Perception of Customer about Southeast Bank Loan Offering

This report is mainly focused on the Perception of Customer about southeast Bank Loan Offering. Other objectives are find out the customers perception and find out what types of loan they have taken. Here also discuss to find out the purpose of taking loan and draw SWOT analysis based on Loan Offering. Finally find out their satisfaction level about Southeast Bank loan offering and find out the reason of taking Southeast Bank loan.

Problem Statement

“The Perception of Customer about southeast Bank Loan Offering is unknown”

Justification of the problem statement

Southeast Bank Limited is a fast growing modern banking institution having a unique corporate culture & friendly working environment. They also provide high quality financial services with the help of latest technology. Southeast Bank mission is providing fast & accurate customer service, high standard business ethics, Innovative banking at a competitive price. They offer different type of services like- Account opening, Clearing, Loan offering, Export & Import, Locker etc.

Southeast Bank offer time loan, term loan, consumer loan, demand loan etc. Most of the customers try to take time loan or Consumer credit scheme (CCS) loan. They take loan for different purpose. Some customer take loan for their personal consumption, some customer takes loan for buying car or business purpose or any other reason. Most of the time customer want good environment, better service and good behave from the stuff. Customer wants low interest rate to take the loan. Some times customers need loan very frequently then they want to take loan very quickly. Most of the time customers take loan against their FDR. Southeast bank don’t give loan any risky sectors. Which customers unable to bring the loan they don’t give loan this type of customers. Some times few customers don’t make their loan against cash back in the proper time.  Therefore there are some problems Southeast Bank is facing in promoting and in motivating customers to take the loan. So, we need to know customers perception about SBL loan offering.

So, the problem is “The Perception of Customer about southeast Bank Loan Offering is unknown”

Objectives of the study:

Broad Objective

The broad objective of the research is to find out “the Perception of Customer about Southeast Bank Loan Offering”.

Specific Objectives

The specific objectives of the research is to:

• Find out the customers perception about SEBL.
• Find out what types of loan they have taken
• Find out the purpose of taking loan
• Find out their satisfaction level about SEBL loan offering.
• Find out the reason of taking SEBL loan

Methodology

Sampling Frame

Sample frame is a representation of the elements of the target population. It consists of a list or set of direction for identifying the target population also called working population. My sampling frame was all of the customers of Southeast Bank in Dhanmondi Branch who take loan. So my sampling frame was conveniently available customers of Dhanmondi Branch.

Sampling Technique

I have done Non-probability convenience sampling for conducting the research. The reason behind not choosing probability sampling is mainly time. I would use probability sampling but it would take time for collecting data. Non-probability convenience sampling facilitates me to collect data when I feel comfortable to collect data.

Sample Size

Sample size is a number of elements to be included in a study. My sample size was 40. Though sample size should be chosen by different methodology and should be representative to the population size but because time and other constraints I had to choose small size of sample size. So I conducted my survey with the sample size of 40 respondents.

Methods of Collecting Data

The source of collecting data will be based on both primary and secondary source.

Primary Source

The primary data was collect by discussion with officials of Southeast Bank and face to face conversation with the clients by using the questionnaire for SEBL customers. It also collected the data from the practical deskwork.

Secondary Source

For conducting the research I have taken help from different Employees of SEBL, Annual report and Internet. I have also taken help from different people who have knowledge about SEBL. Different publications of SEBL, unpublished data received from the branch and different text book.

Company Overview:

