customer satisfaction on sme banking internship report

Customer Satisfaction on (SME) Banking of Al-Arafah Bank Ltd
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Internship Report
on
“Customer Satisfaction on (SME) Banking of Al-
Arafah Bank Ltd.”
Submitted to
Lecturer
Department of Marketing,
Jagannath University, Dhaka.
Submitted By
Abdulla All Rakib
ID# M 17
EMBA, 11586th Batch
Department of Marketing.
Jagannath University, Bangladesh.

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Jagannath University, Bangladesh
Date of Submission: 20th July, 2019
Letter of Submission
20th July, 2019
Lecturer
Jagannath University, Dhaka
Subject: Submission of Internship Report.
Dear Sir,
It is a great pleasure for me to submit the Thesis Report on “Customer Satisfaction on (SME)
Banking of Al-Arafah Bank Ltd.” In preparing this report, I have tried my best to present all
the things to make the report more informative and a fruitful one. I hope that this report will
fulfill the requirement of the internship program as a partial requirement of completing EMBA in
Marketing.
In fine, I will be very grateful to you if you kindly accept this thesis report for evaluation.

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With best regards,
Abdulla All Rakib
ID# M 17110204578
EMBA, 11th Batch

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Acknowledgements
20th July, 2019
Lecturer
.
Dear Sir,
I am one of your advisees and I would like to extend to you my warmest appreciation for being a
great adviser to me. I will be Masters this academic year thanks in part to your good mentoring
and guidance in conducting and finishing my thesis. Your input and comments about my thesis
were all helpful in making it a significant thesis. Your advices were crucial in helping me make
the right decisions about how to proceed with my study.
I hope, my thesis will be chosen as one of the exceptional thesis this academic year. And it is
true that this research would not be completed without great help and support from you.
Again, thank you for everything. I wish you more success in your career.

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Respectfully,
Abdulla All Rakib
ID# M 17110204578
EMBA, 11th Batch

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STUDENT DECLARETION
The work I have presented does not breach any existing copyright and no portion of this Report
is copied from any work done earlier for a degree or otherwise.
I further undertake to indemnify the department against any loss or damage arising from Breach
of the foregoing obligations.
I do here by solemnly declare that the work presented in this thesis report has been carried out by
me and has not been previously submitted to any other University/ College/Organization for
academic qualification/certificate/diploma or degree.

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…………………………………………
Signature of the Preparatory with date
Abdulla All Rakib
ID# M 17110204578
EMBA, 11th Batch
SUPERVISOR’S CERTIFICATE
This is to certify that Thesis Report on “Customer Satisfaction On (Sme) Banking Of Al-
Arafah Bank Ltd.”. In the bona fide record at the Report is prepared by Abdulla all rakib ID#
M 17110204578. as a partial fulfillment of the requirement of Masters of Business
Administration (EMBA) program.

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The Report has been prepared under my guidance and is a record o f the bona fide work
carried out successfully.
………………………………………
Signature of the Supervisor with date
20th July, 2019
Lecturer

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Executive Summery
As a good sign of advancement Bangladesh is becoming the digitalized country of the world. By
taking the advancement of technology people are updating themselves day to day. Now people
would like to use credit card to make global transaction rather than carrying cash amount. In
such case bank has brought dynamic change in the present world. In Bangladesh, bank is playing
a vital role to the development of economic and socio- economic condition. Along with our
government is paying more concentration on the development of Small and Medium Enterprise
(SME). The primary goal of internship report is to identify the different sorts of factors of Al-
Arafah Islami Bank Ltd. that ensures the satisfaction of SME customers. Customer satisfaction
analysis evaluates customers’ attitude and perception towards product of a company. Analysis of
customer satisfaction is the precondition of success for any service organization. Al-Arafah
Islami Bank Ltd (AIBL) conducts an assessment of customers’ satisfaction in a regular interval.
The purpose of this study is to measure the satisfaction level of the customers of the company.
To reach the destination, the study toke 50 respondents to survey the customer satisfaction on
SME banking. In the extensive analyze, the report found that the SME customers of Al-Arafa
Islami Bank Ltd. agreed that they are satisfied toward the banking. The report also found that the
customers of AIBL from SME banking get on time service delivery as per their requirement.
Table of Contents
Sl.no Contents Page No
1.0 Chapter 1: Introduction
1.1 Introduction 1

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1.2 Background of the study 1-2
1.3 Rationale of the Study 3
1.4 Management problem 3-4
1.5 Research problem 4
1.6 Objectives of the Study 4-5
1.7 Methodology of the study 5-8
1.8 Literature Review 8-16
1.9 Scope of the Study 17
1.10 Limitations of the Study 18
2.0 Chapter 2: Organization overview
2.1 An overview of AIBL 19-20
2.2 Objectives of AIBL 20-21
2.3 Corporate Information At a Glance 22
2.4 Products & servicesof AIBL 22-24
2.5 Corporate culture 25
2.6 Corporate Social Responsibility (CSR)
2.7 Corporate Governance
2.8 Management of AIBL 26
2.9 Swot Analysis of Al-Arafah Islami Bank Ltd. 27-28
3.0 Chapter 3: Analysis & Findings
3.1 Analysis of customer satisfaction in SME banking 29-44
3.2 Major Findings 45-47
4.0 Chapter 4: Conclusionand Recommendations
4.1 Recommendations 48
4.2 Conclusion 49-50
Chapter 5:
5.0 REFERENCES 51
Chapter 6:
6.0 Appendix 1 52-70

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Chapter-1
1.1 INTRODUCTION
Today, the world is becoming closer and closer. Now world is called the global village. By
taking the advancement of technology people are updating themselves day to day. Now people
would like to use credit card to make global transaction rather than carrying cash amount. In
such case bank has brought dynamic change in the present world. In Bangladesh, bank is playing
a vital role to the development of economic and socio- economic condition. Along with our
government is paying more concentration on the development Small and Medium Enterprise
(SME). And today SME is contributing to the development of our economy through taking loan
facility of the bank.
Today is the era of competition in any business especially in the banking sectors in Bangladesh.
Banks are competing each other through best quality service. And some newly issued banks are
coming to enhance this competition. To measure the performance of bank, it is mandatory to
measure the satisfaction level of customers. Because today market is customer oriented. Some
Policymaker thinks that Customer satisfaction is an important indicator of national economic
health. Finally it can be said that the bank should pay more banking. Concentration on SME
banking as well as customer satisfaction toward the banking activities especially on SME.
1.2 BACKGROUND OF THE STUDY
This report is an Internship report prepared as a requirement for the completion of the MBA
Program of Jagannath University of Marketing Department. The primary goal of internship is to
provide on the job exposure to the student and an opportunity for translation of theoretical
conceptions in real life situation. Students are placed in enterprises, organizations, and research
institutions as well as in development projects. The program covers a period of 3 months of
organizational attachment. In this regard an organization attachment at Motijheel Branch of Al-
Arafah Islami Bank Ltd has been given me a period of two months commencing from 5thJune,

