 8%. The rate of interest may however, vary from time to time. Both the landowner and sharecroppers are normally the target group for this loan. Marginal farmers are also eligible for the loan.

• Crop loan is sanctioned on annual basis.
• Credit passbook is issued to each borrower.

1. 2.       Fisheries Loan: To accelerate fish production BKB provides loan for excavation and re-excavation of ponds, development of marshy lands, establishment of fish hatcheries and new fisheries projects. The Loans are given in the following sub sectors:

• White Fish
• Shrimp culture (Marine, Brackish water and sweet water Culture )
• Fish & Shrimp hatchery (fingerlings production)

3.  Live Stock & Continuous Loan: Beef Fattening Program

Objectives of the program:

1. Create self-employment opportunity for poor and un-employed people.
2. Meet national deficit of animal protein.
3. Bring positive change in the attitude of the people through training.
4. Ensure participation of bank officials in the program and increase their

Main Aspects:

1. Purely supervised credit.
2. The bank officials giving guarantee are responsible for recovery of loan.
3. Each borrower will get maximum Tk. 25,000/-for 5 calves (each Tk. 5,000/-)
4. Loan is collateral free.
5. Repayable within one year.

Continuous Loan:

• The bank is providing continuous loan for different types of activities as cash credit/working capital loan on short term basis.
• Continuous loan is given for processing, preservation and marketing of agricultural products.

1. Farm & Irrigation Equipment: With the Changing scenario the traditional agricultural system is being replaced by mechanized one. In order to meet up the changing demand of this sector, BKB offers credit facilities both for production and marketing of different agricultural equipment and farm machinery including irrigation equipment. All sorts of irrigation equipments like LLP, HPTW, STW, DTW are eligible under the sector.
2. S M E: Bangladesh Krishi Bank has recently introduced the SME policy strategies and financing norms in accordance with the industrial policy 2005 and Bangladesh Bank’s Prudential Regulation to assist in the achievement of Millennium Development Goals (MDGs) set by the government. BKB started SME financing since October, 2007.

Booster Sectors of Small and Medium Enterprise (SMEs) are:

• Electronics & Electrical
• Software Development
• Light engineering and metalworking
• Agro-processing/agri-business/plantation agriculture/specialist farming/tissue-culture and related business.
• Leather making and leather goods
• Knitwear and readymade garments
• Plastics & other synthetics
• Healthcare and diagnostics
• Educational Services
• Pharmaceuticals/cosmetics/toiletries
• Electronics & Electrical
• Fashion-rich personal effects, wear and consumption goods

Credit Facility:

• Small Enterprises : Tk. 2.00 lakh to 50.00 lakh
• Medium Enterprises : Tk. 51.00 lakh to 500.00 lakh

Interest Rate:

• Small Enterprises : 12.50%
• Medium Enterprises : 12.50%
• Working Capital : 13.00%

Repayment:

EMI (equal monthly installment) maximum for 5(five) years and working capital for 1(one) year.

BASIC Bank Ltd.:

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.

The Bank Offers:

• Term loans to industries especially to small-scale enterprises.
• Full-fledged commercial banking service including collection of deposit, short term trade finance, working capital finance in processing and manufacturing units and financing and facilitating international trade.
• Technical support to Small Scale Industries (SSls) in order to enable them to run their enterprises successfully.
• Micro credit to the urban poor through linkage with Non- Government Organizations (NGOs) with a view to facilitating their access to the formal financial market for the mobilization of resources.
• In order to perform the above tasks, BASIC Bank works closely with its clients, the regulatory authorities, the shareholders (GOB), banks and other financial institutions.
• Corporate Strategy
• Financing establishment of small units of industries and business and facilitate their growth
• Small Balance Sheet size composed of quality assets.
• Steady and sustainable growth.
• Investment in a cautious way.
• Adoption of new banking technology.
• To employ funds for profitable   purposes in various fields with special emphasis on small scale industries.
• To undertake project promotion on identify profitable areas of investment.
• To search for newer avenues for investment and develop new products to suit such needs.
• To establish linkage with other institutions which are engaged in financing micro enterprises.
• To cooperate and collaborate with institutions entrusted with the responsibility of promoting and aiding SSI sector.