Southeast Bank Limited is a fast growing modern banking institution having a unique corporate culture & friendly working environment which unites our people towards achieving tremendous results in every aspect of Bank’s operations. Southeast Bank Limited is a second generation leading private commercial Bank in the country with a vision to be the leading financial institution in the country having a diverse array of carefully tailored customer friendly products and financial services in the Bank which unites our people and results in continuous growth in every aspect of Bank’s operations. Southeast Bank Limited is a scheduled commercial bank in the private sector established under the ambit of Bank Company Act, 1991 and incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations on May 25, 1995. During this short span of time the Bank is successful in positioning itself as a progressive and dynamic financial institution in the country. The bank had been widely acclaimed by the business community, from small entrepreneurs to large traders and industrial conglomerates, including the top-rated corporate borrowers for its forward – looking business outlook and innovative financial solutions. Thus within this very short period of time it has been able to create an image and earn significant reputation in the country’s banking sector as a Bank with Vision. Presently, it has 46 branches. . Southeast Bank Limited has been licensed by the Government of Bangladesh as a Scheduled commercial bank in the private sector in pursuance of the policy of liberalization of banking and financial services and facilities in Bangladesh. In view of the above, the Bank within a period of 10 years of its operation achieved a remarkable success and met up capital adequacy requirement of Bangladesh Bank.

Accounts Opening:

Southeast Bank provides different types of deposit. The different types of accounts are very commonly in practice:

• Current Deposits (CD)
• Savings Bank Deposits (SB)
• Short term deposits (STD)
• Fixed Deposit receipts (FDR)
• Monthly saving scheme (MSS)
• Cash credit (CC)
• Consumer credit scheme (CCS)
• Security overdraft (SOD)

Account opening formalities: 

The client needs to open a current or savings account with the bank to get any kind of credit facility.  The client can request for loan individually or jointly. The required documents for opening of accounts of different types are given below:

Common Documents for all types of accounts:

• A/C opening form(single copy)- duly filled in, signed by the client and introduced by an existing account holder
• Signature card- dully filled in, signed and introduced
• Photographs (2copies for each individual) of the account holder(s) duly attested by the introducer
• Copy of first five pages of passport(s) of the account holder(s)
• Photocopies of national ID card.

Individual: Current / Savings Account

• A/C opening form(single copy)- duly filled in, signed by the client and introduced by an existing account holder
• Signature card- dully filled in, signed and introduced
• Photographs (2copies for each individual) duly attested by the introducer

Proprietorship: Current/ Savings Account

• A/C opening form(single copy)- duly filled in, signed by the client and introduced by an existing account holder
• Signature card – duly filled in, signed and introduced
• Trade license
• Mandate agreement form (Nominee form), if applicable

Partnership: Current/Savings Account

• Trade license
• Partnership deed
• Resolution outlining instructions for operation of the account

Private Ltd.: Current/Savings Account

• Memorandum and articles of association duly attested by the managing director/company secretary
• Certificate of incorporation
• Resolution as to operation of the account
• List of directors

Public Ltd.: Current/Savings Account

• Same as Private Ltd. company including certificate of commencement of business.

Function of foreign Exchange department:

Foreign Exchange department of Southeast Bank is divided in to two parts.

Export:

• Pre-shipment advantages.
• Negotiating of foreign bills.
• Exports guaranties
• Purchase of foreign bills.
• Advance against bills for collection.
• Advising / conforming setters (latter of credit).
• Advance for differed payments exports.

Imports:

• Bills for collection
• Advance bills.
• Opening of letter of credit (L/C)
• Import loan & guarantees.

The most commonly used document in foreign exchange:

• Documentary latter of credit.
• Bill of exchange
• Bill of lading
• Commercial invoice
• Certificate of origin of goods
• Inspection certificate
• Packing list
• Insurance policy
• Pro-forma invoice / indent

Form of Transport document:

• Marine or ocean transport document
• Air transport document
• Road transport document
• Rail transport document
• Courier and Postal Transport Document

Advising of Letter of Credit:

Advising means forwarding of a Documentary Letter o credit received from the issuing bank to the beneficiary (Exporter).

Before advising a L/C the advising bank must see the following:

• If the export L/C is intended to be an operative cable L/C Test Code on the L/C invariably be agreed.
• Signature of issuing bank officials on the L/C verified with the specimen signatures book of the said bank when L/C received.
• L/C scrutinized thoroughly complying with the requisites of concerned UCPDC provisions.
• L/C advised to the beneficiary (Exporter) promptly and advising changes recovered.
• Entry made in the L/C Advising Register.