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2014 to 14th August, 2014. During this period I learned how the host organization works with the
help of the internal supervisor and what the corporate culture is and how to adjust with this
culture. These two months are an experience in my life.
1.3 RATIONALE OF THE STUDY
Customer satisfaction analysis evaluates customers’ attitude and perception towards product of a
company. Analysis of customer satisfaction is the precondition of success for any service
organization. Al-ArafahIslami Bank Ltd (AIBL) conducts an assessment of customers’
satisfaction in a regular interval. The purpose of this study is to measure the satisfaction level of
the customers of the company. Due to the entrance of new competitors, this assessment program
has become an important tool to know the market condition, customer’s attitude towards
competitors” services, customer behavior and experience at AIBL branches. It is so fruitful to
measure the satisfaction level of customer to compete with others. So marketer should focus on
customer and their GDP is increasing day by day. By considering this contribution of SME,
Banks as well as financial institutions are paying loan more and more. It is necessary to know the
satisfaction satisfaction by providing quality service to customer. So I want to measure the
customer satisfaction of SME banking facilities of AIBL. In Bangladesh, the contribution of
Small and Medium Enterprise on the level of customer of this department. So it seems to me that
I should measure the satisfaction level of customer of SME- Banking according its service
quality. This report helps the reader to know how Al-Arafah Islami Bank Ltd (AIBL) helps to
maximizing the loyal customer by providing quality services in SME sector.
1.4 MANAGEMENT PROBLEM
Satisfying customers is the only way to stay competitive in today’s marketplace. The balancing
act between what customers want and what company can provide must be optimized in order to
maximizing company’s long-term profits. Al-Arafah Islami Bank LTd already is in a good
position in the consumer mind but by understanding the customer satisfaction level; it will help
the company to exceed the present level of customer satisfaction. The bank currently wants to

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have aspiration of knowledge of the customer satisfaction level of SME clients, and how to
improve the level of customer satisfaction.
1.5 RESEARCH PROBLEM
To determine the effectiveness of current to stay closer to the customers AIBL undertakes an
assessment of the customers at a regular interval. To analyze the impact of AIBL’s marketing
tactics have on its SME customers and whether these tactics are effective or not are the major
concerns. To assess what level of consumer loyalty, satisfaction and awareness they have can
help to design future strategies to retain existing customers or to attract and obtain new ones. For
this study the research problems are as follows:
 To determine the customer satisfaction with the current SME loan, customer services
and the effectiveness of the competitor SME activities.
1.6OBJECTIVES OF THE STUDY
1.6.1 THE PRIMARY OBJECTIVE:
The primary objective of preparing the report is fulfilling the partial requirements of the MBA
Program of Jagannath University. The broad objective of the study is to assess the Customer
Satisfaction of SME banking in Bangladesh focusing on Al-ArafahIslami Bank Ltd. This has
been broken into following specific objectives:
1.6.2 SPECIFIC OBJECTIVE:
 To identify the satisfaction level of customers on SME banking of AIBL.

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 To find out the major factors that customer consider in case of SME-Banking.
 To identify the bank performance and management concern regarding the customer
satisfaction on SME-Banking.
 To focus on the impact on the rules & regulations of Bangladesh Bank in case of SME-
Banking in my Personal observation.
 To find out the key factors of customer satisfaction.
 To find out some problems faced by the AIBL in SME- banking and handling customer.
 To find out the necessary findings about my analysis of questionnaire.
 To reveal some recommendation for better performance of Al-ArafahIslami Bank Ltd
(AIBL).
1.7 METHODOLOGY OF THE STUDY
1.7.1 RESEARCH DESIGN:
Quantitative research design has been employed in this study. This research steps applied were in
accordance with scientific research design. According to Bodgan and Biklen (1982), under this
design, data collected was based on a predetermined instrument and the objectives developed
prior research. The variables under study are neither controlled nor manipulated, and no artificial
setting is crated for this study. The unit of analysis for this study is customers as respondents.
The findings of this study are tentative. A structured questionnaire was used.
1.7.2 SOURCE OF DATA COLLECTION:
1.7.2.1Primary sources:
 Most of the information was acquired by making face to face communication with the

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customers and officials of AIBL.
 A structured questionnaire was formed to collect responses from sample respondents.
1.7.2.2Secondarysources:
 Of using a small number of parts of a larger population to make conclusions about the total
population. For this research the following steps in the sampling design process was
followed:
 Annual Reports of Al-ArafahIslami Bank Ltd (AIBL).
 Various books, articles, compilations etc regarding customer satisfaction and tools of
measurement the satisfaction.
 Website ofAl-ArafahIslami Bank Ltd (AIBL) and other related web pages.
 Other Reports, Articles, Books regarding customer satisfaction.
1.7.3 SAMPLING PLAN FOR THE RESEARCH
Sampling is an important component for a research design. It is the process
 Target population
 Sampling frame
 Sampling Technique
 Sample size and
 Execution
1.7.3.1 Target population:
The target population of this research is SME customers of AIBL. Population is a collection of
all possible individuals, objects, or measurements of interest. All SME consumers in the country
are the concern population. But due to time and resource constraints the SME consumers in
Dhaka city are considered as the population.