Activities:

1. Industrial Credit                        

BASIC Bank’s services are directed towards the entrepreneurs in the small industries sector. A small industry, as per Industrial policy 1999 approved by the Cabinet, has been defined as an industrial undertaking whose total fixed investment is less than Tk.100 million.

BASIC Bank’s services are specially directed towards promotion and development of small and medium industries. Its exposure to small and medium industries sector accounted for 54.65 percent of the total loans and advances. During the year total of 111 projects were sanctioned term loan. As on 31 December 2010, total 966 projects were in the portfolio of the bank. The textile sector including garments being one of the major contributors to national economy dominated the loan portfolio of the Bank. Financing in other sectors include agro based industry like poultry, engineering; food and allied industries; chemicals, pharmaceuticals and allied industries; paper, board, printing and packaging; and other non-metallic goods, leather and jute products.

2. Commercial Credit                              

The Bank also continued support in developing trade, general business and other commercial activities in the country. It covers the full range of services to the exporters and importers extending various facilities such as cash credit, export cash credit, packing credit, short term loans, local and foreign bills purchase facilities.

3. Micro Credit                   

BASIC Bank launched a Micro Credit Scheme in 1994. Micro Credit Scheme provides for the poor for generation of employment and income on a sustainable basis particularly in urban and suburban areas. The Bank follows three systems of credit delivery.

These are:

1. Lending to the NGOs who on-lend to their members. At present there are 41 such NGOs.

2. Lending direct to the targets groups or ultimate borrowers under the Bank’s own management.

3. Lending direct to the member-borrowers and NGOs providing nonfinancial services like group formation and monitoring and supervision on exchange for a supervision fee.

BASIC Bank also provides micro credit to the poor for enervation of employment and income on a sustainable basis, particularly in urban and suburban areas.

 Grameen Bank:

Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the overall development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable. Professor Muhammad Yunus, the founder of “Grameen Bank” and its Managing Director, reasoned that if financial resources can be made available to the poor people on terms and conditions that are appropriate and reasonable, “these millions of small people with their millions of small pursuits can add up to create the biggest development wonder.”

As of September, 2011, it has 8.34 million borrowers, 97 percent of whom are women. With 2,565 branches, GB provides services in 81,379 villages, covering more than 97 percent of the total villages in Bangladesh.

Credit Delivery System:

Grameen Bank Credit Delivery means taking credit to the very poor in their villages by means of the essential elements of the Grameen credit delivery system.

Grameen Bank credit delivery system has the following features:

1. There is an exclusive focus on the poorest of the poor. Exclusivity is ensured by:

1. Establishing clearly the eligibility criteria for selection of targeted clientele and adopting practical measures to screen out those who do not meet them
2. In delivering credit, priority has been increasingly assigned to women
3. The delivery system is geared to meet the diverse socio-economic development needs of the poor

2. Borrowers are organized into small homogeneous groups:

Such characteristics facilitate group solidarity as well as participatory interaction. Organizing the primary groups of five members and federating them into centres has been the foundation of Grameen Bank’s system. The emphasis from the very outset is to organisationally strengthen the Grameen clientele, so that they can acquire the capacity for planning and implementing micro level development decisions. The Centres are functionally linked to the Grameen Bank, whose field workers have to attend Centre meetings every week.

3. Special loan conditionalities which are particularly suitable for the poor. These include:

• very small loans given without any collateral
• loans repayable in weekly instalments spread over a year
• eligibility for a subsequent loan depends upon repayment of first loan
• individual, self chosen, quick income generating activities which employ the skills that borrowers already posses
• close supervision of credit by the group as well as the bank staff
• stress on credit discipline and collective borrower responsibility or peer pressure
• special safegaurds through compulsory and voluntary savings to minimise the risks that the poor confront
• transparency in all bank transactions most of which take place at centre meetings.