Commercial invoice:

A commercial invoice is the accounting document by which the seller changes the goods to the buyer. A commercial invoice normally includes the following information:

• it must be issued by the beneficiary named in the credit
• it must be made out in the name of the applicant
• description of goods exactly as started in L/C
• price of goods
• shipping marks exactly as appears in the Bill of Leading
• Contract number
• Issuing date

Credit Facilities Offered by Southeast Bank:

Credit facilities offered by Southeast Bank Limited can be classified based on – whether actual outflow of cash takes place or not and the type of borrower availing the credit facility or more precisely, the borrower’s motive for obtaining the credit facility.

Funded Credit:

The borrowers must open a current account with the bank to get the facilities of funded loan.   They have to pay interest against the funded credit facilities and service the loan upto a fixed expiry date. In funded credit, the actual outflow of cash takes place. Different types of funded credits are discussed below:

Continuous Loan:

The clients are allowed to withdraw from and deposit to the current account cash at any time against a sanctioned limit. Best example of this type of continuous loan is overdraft.

Demand Loan:

In this type of credit scheme, the clients are also allowed to withdraw from and deposit to at any time but the disbursement of cash should be in one shot while the repayment is made in one shot or at intervals. Examples of demand loan are, IBP, Trust Receipt, Packing Credit, Time Loan, etc.

Term Loan:

There are three types of term loans:

Nonfunded Credit:

In this type of credit facility, the actual outflow of cash does not take place unless some exceptional events occur. Under this type of credit facility, the Bank promises a beneficiary on behalf of the borrower to pay a certain sum of money against the beneficiary’s claim provided certain events like, non-performance of a work occurs. Examples of non-funded credit are – Bank Guarantee and Letter of Credit. While allowing non-funded credit, the Bank charges certain percentage of the face value of the credit facility allowed as commission and creates a liability in the client’s name which is contingent in nature. When the client fails to perform the stipulated work against the non-funded credit, the claim of the beneficiary has to be met by the Bank and the non-funded credit becomes funded with the actual outflow of cash. However, in the case of letter of credit, the importer or the Bank’s client has to pay for the goods imported even if the goods are not according to his specifications.

Apart from the classifications of loans and advances based on actual outflow of cash, the credit facilities allowed by the Bank can also be divided into the following three types according to the type of borrower availing of the loan facility:

• Personal Credit
• Commercial Credit
• Industrial Credit

 Personal Credit:

The characteristics of personal credit facilities are:

1. Taken by individuals
2. Low interest rate
3. Short time required for disbursement of the loan

1. Backed by cash security or personal guarantee
2. Guarantors having good net worth or social reputation
3. Expiry of 1-2 years
4. Requires strong monitoring for recovery of loan
5. No CIB inquiry made against the borrower
6. Loan amount generally ranges from Tk. 50,000 to Tk.10,00,000. (Exceptions are cash backed loans in which even Tk.50.00 lac is disbursed against cash security having face value of Tk.50.00lac or more)

Personal Credit facilities can further be classified in the following two segments:

• Cash Backed
• Secured by personal guarantors

Cash Backed:

These are generally overdraft facilities allowed by the Bank against FDR or DPS in the name of the borrower or a third party as a security. In this case, the customer is allowed to overdraw his/her current account by drawing against a sanctioned limit within a certain period of time but not exceeding more than one year, against acceptable securities. The overdraft limit is then renewed upon request from the client after the fixed expiry for a further period of 1 year.

The Bank also allows time loan or term loan against cash securities. The branch credit committee is the authority approving credit facility against cash security and the permissible margin against cash credit is 10% of the face value of the security.

Secured by personal guarantee:

Personal Credit is also allowed against personal guarantee of reputed and financially solvent persons. In that case if the borrower fails to repay the installment or total loan amount the guarantor is liable to repay the loan. Consumer Credit Scheme is the most common example of this loan. Since the personal guarantee of a person is quite fragile in nature, sometimes this type of credit is mentioned as Unsecured Loan as well and entails high interest rate. Consumer Credit Scheme (CCS) is offered to the borrowers who want to buy commodities like computer, refrigerator, television, vcd player or household furniture or appliances. The interest rate is 12% per annum and time duration is maximum 36 months. The bank finances up to Tk.3, 00,000 but not more than 75% of cost of the product to be purchased.