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1.7.3.2 Sampling frame:
Sampling frame involves the regular SME clients of A-ArafahIslami Bank Ltd.
1.7.3.3 Sampling method:
The study consists of SME customers of Dhaka city and its surroundings. Simple random
sampling technique was used for sampling.
1.7.3.3 Sample size:
The study has been conducted on a sample of 50 customers of AIBL that have been conveniently
selected based on sampling technique.
1.7.4 Survey instrument:
A questionnaire was used to collect primary data for the study. The questionnaire contained
licker scale questions, ranking order question for knowing the customer opinion about the service
quality of SME-Banking in AIBL.
1.7.5 Data collectionprocedure:
Primary data and secondary data have been used to complete the study. To conduct the study
requires a bunch of information. To gather required information various secondary sources have
been used. Among them numerous research papers and articles on customer satisfaction and
official web site of Al-ArafahIslami Bank Ltd (www.aibl.com)got the highest priority. There
were some other important sources which helped as primary sources. The main source of
collecting primary data was to collect data through a structured questionnaire. The study
gathered data from the customers when they came for service at Al-Arafah Islami Bank Ltd
(AIBL).
1.7.6 Data analysis procedure:

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In the analysis part, the statistical named SPSS 16 was used. Data will first of all be keyed in on
the SPSS worksheet before the analyzing steps begin. SPSS program provides an easy task for
researchers in evaluating and managing information gathered from primary data. In addition, it
provides a lot of useful statistical tools for evaluating data in testing the study hypothesis. The
major statistical analysis tools used in this study can be easily calculated which are descriptive
analysis and statistical inference analysis. Frequencies and descriptive statistic (mean and
percentage) were used to explore information about the distributions of variables. Variance and
standard deviation were obtained to measure variability around the mean of a distribution.
1.8 LITERATURE REVIEW
Riding ,A 2006. In numerous nations, advance certification projects are significant components
of government approach concerning little and medium-sized ventures (SMEs). In the event that
advance certification plans are to be viable, a lion's share of firms getting help through such a
plan should not to have the option to get financing from existing sources: a property known as
incrementality or additionality. This paper portrays another way to deal with estimating
incrementality. This work utilizes a two-arrange procedure to appraise the incrementality of
credits made under the particulars of the Canada Small Business Financing (CSBF) program.
Initial, a calculated relapse based model of advance results (basically a credit-scoring model) is
assessed dependent on a huge delegate test of SMEs. The subsequent model was reliable with
earlier desires and displayed large amounts of decency of-fit. The model was then utilized to
group an example of firms that had gotten advances under the provisions of the credit
certification conspire. Steady advances should be named "turndowns" by the model; thus the
extent of credit ensure beneficiaries that the model delegated turndowns is an immediate
proportion of incrementality.
Judith J. Madill 2002.The primary goal of this empirical research study is to identify key
drivers of SME satisfaction related to a variety of aspects of the bank/SME relationship. The
research uses data from 3,190 interviews with key informants – identified as the person who
is most responsible for financial and banking decisions – in Canadian SMEs. Research
focused on how SME overall satisfaction is affected by the account manager’s management
of the bank/SME relationship, the branch staff’s management of the bank/SME relationship
and the bank’s policies and procedures regarding bank/SME relationships. All three drivers
were significantly and strongly related to SME satisfaction with the bank with which they
had their had their primary relationship.
Small and medium Enterpeise (SMEs) work in a similar situation as their bigger
counterparts,but without the related advantages, for example, sufficient capital and broadened
HR of the bigger associations. SMEs experience expanding aggressive weight fuelled by
globalization, enactment and the unwinding of exchange hindrances, just as an increment in
market extension because of developing advances and advancement. Little and medium ventures

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regularly thrive on their versatility and readiness, for example, their nearby vicinity to their
clients, their transparency towards better approaches for working, and their hazard adopting
strategy, however numerous miniaturized scale, little and medium venture are helpless to
significant outside stuns (Berry, 2002; Laforet and Tann,2006). In spite of the fact that SMEs
experience troubles in retaining and adapting to these impediments,have to build up a capacity to
manage the consistently expanding difficulties, that is, dangers looked by the
association.(Leopoulos, 2006).
Not so long ago, accessing our own money was about setting aside a couple of
hours, getting to the bank before closing time, standing in one queue to get a token
and then in another to collect the cash. Those were the pre-economic reforms days, when the
banking sector primarily consisted of public sector banks.
But at present the nature of banking has changed dramatically. With ATM cards, simple
banking transactions like withdrawing and depositing money are easier than ever
before. For the tech-savvy, there is the option o f banking online. Even when it
comes to products, the changes have been many. Graduating from simple savings
accounts and fixed, banks now offer a host of products like special savings account
and sweep-in-account and easy receive account.
1.8.1 CUSTOMER SATISFACTION:
“Customer satisfaction is the extent to which a product’s perceived performance matches a
buyer’s expectations” (Kotleret al.2012-13). It is seen as a key performance indicator within
business.
 Philip Kotler defines customer satisfaction means satisfying needs and wants through an
exchange process.
 According to Finance Dictionary customer satisfaction is the degree to which expectations
of a product or service are met or exceeded.
After analyzing this definition, we can say that customer satisfaction is the deference between
the performance and customer expectation of a product. If the performance of a product can meet
the expectation of a customer, he or she will be satisfied if not he or she will be dissatisfied.

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Because satisfaction is basically a psychological state, care should be taken in the effort of
quantitative measurement, though a large quantity of research in this area has recently been
developed. Work done by Berry (Bart Allen) and Brodeur between 1990 and 1998n defined ten
“Quality Values” which influence satisfaction behavior further expanded by Berry in 2002 and
known as the ten domains of satisfaction which include: Quality, Value, Timeliness, Efficiency,
Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors,
commitment to the customer and innovation. Along with, According to Garbrand, customer
satisfaction equals perception of performance divided by expectation of performance. The usual
measures of customer satisfaction involve a survey with a set of statements using a
Liker Technique or scale. The customer is asked to evaluate each statement and in term of
their perception and expectation of performance of the organization being measured.
1.8.2 REASONS OF MEASURING CUSTOMER SATISFACTION:
There are some reasons why companies are giving more emphases on measuring customer
satisfaction which are given below:
 Today, customers are becoming increasingly more demanding, less tolerant and very
critical when not having their expectations met.
 Customers have lots of choice in case of choosing products or services.
 Now customers are more powerful than previous time.
 Finally customers’ satisfaction leads to the brand loyalty and profitability.
1.8.3 SERVICE QUALITY AND CUSTOMER SATISFACTION:
Customer satisfaction and customer service are related but not the same thing. It is important that
financial marketers understand this. If a great deal of money and time are spent improving
customer service with little or no positive impact on customer satisfaction, then not much
headway is made and money is wasted (Motley. Biff, 2000).There is a great deal of discussion
and disagreement in the literature about the distinction between service quality and satisfaction.
The service quality school view satisfaction as an antecedent of service quality -

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satisfaction with a number of individual transactions "decay" into an overall attitude
towards service quality. The satisfaction school holds the opposite view that assessments of
service quality lead to an overall attitude towards the service that they call satisfaction.
There is obviously a strong link between customer satisfaction and customer
retention. Customer's perception of Service and Qualit y of product will determine the
success of the product or service in the market. If experience of the service greatly
exceeds the expectations clients had of the service then satisfaction will be high, and vice
versa.. In the service quality literature, perceptions of service delivery are measured
separately from customer expectations, and the gap between the two provides a measure
of service quality.
1.8.4 CUSTOMER SATISFACTION IN BANKING:
Financial liberalization and deregulation has increased the competition among banks to attract
potential customers. Banks are competing in a highly competitive environment to offer quality
oriented services according to customers’ expectations. Customers became a center for all
banking activities due to increased competition for greater market share. Banks also focus on
demographic characteristics of customers to assess their needs. Every bank is trying to enhance
its performance by improving its service quality according to customers' expectations. Every
banker tries to provide superior services to keep satisfied customers. In Bangladesh, emergence
and growing popularity of banking products raises competition among banks. Banks have to face
numerous challenges in the recent age. Firstly, they are competing with their peers and secondly,
they have to cope with the conventional banks.