4. Simultaneous undertaking of a social development agenda addressing basic needs of the clientele.  This is reflected in the “sixteen decisions” adopted by Grameen borrowers. This helps to:

• raise the social and political consciousness of the newly organized groups
• focus increasingly on women from the poorest households, whose urge for survival has a far greater bearing on the development of the family
• encourage their monitoring of social and physical infrastructure projects – housing, sanitation, drinking water, education, family planning, etc.

5. Design and development of organization and management systems capable of delivering programme resources to targeted clientele.

The system has evolved gradually through a structured learning process that involves trials, errors and continuous adjustments. A major requirement to operationalize the system is the special training needed for development of a highly motivated staff, so that the decision making and operational authority is gradually decentralized and administrative functions are delegated at the zonal levels downwards.

6. Expansion of loan portfolio to meet diverse development needs of the poor.

As the general credit programme gathers momentum and the borrowers become familiar with credit discipline, other loan programmes are introduced to meet growing social and economic development needs of the clientele. Besides housing, such programmes include:

• credit for building sanitary laterines
• credit for installation of tubewells that supply drinking water and irrigation for kitchen gardens
• credit for seasonal cultivation to buy agricultural inputs
• loan for leasing equipment / machinery, ie., cell phones purchased by Grameen Bank members
• finance projects undertaken by the entire family of a seasoned borrower.

The underlying premise of Grameen is that, in order to emerge from poverty and remove themselves from the clutches of usurers and middlemen, landless peasants need access to credit, without which they cannot be expected to launch their own enterprises, however small these may be. In defiance of the traditional rural banking postulate whereby “no collateral (in this case, land) means no credit”, the Grameen Bank experiment set out to prove – successfully – that lending to the poor is not an impossible proposition; on the contrary, it gives landless peasants the opportunity to purchase their own tools, equipment, or other necessary means of production and embark on income-generating ventures which will allow them escape from the vicious cycle of “low income, low savings, low investment, low income”. In other words, the banker’s confidence rests upon the will and capacity of the borrowers to succeed in their undertakings.

The mode of operation of Grameen Bank is as follows. A bank branch is set up with a branch manager and a number of center managers and covers an area of about 15 to 22 villages. The manager and the workers start by visiting villages to familiarise themeselves with the local milieu in which they will be operating and identify the prospective clientele, as well as explain the purpose, the functions, and the mode of operation of the bank to the local population. Groups of five prospective borrowers are formed; in the first stage, only two of them are eligible for, and receive, a loan. The group is observed for a month to see if the members are conforming to the rules of the bank. Only if the first two borrowers begin to repay the principal plus interest over a period of six weeks, do the other members of the group become eligible themselves for a loan. Because of these restrictions, there is substantial group pressure to keep individual records clear. In this sense, the collective responsibility of the group serves as the collateral on the loan.

BRAC:   

“Alleviation of Poverty and Empowerment of the Poor”

“BRAC is the world’s largest development organisation and is doing tremendous work impacting the lives of millions. BRAC is making a significant contribution to Bangladesh, making huge leaps forward in meeting the Millennium Development Goals.”

– Subinay Nandy, Country Director, China, United Nations Development Programme

It says- “Make investment in the small industry, make more profit.”

“Craft and skill in the cottage industry are our pride and heritage.”