Besides, SBL provides a special type of personal credit, which is a term loan for financing the construction of a residential building or for purchasing an apartment. In that case, the borrower should be the owner of a piece of land or the apartment to be bought and submit the following documents to the Bank :

• Estimated cost of building the house by professional engineers
• A copy of permission from DIT or any other authority
• Deed signed between the developer and the purchaser of the apartment if the loan is for purchasing an apartment.
• Original sale deeds of the land and bia deeds (former deeds in the chain of ownership).
• Porchas and mutation certificates in the name of the owner of the property
• Non-encumbrance certificate
• Duplicate carbon receipt and ground rent receipt marking clearance of all types of land tax and holding tax.
• Layout plan

 Commercial Credit Facility:

The commercial credit facilities offered by SBL have the following characteristics:

1. Taken by business firms.
2. High interest rate.
3. Loan disbursement processing is lengthy.
4. Generally backed by cash flow generated by the business, stock in trade, and mortgage of property.
5. It has expiry of 1-5 years.
6. Strong monitoring for recovery the loan (specially in the case of work order finance) is required.
7. In this case CIB inquiry is mandatory.
8. Loan amount ranges from 10 lac to 2 crore.

Most common types of Commercial Credit are :

1. Overdraft
2. Time Loan
3. Letter of Credit
4. Bank Guarantee
5. Trust Receipt
6. Inland Bill Purchase
7. Packing Credit

Overdraft :

The business firms take overdraft for meeting working capital requirements in the business. The nature of the loan is continuous and allowed for 1 year. The security held against the facility are : sales proceeds, stock in trade, landed properties, cash securities, etc.

Time Loan:

The time loan facility is taken by the business firms for needs for fund to be met in one shot. Example can be, deposit of security money to participate in a bid. The repayment can be at intervals but the disbursement is in one shot. The maximum tenure of a time loan is 1 year.

Letter of Credit:

As discussed above, letter of credit, a very common type of non-funded credit is used for either import of goods or export of goods. When used for import of goods, the letter of credit facility is opened by the borrower with the Bank and it is sent to the exporter’s Bank for checking and agreement. If the terms and conditions stipulated in the L/C are agreeable to both the parties, the goods are exported and the borrower sends payment to the exporter’s Bank. In the case of export L/Cs the goods are shipped and then payment is received from the importer’s Bank by the borrower through SBL and SBL charges commission for the service.

Bank Guarantee:

It has also been discussed under non-funded credit above. SBL issues the following types of Bank Guarantees –

1. Bid Bond
2. Performance Guarantee
3. Advance Payment
4. Payment Guarantee
5. Counter Guarantee

Southeast Bank Limited Rating Report

CRAB Ratings:

Date of Rating:     30 March 2008

Validity:               One Year

Credit Rating Agency of Bangladesh (CRAB) has assigned “A₁^” (Pronounced Single A One) rating in the long term and ST-2 rating in the Short term to the Southeast Bank Limited (SEBL).

Commercial Banks rate as “A₁^” in this long term belong to “High Satisfy” cohort. In this grade, Companies are adjudged to be strong Banks, Characterized by good financials, healthy and sustainable franchises, and a first rate operating environment. This level of rating indicates strong capacity for timely payment of financial commitment, with low lifelikeness to be adversely affected by foreseeable events. At the same times, banks rated as ST-2 in short term grade belongs to High Grade are Characterised with commendable position in terms of internal fund generation , access to alternative sources of funds and moderate level of liquidity.

SEBL operate its banking operation by setting up 41 branches including 5 in shariah based operation. As of 31 December 2008, the paid up capital of SEBL was BDT 2.28 billion. Banks paid –up capital and statutory reserve together was BDT 2.72 billion at end of year 2007, while the regulatory requirement requires capital base of BDT 2.00 billion to be attained by June 2009. In 2007, Risk weighted capital adequacy ratio was 12.99% which was 10.24% in the year preceding. SEBL’s major shareholder are public (58.51%) followed by sponsors (28088%). However, no single sponsor shareholder individually held more than 3% of the total shares as of end of year 2007. At the end of year 2007, SEBL deposit and loan & advances became BDT 55.47 billion and BDT 48.47 billion, with growth rates of 20.45% and 15.485% respectively.