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 Figure-1.1Expectation-Outcome Experience of Customer
Figure 1.1 reflects expectation-outcome experiences of customers among bank customers.
Customer satisfaction leads to better profitability by retaining existing customers and to attract
new ones. Every organization deploys a reasonable amount to have satisfied customers. Satisfied
customer leads to delighted customers that eventually create the sense of brand loyalty among
customers.
1.8.5 CUSTOMER SATISFACTION TOOLS AND STRATEGIES:
1.8.5.1 Complaint resolution process:
The process of using complaint resolution is used by organizations to track and analyze customer
complaints, ensure prompt response, help them learn from complaints to improve their services,
and hold them accountable for doing so. Say for example one of SME Client of AIBL complain
to Management of AIBL about its services. If the complaint will resolve, customer will

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delighted, if not, he may feel dissatisfied.
1.8.5.2Customersurveys:
Questionnaires, comment cards, follow-up calls, online surveys and other types of polls are the
most common method used by franchises and other businesses to assess customer satisfaction
performance. Organizations use a variety of techniques to understand how and why consumers
1.8.5.3 Customer behavior research:
Make choices. For example, a special team of AIBL evaluates the behavior of SME clients
before issuing loan and to learn the preference of customers
1.8.6 FACTORS OF INFLUENCING THE CUSTOMER SATISFACTION:
1.8.6.1 PRODUCT AND SERVICE FEATURES:
Customer satisfaction with a product or service is influenced significantly by the customer’s
evaluation of product or service features. For a service such as a bank, important features might
include the availability of branches, more services, more ATM booths, increasing mobile
banking like AIBL I- mobile banking , DBBL etc.
1.8.6.2 SERVICE RECOVERY:
Service recovery also affects directly customer satisfaction. Occasionally some businesses have
customers who are initially dissatisfied with a service experience and then experience a high
level of excellent service recovery, seemingly leading them to be even more satisfied and more
likely to repurchase (Zeithamal et al 2013).
1.8.6.3 DELIVERY TIME OF SERVICE:
Customers also evaluate the delivery time of service to measure their satisfaction level. Because
people now think that Time is Money. So they to save time as much as possible. For that reason,
toady’s bank industry is trying to provide mobile banking service.

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1.8.6.4 PRODUCT AND SERVICE QUALITY:
Satisfaction will also depend on product and service quality. Pars Parasuraman, Valarie Zenithal
and Leonard Berry identified five specific dimensions for service quality ((Zeithamal et al 2013)
these are:
 Reliability
 Responsiveness
 Assurance
 Empathy
 Tangible
1.8.6.5 PERCEPTIONS OF EQUITY OR FAIRNESS:
Customer satisfaction is also influenced by perceptions of equity and fairness. Customers need to
treat fairly, get better treatment, better prices or better quality services compared with other
customers. Satisfaction with a service provider following a service failure is largely determined
by perceptions of fair treatment.
1.8.6.6 EMPLOYEE ROLE OR DELIVERING SERVICE:
Customers, perceptions or service quality will be affected by the customer-oriented behaviors of
employees. In fact, all five dimensions of service quality (reliability, responsiveness, assurance,
and empathy, tangible) can be influenced directly by service employees ((Zeithamal et al 2012).
1.8.7 CURRENT STATUS OF SMALL AND MEDIUM ENTERPRISE IN
BANGLADESH:
The Small and Medium Enterprises worldwide are recognized as engines of
economic growth. The commonly perceived merits often emphasized for their

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promotion especially in the developing countries like Bangladesh include their
relatively high labor intensity, depe nde nce o n ind ige no us sk ills a nd
tec hno lo gy, co ntr ib ut io ns to e ntrepr e ne urs hip development and innovativeness and
growth of industrial linkages.
1.8.7.1 DEFINITION:
According to the latest circular of BANGLADESH BANK (Date: 26/05/2008), the definition of
Small & Medium Enterprise sector is given below:
SMALL ENTERPRISES:
Small enterprises refer to those enterprises which are not any Public Limited Companies and
which fulfill the following criteria-
 Service concern:
 Having and investment of TK. 50,000 to TK. 50, 00,000 excluding land & building and /
or Employing up to 25 workers.
 Business Concern:
 Having an investment of Tk. 50,000 to Tk. 50, 00,000 excluding land & building and /
or employing up to 25 workers.
 Manufacturing Concern:
 Having an investment of Tk. 50,000 to Tk. 1, 50, 00,000 excluding land &
building and / or employing up to 50 workers.
MEDIUM ENTERPRISES:
Medium enterprises refer to those enterprises which are not any Public Limited
Companies and which fulfill the following criteria-

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 Service Concern:
 Having an investment of Tk. 50, 00,000 to Tk. 10, 00, 00,000excluding land
& building and / or employing up to 50 workers.
 Business Concern:
 Having an investment of Tk. 50, 00,000 to Tk. 10, 00, 00,000excluding land
& building and / or employing up to 50 workers.
 Manufacturing Concern:
 Ha ving a n invest me nt o f Tk. 1, 50, 00,000 to Tk. 20, 00, 00,000 excluding
land & building and / or employing up to 150 workers.
1.8.8OVERVIEW OF THE SME IN THE ECONOMY OF OUR COUNTRY:
There is a grea t interes t in s ma ll a nd med ium e nterp r is es (SM E) as a
major p la nk o f po ver t y red uc t io n in Ba nglades h. The go ver nme nt has
fo r mulated a co mp re he ns ive industrial policy 2005 by putting special emphasis for
developing SMEs as a thrust sector for balanced and sustainable industrial development
in the country to help deal with the challenges of free Market economy and globalization.
There are some 78,440 private sector establishments of various sizes in Bangladesh
with some 3.5 million workers employed in them. The urban Bangladesh accounts
for some 60% of units and 76% of employment in the private-sector enterprises. Rural
Bangladesh acco unts fo r t he res t. 93% o f a ll units in Ba nglades h be lo ng in
the SME cate go r y, i.e. have between 20 and 99 employees. However, SMEs
account for only 44% of the total employment of the enterprise sector. Private companies
limited by liability account for strictly a very small proportion of the total number of
SMEs in Bangladesh.
1.8.9 CONTRIBUTE OF THE SME IN THE ECONOMY:

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In view of present economic development effort in Bangladesh the SME sector
plays an important role. These are reflected in the following performance /activities of this
sector:
 During the Fourth Five year plan, a total of 0.35 million jobs were created against the
target of 0.4 million.
 Contribution of SME sector to GDP remained above 4.5% during the period from2000-
01 to 2004-2005 despite decline in the amount of advances by the banking
sector to this sector.
 SME sector employs 25% of the total labor force. As a result, this sector is
the present available sector for creation jobs.
 SME sec tor he lp a lle viate po ver t y, inc rease inco me le ve l o f r ura l
people and promote agro-industrial linkage in Bangladesh.
 SME sector requires lower energy supply, lower infrastructure facilities and
this sector imposes less environmental risk.
 They contribute towards better utilization of local resources and skills that
might otherwise remain unutilized.
 They are the only medium for diversification of rural economy and for
peaceful and concurrent socio-economic development of all classes of people
1.9 SCOPE OF THE STUDY
Nobody is beyond mistakes. So I have some limitations in preparing this report.
 The first obstacle is time itself. Due to the time limit, the scope and dimension of the
study has been curtailed. For that reason I could not communicate with all the customers
who have received SME service from AIBL.
 It was very difficult to collect data from such a big organization. Because of some
divisional and confidential problem, I could not get enough information. The AIBL Al-
Arafah Branch is a new Branch. So for better interpretation I could not get sufficient data.

27
 Some respondents are not knowledgeable enough about the method of responding in
survey question. Some respondent response in wrong way though they were informed
enough that how to response the rank order questions. But after all this some respondent
could not give proper response.
 Sometimes I observed that customer are not giving the actual information about their
satisfaction because they think may officials are hearing this and may they will not
providing quick service. I learned that where interest is appearing then actual information
is not disclosed.
1.10 LIMITATION OF THE STUDY
Nobody is beyond mistakes. So I have some limitations in preparing this report.
 The first obstacle is time itself. Due to the time limit, the scope and dimension of the
study has been curtailed. For that reason I could not communicate with all the customers
who have received SME service from AIBL.
 It was very difficult to collect data from such a big organization. Because of some
divisional and confidential problem, I could not get enough information. The AIBL
Motijheel Branch is a new Branch. So for better interpretation I could not get sufficient
data.
 Some respondents are not knowledgeable enough about the method of responding in

28
survey question. Some respondent response in wrong way though they were informed
enough that how to response the rank order questions. But after all this some respondent
could not give proper response.
Chapter-2
2.1 AN OVERVIEW OF AL-ARAFAH ISLAMI BANK LTD
Al-Arafah Islami Bank Limited, a loading Shariah based Islami Bank of Bangladesh was
established as a privet limited company on June,1995 under the companies Act 1994 and
companies Act 1991.The Bank commenced its commercial operation on 27th September, 1995 by
opening its frist branch-Motijheel Branch (AD) at 161 Motijheel C/A, Dhaka.AIBL for finance
investment and was licensed with the objective to practice financing, banking and investment
activities in compliance with the Islamic shariahlow.In order to ensure the modern application of
the banking systems is in the line with shariah systems is in the line with shariah requirements, it
is strongly stressed that the objective behind the establishment of Al-Arafah Islamic Bank Ltd is

29
to achive Falaah (Success in the world and in the hereafter).As and Islami bank, AIBL is totally
free from any kind of interest.Al-Arafah islami Bank Ltd has been modeled in accordance with
philosophy and ethics of the muslims .Its main business is to obtain funds from the public on the
basis of mudaraba and to suppy funds to businessmen on the mudaraba basis also
It is a Shariah compliant bank in terms of its operational pattern, unique customer focus, risk
management, organizational advancement in terms of state of art, IT implementation, expansion
of branch network, diversification of products and services, new business development, building
of an efficient and a dedicated workforce and ensuring the highest level of transparency in all
spheres of operations and performance presentation. The Bank is presently manned by 1080
personnel (Executives-51, Officers-932, Others-97) with 14 Divisions / Departments and 55
branches including 17 AD branches across the country. The AIBL is listed with both Dhaka
Stock Exchange and Chittagong Stock Exchange. The agenda and objectives of this bank are not
grounded for the sake of welfare in hereafter life only but for the socio-economic development in
this world as well. It is committed to conduct all banking and investment activities on the basis
of interest-free profit-loss sharing system. This bank is firmly determined to contribute to the
country economy through its dynamic activities. Above all this bank has extended its helping
hand to lead a happy life with regard to ensuring overall welfare for the people of classes. A
group of established, dedicated and pious personalities are the architects or promoters of this
bank. Especially its founder chairman Mr. A. Z. M. Shamsul Alam was a renowned Islamic
thinker, economist, writer and successful executive of Bangladesh government. The bank is now
in existence for his ardent effort and continued inspiration. The Board of Directors of AIBL
consists of 26 members including the Managing Director and among them, 10 members are from
sponsor shareholders. The Board formed two committees namely Executive Committee and
Audit Committee. The Bank is committed to contribute significantly to the national economy.
The AIBL is pledge– bound to convert the Bank into al-arafah Islami Bank on global standard
which will be dynamic in actions, progressive in ideas, honest in dealings, correct in judgment,
futuristic in attitude, fair in approach, polite in behavior and devoted to high quality service to
customers. Its aim is for boosting modern management, advanced technology, good profitability
and steady growth transparency. It is also firmly committed to disclosure and compliance to

30
shariah and regulatory authorities. Today the bank is an agile organization which promotes
innovation, encourages improvement, values sense of urgency and develops people who accept
challenges and turns them into opportunities.
2.2 OBJECTIVE OF AIBL
2.2.1 VISION:
“To be a pioneer in Islami Banking in Bangladesh and contribute significantly to the growth of
the national economy.”
2.2.2 MISSION:
Twelve missions mentioned in the Annual Report 2013 are:
 Achieving the satisfaction of Almighty Allah both here & hereafter
 Proliferation of Shariah Based Banking Practices
 Quality financial services adopting the latest technology
 Fast and efficient customer service
 Maintaining high standard of business ethics
 Balanced growth
 Steady & competitive return on shareholders’ equity
 Innovative banking at a competitive price
 Attract and retain quality human resources
 Extending competitive compensation packages to the employees
 Firm commitment to the growth of national economy
 Involving more in Micro and SME financing
2.2.3 GOAL:
The word "AIBL" implies the meaning of its "Operation". To achieve the desired goals, it has the
bank emphasizes on the following goals:

31
 Achieving excellence in customer - service next to none and superior to all competitors.
 Be the most caring the intention to pursuit of excellence at all stages with a climate of
continuous improvement. Eventually and customer friendly and service oriented bank.
 Creating a technology based most efficient banking environment.
 Providing high quality financial services in export and import trade.
 Maintaining consistency in improving the service quality and customers' perception
regarding the bank.
 Maintaining a constant growth in sales and profit time to time.
 Making an effective contribution to the overall socio-economic growth of Bangladesh.
2.3 CORPORATE INFORMATION AT A GLANCE:

32
2.4 PRODUCT AND SERVICE:
As a commercial bank with Islamic view AIBL Motijheel Branch perform three activities:
 General Banking Activities
 Investment Banking Activities
 Foreign Exchange Banking Activities.
Date of Registration 18 June 1995
1st
Branch Motijheel
Opening Ceremony 27 September 1995
Authorized Capital 15000
Paid-up capital 8,343.25 million
Localpartnership of capital 100%
Equity 16,091.17
Number of Branch 110
Deposit 140,980.55
Investment 125,715.39
Number of Employees 2,387
Number of shareholders 58,466

33
2.4.1 GENERAL BANKING ACTIVITIES:
General Banking Activities is the most basic set of activities performed by AIBL. All banking
activities are being conducted around the general banking activates. Some of them mentioned
below:
2.4.2 INVESTMENT BANKING ACTIVITIES:
Investment Banking is the activities where clients deposited amounts are employed in various
sectors for earning profits. Lending of funds to the constituents mainly traders, buying and
industrial entrepreneurs, constitutes the main buying of a banking company. The major portion
of bank funds is employed by way of loans and advances, which is the most profitable
employment of its funds. The major part of bank’s income is earned from interest and discount
on this fund.
Some activities of this section mentioned below:
 Lending of Funds according to various modes such as:
 Bai-Muajjal- is a contract between Buyer and Seller under which the seller sells certain
specific goods ( permissible under Shariah and Law of the country ), to the Buyer at an
agreed fixed price payable at a certain fixed future date in lump sum or within a fixed
period by fixed installments.
 Clearing
 Inward
 Outward
 Pay order Issue
 ATM card Issue
 Debit Card
 Credit Card
 Cash Deposit & With Drawl
 Cash Waqf Certificate
 Account Opening
 Mudaraba Saving Deposit (MSD)
 Al-Wadiah Current Deposit (AWCD)
 Mudaraba Notice Deposit (MND)
 Mudaraba Term Deposit Receipt
(MTDR) and
 Different Types of Scheme etc.
 Account Closing
 Cheque Book issue
 Clearing

34
 BaiMujjal Commercial- loan against AWCD account.
 BaiMujjal Trust Received.
 HPSM- Hire Purchase (Participatory Ownership)-[Investment in House Hold ,Real Estate
,Transport
 Bai-Murabaha- is a contract between a Buyer and Seller under which the Seller sells
certain specific goods permissible under Islamic Shariah and Law of the land to the
Buyer at a cost plus agreed profit payable in cash on any fixed future date in lump sum or
by installments.
 SME Finance- micro credit for the small and medium size enterprise.
 Selecting clients carefully before lending.
 Monitoring A/C Transaction.
 Collecting CIB report from Bangladesh Bank.
 All securities related documents collection.
 Appraisal the investment proposal correctly.
 Measuring all risk correctly etc.
2.4.3 FOREIGN EXCHANGE BANKING ACTIVITIES:
Foreign exchange is an important department of Al-Arafah Islami Bank Limited, which deals
with import, export and foreign remittances. Foreign Exchange is an International Department of
the Bank. It facilitates international trade through its various modes of services. It bridges
between importers and exporters. This department mainly deals in foreign currency, that's why it
is called foreign exchange department. This department is playing an important role in enhancing
export earnings, which aids economic growth and in turn it helps for the economic development.
On the other hand, it also helps to meet those goods and service, which are most demandable and
not adequate in our country.
2.5 CORPORATE CULTURE

35
This bank is one of the most disciplined Banks with a distinctive corporate culture. Here we
believe in shared meaning, shared understanding and shared sense making. People can see and
understand events, activities, objects and situation in a distinctive way. They mould their
manners and etiquette, character individually to suit the purpose of the Bank and the needs of the
customers who are of paramount importance to us. The people in the Bank see themselves as a
tight knit team/family that believes in working together for growth. The corporate culture we
belong has not been imposed; it has rather been achieved through our corporate conduct.
2.6 CORPORATE SOCIAL RESPONSIBILITY (CSR):
Al-ArafahIslami Bank Limited is quite conscious of its social responsibility and always trying to
participate in social cause program in the country. The bank is committed to serve the society at
large through its family empowerment Micro Investment, Micro Enterprise and SME programs
under non-formal sector, social capital mobilization through CASH WAQF and other programs
under voluntary sector. The bank has already formed CSR Desk with the aim to serve humanity
through different philanthropic activities giving emphasis on health and Education. The bank
believes that any kinds of social & philanthropic activities would improve the quality of the lives
of the poor masses of the country.
2.7 CORPORATE GOVERNANCE:
The Board of Directors of the Bank consists of winning personalities in respective area of Trade,
Commerce & Industry of the country. Under the proactive guidance, policy and direction of the
Board, Management conducts its business operations. The Corporate Governance systems in
AIBL ensure transparency and accountability at all levels in conducting business.
The Shariah Supervisory Committee is consisting a group of prominent Islamic Scholars,
Economists and Lawyers to advise the Management on Shariah matters relating to the business
operations.