Known formerly as the Bangladesh Rehabilitation Assistance Committee and then as the Bangladesh Rural Advancement Committee, BRAC was initiated in 1972 by Sir Fazle Hasan Abed at Sulla in the district of Sylhet as a small-scale relief and rehabilitation project to help returning war refugees after the Bangladesh Liberation War of 1971. In nine months, 14 thousand homes were rebuilt as part of the relief effort and several hundred boats were built for the fishermen. Medical centres were opened and other essential services were ensured.[4] At the end of 1972, when the first phase of relief work was over, BRAC turned towards long-term development needs and re-organised itself to focus on the empowerment of the poor and landless, particularly women and children.

By 1974, BRAC had started providing microcredit and had started analyzing the usefulness of credit inputs in the lives of the poor. Until the mid 1970s, BRAC concentrated on community development through village development programmes that included agriculture, fisheries, cooperatives, rural crafts, adult literacy, health and family planning, vocational training for women and construction of community centres.

Their Vision:

A world free from all forms of exploitation and discrimination where everyone has the opportunity to realize their potential.

Their Mission:

Their mission is to empower people and communities in situations of poverty, illiteracy, disease and social injustice. Their interventions aim to achieve large scale, positive changes through economic and social programs that enable men and women to realise their potential.

Financial activities of BRAC:

1. 1.     Microfinance:

BRAC’s microfinance program has cumulatively disbursed over USD 5 billion and serves over 6 million poor and landless people. Ninety-eight percent of BRAC’s microfinance members are women, and these members belong to 170,000 Village Organizations (VOs) that BRAC has created to serve as a forum where the poor can collectively address the structural impediments to their development, receive credit, mobilise savings and build upon their social capital.

1. a.     Microfinance DABI: DABI (Microloans): These loans, which range from USD 50 – 700, are given exclusively to individual women who are serviced in a group setting, namely the Village Organisation (VO). The VO acts as an informal guarantor by creating peer pressure for timely repayment. Borrowers repay through weekly installments and deposit savings during VO meetings, held every week in a borrower’s courtyard. Microloans are generally used for small operations in poultry, livestock, fruit and vegetable cultivation, handicrafts or rural trade.

BRAC has also developed a specialized microloan scheme to encourage the financial empowerment of adolescent girls, to help them continue their education and prepare for future financial responsibilities. Under this program, small loans, starting from USD 40, are coupled with savings facilities and livelihood training, to help girls start small home-based enterprises.

1. b.    Microfinance PROGOTI: PROGOTI (Microenterprise Loans): These loans, which range from USD 700 to 7,000 are given to both male and female entrepreneurs to support and expand existing small enterprises which are too small to qualify for credit from commercial banks. Borrowers generally use microenterprise loans to finance shops and small-scale manufacturing activities and repay on a monthly basis.

2. Targeting Extreme Poverty

The most recent estimates suggest that 25% of the population of Bangladesh live in extreme poverty. About 10% categorized as ultra poor struggling for survival below the food poverty line .

Since January 2002, BRAC has started a new program for the extreme poor called “Challenging the Frontiers of Poverty Reduction, Targeting the Ultra Poor” in short CFPR-TUP. In CFPR-TUP, BRAC is operating with two exclusive strategies:

‘Special Investment Program’ (SIP) – a full grant based approach for the Specially Targeted Ultra Poor (STUP) households  who simply need complete tailor made supports and service to make any positive change in their livelihoods.

‘Grant plus Credit’ approach for Other Targeted Ultra Poor ( OTUP) who are slightly better than the SIP group but still are very poor and need some special support to make any progress in their lives.

Two fold objective of CFPR-TUP programme is to:

• assist the ultra poor population graduate from ultra poverty level.
• assist the ultra poor population getting access to the mainstream development programmes.

3.     Empowering adolescent:The Employment and Livelihood for Adolescents (ELA) programme combines livelihood and life-skills training with credit facilities to help improve the quality of life of rural adolescent girls and young women between the ages of 14 and 25. It was established as a means through which they could build a savings habit to allow them to be self-supporting in the future. The programme’s target group is varied, with preference given to graduates of BRAC Education Programme schools. ELA village organisations consists of 20 to 30 members who obtain credit in order to operate income generating activities either with the help of family members or on their own. The members invest their loans in tailoring, poultry, livestock, nursery, vegetable cultivation and other small businesses.