In 2007, net interest income stood at BDT 1.56 billion while it was BDT 1.06 billion in the preceding year (growth 46.40%). On the other hand, non- interest income of the Bank become BDT 2.26 billion in 2007, which had grown by 36.37 %. Spread of SEBL was 4.82% in 2007 in compared to 4.31% in 2006.

SEBL’s total assets at the year end 2007 were BDT 64.37 billion, with an increase of 17.41% over the previous year. Gross NPL ratio of SEBL declined to 3.54% in 2007 in compared to 3.79% in 2006. However, during the same year, rescheduled and written off loan were BDT 996.58 million and BDT 207.94 million respectively, which were found to be much higher compared to those of previous year. SEBL investment in government securities and quoted shares has substantially increased in 2007.

Net interest margin of SEBL was increased to (3.48% in 2006). Investment yield was grown up to 12.99%, which was only 7.72 % in the year preceding. Return on Average Asset (ROAA) of SEBL has an increasing trend over first few years. SEBL ROAA figure short up to 4.36% from 3.34% in 2006. During 2007, Bank’s Return on Average Equity was almost uncharged and became 46.36%. Internal capital generation was declined to 30.70% in 2007 from 37.48% in the year proceeding mainly because of increase in equity.

Deposit composition of SEBL was dominated by term deposit with 85.47% of total deposit following by current deposit 7.10% and saving deposit (6.19%). In 2007 SEBL earned interest income of BDT 230.30 million from call lending whereas incurred interest expense of BDT 50.90million for call borrowing. All this depict much better liquidity position in 2007 than that of 2006. SEBL also gained from investments in the bullish stock market in 2007. In 2007, interest income from Treasury bill was BDT 248.75 million in 2-007 from capital market investment vis-a vis BDT 16.80 million in 2006.

During 2007 SEBL showed its strength in profitability, liquidity position and business growth. SEBL also maintained comparatively lower interest spread than that of it’s peer median. However the Bank remained exposed to large loan exposures during the year 2007, and has had significant amount of loan rescheduling and write-off. Bank also requires up gradation of it’s the present automation status for the banking operation.

Performance Analysis

Southeast Bank is a commercial bank involved in providing banking services. The bank provides deposit products, lending products and foreign currency products. It also offers Islamic banking, credit card services, locker services and saving schemes. The bank primarily operates in Bangladesh, where it is headquartered in Dhaka and employs about 1,231 people. The bank recorded revenues of BDT 4,039.4 million (approximately $60 million) in the fiscal year ended December 2008, an increase of 5.8% over 2007. The bank’s operating profit was BDT3, 012.6 million (approximately $44.7 million) in fiscal 2008, an increase of 3.3% over 2007. Its net profit was BDT 887.2 million (approximately $13.2 million) in fiscal 2008, a decrease of 27.5% compared to 2007.The company recorded revenues of BDT3, 818 million in the fiscal year ended December 2007, an increase of 40.3% over 2006. Its net profit was BDT 1,223 million (approximately $18.2 million) in fiscal 2007, an increase of 34.4% over 2006.

So we can say that, During 2007 SEBL showed its strength in profitability, liquidity position and business growth. In 2008 their net profit was decrease compared to 2007.So SEBL should follow better business strategy to improve their profits and position.

Results and discussions

Sex 

In my research I wanted to know that which types of customer takes loan more Like- is it Males or Females. Around 67.5% of the respondents are male which is 27 from 40 respondent’s and. 32.5% of the respondent are female and they are 13. As we perceive that females are still not as much active as males in getting loans to do any kind of business or other activities. But the interesting thing is loan officers also try to avoid female customers for giving loan because they think these customers are more risky or volatile. Those customers who take loan from SEBL, maximum of them take loan against their FDR. That means bankers are not willing to take risk. Often male customers came here to take the loan. So, from my data and observation I can definitely say that the maximum numbers of respondents who take loan from banks especially from SEBL are male.