36
2.8 MANAGEMENT OF AIBL:
The strength of a bank depends of the strength of its management team. Al-ArafahBank Ltd is
proud to have a team of highly motivated, well-educated and experienced executives who have
been contributing substantially to the continued progress of the bank. Managerial effectiveness
has been measured in Al-ArafahIslami Bank Ltd in terms of come selected criteria such deposit
mobilization, loans and advances made, loan recovery, profitability and productivity. It has been
found that Al-ArafahIslami Bank Ltd is effective in respect of branch expansion, loan
disbursement, loan recovery etc. With a short span of time, Al-ArafahIslami Bank Ltd has
become one of the leading and most successful bank not only among the second generation
banks but also it superseded many other banks and financial institutions belonging to third and
even first generation banks from the point of view of its excellent business performance,
extraordinary corporate culture and strong team work under the dynamic leadership of its
management. Management is trying to support and assist well-motivated and experienced affairs
to run the day to day affairs of the bank smoothly.
For maintains quality management, it is required to train-up more official at head office and
branch level in respect of sanctioning, disbursement and recovery of credit, project appraisals,
customer services etc

37
2.10. SWOT ANALYSIS OF SOCIAL ISLAMI BANK LTD:
Each and every organization has internal strengths & weaknesses as well as external
opportunities & threats. Now we see the specific SWOT analysis of Analysis of Al-Arafah
Islami Bank Ltd
SWOT Analysis
Strengths
 Exceptional quality and professionalism in its service offering to
clients.
 An experienced and dedicated proactive management team.
 It has a Shariah Supervisory Committee to advise the Management
on Shariah matters relating to business operations.
 The Bank has already introduced KPI system to determine the
efficiency level of human resources. By this way they are now able
to provide on time service delivery.
 A competent equity market research unit.
 State of the art technology utilized in trade execution and back
office and reporting systems.

38
Weaknesses
 Lake of enough Human resources compared to its financial
activities.
 Less branches outside of Dhaka then other competitors.
 Lake of ATM booths compared to other banks.
 Lack of using promotional tools like advertising, lake of
participation in socio-economic development and corporate image.
Opportunities
 Most of the people in Bangladesh are Muslim. As aIslami bank
AIBL can attract more customer rather than its competitors.
 Now people are moving to E-banking where AIBL would be their
first choice while doing E- Banking because of its free online
trading.
 AIBL has contributed a sum of TK. 26.34 million during the year
2013 as for CSR. So it would enhance its Social acceptance among
the customers.
Threats
 High rate of competition in banking.
 Recently Bangladesh Bank approved 9 new banks to enter into the
market among them three bank have already entered into the
market.
 Recently Bangladesh bank is attributing more rules and regulation
in banking which may the reasons of loosing loyal customer and
increasing customer dissatisfaction which is a big threat of AIBL.
.
Table 2.2: SWOT analysis of Al-Arafah Islami Bank Ltd.

39
Chapter-3
3.1 ANALYSIS AND INTERPRETATION OF CUSTOMER
SATISFACTION ON SME BANKING OF AIBL:
The satisfaction level of SME clients of Al-Arafah Islami Bank Ltd would be described in this
chapter. Every factor that affects the customer satisfaction level on SME banking of AIBL would
be described elaborately according to the questionnaire developed and response got from the
respondents. Each and every questionnaire would be described here elaborately.
Total analysis as well as interpretation of customer satisfaction on SME-Banking of Al-Arafah
Islami Bank Limited is given in the next page.

40
STATEMENT: AIBL PROVIDES ON TIME SERVICE DELIVERY TO THE CUSTOMER
ACCORDING ITS PROMISED.
 From the Survey, the following graph has been found:
Figure 4.1: On Time Service Delivery of AIBL.
ANALYSIS:
The graph shows that 44% customers are agree with the fact that they get on-time delivery of
service from SME department of AIBL. Strongly agree response got 33% response whereas
Neutral remains 16%. And Disagree and strongly disagree got consecutively 8% and 2%
response. According to the above table and graphical representation we can take a clear view of
the respondents level of agreement toward the on-time delivery of services as promised by
AIBL. In this graph, horizontal axis refers to the level of agree and disagree which shows how
much customers emphasize on on-time delivery of services and vertical axis refers to the
percentage of the total rating which is given by customers of AIBL. By combining the result of
Strongly Agree and Agree (44%+33%), we can say that the customers of AIBL from SME
banking get on time service delivery as per their requirement.
0%
10%
20%
30%
40%
50%
strongly
agree
agree
neutral
disagree
strongly
disagree
33%
44%
16%
8%
2%

41
STATEMENT: EMPLOYEES OF AIBL ARE ALWAYS WILLING TO HELP THE CUSTOMER:
Figure 4.2: Employees’ Coordination toward the customers.
ANALYSIS:
The findings suggest that, Employees’ coordination is an important factor to the respondents
those were surveyed. In this graph, horizontal axis refers to the level of agree and disagree which
shows how much customers emphasize on Employees’ coordination of services and vertical axis
refers to the percentage of the total rating which is given by customers of AIBL. From the
frequency distribution it is found that almost 20% respondent were strongly agreed and another
54% were agreed with the fact that, Employees’ coordination has impact on customer
satisfaction for SME banking. Along with 18 percent respondents remain indifferent whereas 8%
customers became disagreed. As most of respondents became agreed with the statement, so we
can assume that employees of AIBL are cooperative to the customers.
0%
10%
20%
30%
40%
50%
60%
strongly
agree
agree
neutral
disagree
strongly
disagree
20%
54%
18%
8%
0%

42
STATEMENT: EMPLOYEES OF AIBL KNOWLEDGE TO ANSWER ANY QUESTION OF ITS
CLIENTS:
ANALYSIS:
From the frequency distribution& the Pie chart, it is found that almost 28% respondents were
strongly agreed and another 48% were agreed with the fact that, Employees’ knowledge has
impact on customer satisfaction for SME banking. Along with 20 percent respondents remain
indifferent whereas 4% customers became disagreed. Here the main drawback is that there is no
respondent who became strongly disagreed with the above statement. The findings suggest that,
Employees’ knowledge is an important factor to the respondents those were surveyed. Here the
survey result suggests that AIBL has knowledge and qualified employees in the SME and Agro
department.
28%
48%
20%
4%
Fig 4.3: Employee's knowledgeof SME dept.
Strongly agree
Agree
Neutral
Disagree

43
STATEMENT: DO YOU FEEL SAFE FOR YOU SME BANKING TRANSACTION IN AIBL:
ANALYSIS:
According to the above graphical representation we can take a clear view of the respondent’s
level of agreement toward the safe SME banking of AIBL. The pie chart indicates that 40%
clients get safe SME banking service from AIBL .Along with 16% respondents became strongly
agreed with the statement of safe SME banking of AIBL. Another important issue that the
Piecharts shows that about 32% customers became Neutral about the statement. And disagree got
12 percent responses but strongly agree got no response. So we can say that to make SME
transaction, customers consider the safeness of transaction of a bank. And AIBL is now
considering this factor to provide better customer service.
16%
40%
32%
12%
0%
Fig 4.4: Safe SME banking in AIBL
Strongly agree
Agree
Neutral
Disagree
Strongly disagree

44
STATEMENT: AIBL HELPS YOU SO MUCH FOR MINIMIZING YOUR RISK IN YOUR SME
BANKING:
ANALYSIS:
According to the graphical representation we can take a clear view of the respondents’ level of
agreement whether they are benefited or not from the SME loan of AIBL.The graph shows that
51% customers are agree that they got benefit from SME loan of AIBL. Strongly agree response
got 18% response whereas Neutral remains 14%. And disagree and strongly disagree got
consecutively 10% and 6% response. In this graph, horizontal axis refers to the level of agree and
disagree which shows how much become benefited from the loan and vertical axis refers to the
percentage of the total rating which is given by customers of AIBL. By considering the figure,
we can say that the customers of AIBL became benefited after taking loan and services.
0%
10%
20%
30%
40%
50%
60%
strongly
agree
agree
neutral
disagree
strongly
disagree
18%
51%
14%
10%
6%
Fig 4.5: AIBL helpsto minimize the businessrisk.