4.     Tenant Farmers Development Project:

Bangladesh Bank offered BRAC a refinancing facility of Taka 500 crore, around USD 75 million, at 5% interest, so that we could offer soft loans to tenant farmers (sharecroppers) with a specially tailored recovery plan. We took the challenge and initiated an innovative project entitled “Borga Chashi Development Project” in October 2009.

Under the project, BRAC is organising up to 40 tenant farmers (men and women) into village organisations and providing them with both credit and information on modern agriculture. Tenant farmers with up to two acres of farm (mostly rented) who have not taken loans from financial institutions are eligible to become members of the village organisation. Each farmer is provided with loans of up to Taka 20,000 (USD 3,000) as working capital for crop farming, depending on the size of the farm and the crop enterprise. The loan bears a flat interest rate of 10 percent per year. One-third of the loan is repaid in 10 equal monthly instalments, while the rest is paid back in two parts during the two major yearly harvests. The farmers meet every month to discuss farming problems with agricultural development specialists hired for the project. If the specialist cannot address the problem, he/she connects the farmer with local level government agricultural extension officials.

In 2010, the mobilisation of tenant farmers for provision of credit and extension of improved technology and modern farming practices were carried out in full swing.

 MIDAS Financing Ltd.:

 “The real friend of entrepreneurs”

MIDAS FINANCING LTD. (MFL) is leading financial institution of the country licensed by Bangladesh Bank under the financial institutions Act 1993. MFL Housing Loan Scheme has been launched to fulfill the dream of the limited income people by extending financial support in the form of term loan for constructing a house and/or purchasing an apartment/readymade house/commercial space.

Vision

To be a leading financial institution of the country with diversified financial services contributing towards development of an enterprising society.

Mission

I to provide value added financial services to valued customers, strictly maintaining the ethical standard in financial operation.

Objective

To provide diversified financial services within the legal and social framework with the aim of attaining the mission with quantitative targets in business operation.

Loan & Other Schemes:

• Housing Loan
• Call Money
• CCS Program
• Lease Financing
• MIDI Program
• SED Program
• LLS

Lease Financing:

MIDAS Financing Ltd. (MFL) extends lease finance facility to SME and Corporate Business Units in the manufacturing and service industries sectors and also to individuals and institutions.

Leasable Items

• Capital Machinery
• Heavy Construction Equipment
• Generator, Transformer, Lift, Boiler, etc.
• Air Conditioning and Refrigeration Equipment
• Medical Equipment
• Vehicles
• Agricultural Equipment

Lease Period

2-5 years

Installment

Monthly, bi-monthly or quarterly

Lease Security Deposit

2 (tow) rental installments

Security:

• Purchase and insurance of the lease asset in the name of MFL AND
• Personal Guarantee of the Sponsors AND
• Third Party Guarantee of 2 (two) responsible persons acceptable to MFL OR
• Corporate Guarantee OR
• Mortgage of Land or Building OR
• Lien of Term Deposit Receipt (TDR) OR
• Lien of Marketable Securities

Special Features of the Product

• Relatively short processing time
• Competitive pricing
• Flexible repayment (advance or arrear basis)
• Scope for customization of the product

BRAC Bank Ltd.:

BRAC Bank is the last organization to have received a commercial banking license from Bangladesh Bank, making it the youngest private commercial bank in Bangladesh. Its headquarters are based in the capital Dhaka. The bank is partially owned by BRAC, the largest non-government organization in the world, International Finance Corporation, the private sector arm of The World Bank Group and ShoreCap International.