Age

Around 47.5% of my respondents who take loan from SEBL, their age are from 40-50 and around 35% of the respondents who take loan from SEBL their age are from 30-40. It means that around 82.5% of my respondent’s age is between 30-50 and who takes loan. It indicates that majority of loan takers age is between 30-50 years. Other numbers are negligible like, 50-60=12.5% and 20-30 is 5%.Interesting thing is no one above 60yrs was taking loan. It means after that age no one is willing to take loan or bankers are not willing to give loan.

Occupation

During my Internship I observed that most of the time service holders are the major clients to take loan. Loan officers are more willing to give them loan instead of businessman. They think this is less risky because service holders have a fixed income it means banks are more emphasizing on retail banking.  Around 67.5% of the respondents are doing service. There were different categories in service holder’s like- Bankers, Doctors, Employees of different organization, Engineers etc. Around 25% of the respondents were businessmen, who are doing different types of business. Some of the big companies have taken loan from SEBL Like- Bishwas Group, SKY Lark Fashion Ever Lasting, Westmont polycot etc. Very few House Wives taken loan from SEBL, because condition of giving loans to house wives was not suitable, loan officers try to avoid house wives. 7.5 % of the respondents are house wife. I didn’t get any students who have taken loan from SEBL because SEBL don’t give any loan to the students or I would say they yet to have any loan scheme for students. During my survey I didn’t see any retired person taken loan.

Educational Background

During my survey I didn’t have any respondents whose Educational Background is Primary, SSC or HSC. Most of the respondents were completed graduation or others. Around 37.5% of the respondents completed their graduation and doing jobs, business and some were house wife. When I was doing my survey I asked the respondents what is their educational background and their occupation and I give some option like- SSC, HSC, Graduate or Others. I just wanted to know educational background and occupation is how much correlated. Around 62.5% of the respondents tick in the others, which means their educational background is post graduate, MBA, Masters, Doctorate, Engineer etc. Here large numbers of respondents are male & very few were female and all of them doing good jobs in different organization, banks, companies or hospital. So I can say that most of the time educated people take loan. It means uneducated people or those who have low literacy rate do not actually want take loan from the bank, or they think it is a big hassle for them.

Monthly Income

Around 45% of the respondent who take the loan their monthly income is 20,001-40,000. The number indicates that those who have the income range of twenty to forty thousand, they are the major customers of banks for taking loan or I would say they have more need to take loan.  Very few of the respondents who take the loan their monthly income are 1-20000. Their number is very low because people of lower income do not actually go to banks to take loan in the other hand banks are also not willing to give loan to lower income people and their percentage is 5%. Around 20% of the respondents who take the loan their monthly income are 40001-60000. Some of the respondents who take the loan their monthly income are 60,001-80,000. Their percentage is 22.5% and frequency is 9.Some of the respondents who are doctors or doing higher quality of jobs their monthly income is more then 80,000. So for my survey I can say that, those people who have monthly income of 20001-40000 or more they are more likely to take loan.

Customers Perception about SEBL

By my survey I found out that most of the customers have good perception about SEBL. Around 57.5 % of the respondents have very good perception about southeast bank Limited. They are the loyal customer and they have good relation with the Stuff. Most of the customers like SEBL officers because of their good behavior. Around 42.5% of the respondents their perception is good about southeast bank. During my survey I didn’t find one respondent whose perception is bad or very bad about southeast bank. Those who take loan from SEBL, their perception is very good or good about SEBL. And that’s why they come here and take loan. They also told me that they are satisfied about southeast bank environment, services, behavior. So it is a good sign for SEBL that not single customer is dissatisfied with SEBL.

How much knowledge do you have about SEBL loan offering?                                                      

For my survey I asked the respondents, how much knowledge they have about SEBL loan offering. I found that, 90% of the respondents have good knowledge about SEBL loan offering. Some of the respondents have taken loan before that’s why they know. And some of the respondents know about SEBL loan offering from their family members or others sources. 7.5 % of the respondents have very good knowledge about their loan offering and they also know what types of loan they offer and how to get this loan. What are the terms and conditions they follow to give loan? 2.5% of the respondent has average knowledge about SEBL loan offering. They tick average because they do not have much knowledge about their loan offering. They told me that they have FDR that’s why they came here to take the loan.

Have you taken loan from any where before?

Some of the respondents have taken loan many times and some of the respondents taking loan first time. Around 62.5 % of the respondents have taken loan before from this bank or from other sources or I would say from other banks. Around 25 from 40 respondents have taken loan before. Some of the respondents taken loan from this bank or some of them take loan from other banks. 37.5% of the respondents didn’t take loan before from any where.

If yes, what’s type of loan?                  

Here 37.5% of the respondents didn’t take loan before. Around 32.5% of the respondents have taken time loan before. 10% of the respondents have taken term loan before. And 20% of the respondents have taken CCS loan before. Most of the customers preferred time loan and CCS loan. Loan officers also try to give time loan because these loans have low risk. Loan officers always try to give loan to the less risky schemes. It is because they don’t want to take any risk or it is their traditional tendency.

Do you feel any problem for that loan?

Every private bank tries to give their best services because of intense competition in banking sector. Southeast Bank also tries to provide better service. The more the process is easy the more the customer will feel comfortable to bank with. Whenever a customer comes to take the loan to SEBL, loan officers tries to do good behave to make them more comfortable and tries to how quickly they can give their service to that person. When I asked them, what ever loans you take before did you feel any problem for that loan? To that particular question I found that, 65% of the respondents didn’t feel any problem for the loan. Only one respondent said that he face problem to take loan. So the overall perception is good about the processing of loan.    

It is your first loan?

My number of respondents was 40 and around 37.5% of the respondents were taking loan for the first time. About 15 respondents didn’t take any type of loan before. About 25 of respondents have taken loan more then once, their percentage is about 62.5%. Some big companies take loan for their business more often. So the result says that Maximum number of people have taken loan for more then one tine. It means whoever takes loan once they again take loan.

Which type of loan you have taken recently?

Southeast Bank offer’s different types of loan like-Time loan, Term loan, Consumer Credit Scheme (CCS), Demand loan etc. During my survey I saw that, around 62.5% of the respondents take time loan. Most of the time, the time loan facility is taken by the business firms for short term liquidity or for the instant makeover of any shortage of fund. The maximum tenure of a time loan is 1 year. Customer can get time loan very easily and loan officers also try to give them this loan because it is less risky. We all know that less time means less risky for the bank. About 15% of the respondents take Term loan. Term loan is the type of loan which customers can take for more then one year. There are three types of term loans:

For different purposes they take term loan like- Land, Building, Industry, Project etc. Around 17.5% of the respondents take CCS (Consumer Credit Scheme). Consumer Credit Scheme (CCS) is offered to the borrowers who want to buy commodities like computer, refrigerator, television, VCD player or household furniture or appliances. The interest rate is 12% per annum and time duration is maximum 36 months. Southeast bank offer another type of loan which is demand loan. Demand loan means, the clients are also allowed to withdraw from and deposit to at any time but the payment of cash should be in one shot while the repayment is made in one shot or at intervals. Examples of demand loan are, IBP, Trust Receipt, Packing Credit, Time Loan, etc. SEBL offer demand loan only for their internal stuff.

What is your purpose of taking this loan? 

On my survey I have found that customers take loan for different purpose. 5% of the respondents were taking loan for house building purpose. Loan officer generally do not prefer to give loan for house building purpose. Those customers who have strong relationship with the managers or big officer in the SEBL they can get this loan. Stuffs of the southeast bank can get this loan for house building purpose. Because of the tight procedure, I found that very few people are taking loan for house building purpose. Around 32.5% of the respondents are taking or have loan for buying a car. Most of the time respondents take car loan against their FDR. For this loan, loan officers do some special inquiry. Around 12.5% of the respondents have taken or were taking loan for business purpose. Some big companies take loan regularly for their business purpose but during my survey I have got some small businessman. But the interesting thing is I got a businessman who is doing crocodiles business and taking loan for that business. Around 50% of respondents take loan for their personal purpose. So majority of loans are taken by customers for their personal use which is not a good sign because the fund is not used in any productive sector.