BRAC Bank was formed with the aim to serve the millions of small and medium enterprises (SMEs) in the country. Having pioneered the concept of SME financing in Bangladesh, it is the fourth largest SME bank globally. The company also provides services within corporate and institutional banking, retail banking, as well as probashi banking, which specifically caters to non-resident Bangladeshis abroad. Other areas include customized treasury and foreign exchange solutions, and custody services. It ranks amongst the top banks nationally that processes remittances from abroad.

SME Banking

BRAC Bank, being the youngest bank, took a step to break away from usual tradition and tapped into the true suburb entrepreneurial initiatives.

Today, with over 14,500 crores of loans disbursed till date, BRAC Bank is country’s largest SME financier that has made more than 320,000 dreams come true!

Loan Products

• Anonno Rin
• Apurbo Rin
• Prothoma Rin
• Durjoy
• Shomriddhi Rin
• Shompod Rin
• Shokti Rin

ANONNO SME Loan: ANONNO is a business loan to meet any kind of business needs, which starts from BDT 3 Lac to10 Lac.

• No security required
• Overdraft facility
• Easy installment
• Easy loan processing.

Eligibility: Any kind of business having valid trade license, which has been operating at least 2 or more years.

Sole proprietorship, Partnership or Private Limited company

Small & mid-sized businesses (Production, Trading, Service, Agro based products and others)

APURBO SME Loan:

APURBO is a loan facility for Small & Medium Entrepreneurs. To meet any kinds of business needs, APURBO is offering BDT 1 million to BDT 5 million loan against registered mortgages.

Specialty of this loan

• Term loan and overdraft based on your business needs.
• Limited documents
• 10 to 50 Lac Loan
• Easy installment and overdraft facility

Eligibility:

• Any kind of business having valid trade license, which has been operating at least 3 or more years.
• Those who have property/land/building

PROTHOMA SME Loan:

Prothoma is a term loan for small scaled business operated by women entrepreneur, Maximum BDT 1 million is offered to meet business needs.

• No security required
• As low as 10% interest rate
• Tenure from 1 to 4 years
• Easy loan processing

Eligibility:

• Any kind of business having valid trade license, which is at least 2 years of old.
• Sole proprietorship, Partnership or Private Limited Company
• Small & mid-sized business (Production, Trading, Service and others)

DURJOY SME Loan:

To meet your business needs DURJOY is offering BDT 3 Lac to BDT 2.5 million Loan without any security.

Specialty of this loan

• Up to BDT 25 Lac loan in the name of business
• Easy installment up to 5 years
• Convenient interest rate
• Overdraft facility

Eligibility:

• Any kind of business having valid trade license, which has been operating for at least 3 years.
• Sole proprietorship, Partnership or Private Limited Company
• 1 year bank statement

SHOMRIDDHI SME Loan:

To meet import-export related expenses, post import expenses, tax/duty payment, local bill purchase and working capital, SHOMRIDDHI loan is offering BDT 1 Lac to BDT 10 million.

• LC and LATR facility
• Revolving loan, overdraft
• Local bill discounting facility

Letter of Credit (LC)/Loan against trust receipt (LATR)

• LC opening facility: from BDT 1 Lac to BDT 10 million
• Up to 90% loan against LC

Revolving Loan

• Import duty payment or goods purchase facility
• Loan up to BDT 10 million

Local Bill Purchase

• Loan up to BDT 10 million in export

Specialty of this loan

• Easy loan processing
• Convenient interest rate
• Loan payment facility up to 180 days.

Eligibility

• Any kinds of businesses having valid trade license and which has been operating for at least 3 years.
• Sole proprietorship, Partnership or Private Limited Company.

 SHOMPOD SME Loan:

SHOMPOD is a loan facility starting from BDT1 million to BDT 35 million against home or business premise mortgage.

Specialty of this loan-

With overdraft facility which will help to meet your working capital need.

• Loan against home or business premise mortgage to meet business needs.
• Loan is also available to purchase business premise
• Up to BDT 35 million loan facility
• Installment facility up to 10 years
• Convenient interest rate