When do you make your loan against cash back?

My total numbers of respondent was 40. When I asked 40 Respondents, when do you make your loan against cash back and there was two options like before due date or after due date. All of them told me that they make their loan against cash back before due date. We all know that some of the customers make their loan against cash back after due date, But during my survey I didn’t find any respondents. So by my survey I found that 100% of the respondents try to make their loan against cash back before due date. When loan holders don’t pay their loan against cash back before due date then loan officers send a request letter to the loan holders to pay their cash back.

What is your satisfaction level of SEBL Environment? 

Customer’s satisfaction is very important for any bank. Most of the private banks try to provide good environment for their customers. That’s why southeast bank also provide good environment. In my survey I have found that 50% of the respondents are highly satisfied about southeast bank environment. Respondents told me, SEBL environment is very good that’s why they come here for banking and take loan. Around 50% of the respondents are satisfied about SEBL environment. During my survey I didn’t find a single respondent who is highly dissatisfied or dissatisfied about their environment. So I can say that 100% of the respondents are highly satisfied or satisfied with SEBL environment of banking.

Summary of Findings

1. Most of the customers have good perception about SEBL.
2. Majority of customers are taking loan for their personal needs.
3. Bank is not interested to give loan to risky sectors like business etc rather interested to give loan to buying cars or other purpose.
4. Females are not encouraged to take loan or bank is not interested give loan to house wife that’s why numbers of house wife are very less.
5. Maximum clients come to SEBL for good service not for lower interest rate.
6. Almost everyone is satisfied with SEBL customer service.
7. Most of the clients come to SEBL for taking time loan.
8. Majority of the clients are service holder not businessman because bank encouraging consumer loan rather business loan.
9. Maximum customers take loan against FDR and bank is also give this loan very easily because it has least amount of risky.

Recommendation

1. Bank should encourage business loan rather consumer loan that will be helpful for the economy.
2. The SEBL may encourage Female entrepreneurs to take loan that will directly affect the socio economy of our country and it will help to strengthen our economy. Only men’s can’t forward our country in today’s world.
3. Term loan should be encouraged so that businessman’s can take this loan easily.
4. Should emphasis on promotion to create a strong brand value, in today’s world there is no alternative to promote your brand.
5. SEBL should diversify its lending sector to reduce the risk of defaulting.

Conclusion

Banking sector of Bangladesh has undergone dramatic changes since the independence in 1971. For Society revolution, money and Banking system started their journey. The changing of need made an effect on Banking system and Banking system started to develop the system. Private Banks play an important part in promoting economic development of Bangladesh. Banks provide necessary funds for executing various programs underway in the process of economic development. Southeast Bank Limited is a scheduled commercial bank in the private sector established under the ambit of Bank Company Act.. In conclusion we can say that bank loans are now days diversified in to consumer loans from business loans. Banks are now more likely to give consumer loans than business loans. It is causing to have fewer entrepreneurs to come forward to take the challenge. Females are still not getting enough support to take loan or they are simply discouraged to take loan because banks are still thinks that they vulnerable and more risky to give loan specially SEBL thinks like that. So there should be a change in their thinking to stop discrimination between men and woman. Long term loans should ease up to give businessman’s more flexibility to have that kind of loan which will have a big impact on the economy. Because the more long term loan will be taken the business farms will emerge and more employment opportunity will be created. One thing is very positive about SEBL that not a single a customer is dissatisfied with their any kind of service and is very impressive for any service organization. There are certain areas of improvement those can be done to have greater impact on the consumers mind about SEBL though they have good service but it can be better starting own ATM’s rather depending on others. So overall condition is not bad but it can be improved to go forward to the next level of service.