45
AIBL PROVIDES QUICK SERVICE WHEN YOU NEED SME LOANE:
ANALYSIS:
The findings suggest that, Quick service is an important factor to the respondents those were
surveyed. From the frequency distribution & the pie chart, it is found that almost 50% were
agreed as well as about 18% were strongly agreed with the fact that, quick service has impact on
customer satisfaction for SME banking. Along with 18 percent respondents remain indifferent
whereas 12% customers became disagreed. Finally the lowest percentage (2%) against the
statement got strongly disagree. Therefore we can say that most of customers get quick service
from AIBL when they demand SME loan because almost half of the respondents became agreed
against the statement.
18%
50%
18%
12%
2%
Fig 4.6: Quick service of AIBL in case of SME banking.
Strongly agree
Agree
Neutral
Disagree
Strongly disagree

46
STATEMENT: AIBL PROVIDES FLEXIBLE RULES AND REGULATION FOR SME LOAN
ANALYSIS:
According to the graphical representation we can take a clear view of the respondents’ level of
agreement toward the rules & regulations on SME banking of AIBL. The chart indicates that
48% clients consider this statement. Both strongly agree and Disagree got the equal percentage
of 16%. Along with 12% respondents remain indifferent against this statement. But 8% clients
were strongly disagreed about the rules and regulations of SME Banking. In this graph,
horizontal axis refers to the level of agree and disagree which shows how much customers
emphasize on the rules & regulations of SME banking and vertical axis refers to the percentage
of the total rating which is given by customers of AIBL.Though some customers are not satisfied
with this statement, we can say that most of respondents are satisfied with the rules and
regulations on SME banking of AIBL
0%
10%
20%
30%
40%
50%
strongly
agree
agree
neutral
disagree
strongly
disagree
16%
48%
12% 16%
8%
Table 4.7: Flexible rules& regulationson SMEbanking.

47
EMPLOYEES OF AIBLWILL BE SYMPATHETIC AND EAGER TO HELP WHEN
CUSTOMERS FACE PROBLEM
ANALYSIS:
The findings suggest that, Sympathetic & eagerness of employees to help customers is an
important factor to the respondents those were surveyed. From the frequency distribution & the
pie chart, it is found that almost 48% were agreed as well as about 18% were strongly agreed
with the fact that, Sympathetic & eagerness has impact on customer satisfaction for SME
banking. Most important draw back in this chart is that about 24% respondents were indifferent
against this statement. Along with strongly disagree did not get any response whereas 10%
respondents became disagreed about employees’ sympathetic & eagerness to help. Here the
figure shows that almost half of respondents became agreed with the given statement. Therefore
we can say that most of customers get help when they face problem regarding the SME banking.
18%
48%
24%
10%
Fig 4.8 : Sympathetic & eagerness of employees .
Strongly agree
Agree
Neutral
Disagree

48
STATEMENT: HOW MUCH SATISFACTION ARE YOU WITH INTEREST RATE OF
RETURN OF SME LOAN?
ANALYSIS:
According to graphical representation we can take a clear view of the respondent’s level of
agreement toward the interest rate on SME banking of AIBL. Chart indicates that about 26%
clients are satisfied whereas 16% respondents are strongly satisfied with the statement. Along
with neutral respondents are similar to the strongly satisfied respondents. But the highest value
(30%) respondents are not satisfied with the current interest rate of SME loan of AIBL. Similarly
12% customers are also strongly dissatisfied with the rate of return. In this graph, horizontal axis
refers to the level of satisfaction and dissatisfaction which shows how much customers
emphasize on the interest rate of SME banking and vertical axis refers to the percentage of the
total rating which is given by customers of AIBL. So we can assume that AIBL is charging more
0%
10%
20%
30%
16%
26%
16%
30%
12%
Fig 4.9: level of satisfaction toward interest rate of SME loan

49
interest on the SME loan compared to other banks in Bangladesh.
STATEMENT: HOW SATISFIED ARE YOU WITH LOAN SANCTION PROCEDURE ON
SME OF AIBL:
 From the Survey, the following graph has been found
ANALYSIS:
The findings suggest that, Loan sanctions procedure on SME is an important factor to the
respondents those were surveyed. From the frequency distribution & the pie chart, it is found that
almost 30% were satisfied as well as about 12% were strongly satisfied with the statement. Most
important draw back in this chart is that the second highest value (24%) is dissatisfied against
this statement. Both Natural and strongly dissatisfied got consecutively 16% and 18% response.
Therefore we can say that about 50 percent customers are satisfied with the loan procedure
system and rests of them are not satisfied. As the chart shows that most of the respondents are
dissatisfied, so we can assume that the loan sanction procedure in case of SME loan of AIBL are
not favorable to the customers.
12%
30%
16%
24%
18%
Fig 4.10 : Loan sanction procedure on SME
very satisfied
satisfied
natural
dissatisfied
very dissatisfied

50
STATEMENT: IF YOU FAIL TO PAY INTEREST HOW SATISFIED ARE YOU WITH THE
ACTION OF THE BANK?
ANALYSIS:
From the graphical representation we get the opinion of respondents toward action of the bank in
case of failure for paying rate of return. Chart indicates that about 68% clients were satisfied
with current action of the AIBL when they fail to pay interest whereas 6% respondents were
strongly satisfied with it. Along with 24% respondent became indifferent. Here the most colorful
finding is that only 2% respondents are dissatisfied whereas there is no respondent who strongly
dissatisfied the statement. In this graph, horizontal axis refers to the level of agree and disagree
which shows how much customers emphasize on the action of the bank for SME banking and
vertical axis refers to the percentage of the total rating which is given by customers of AIBL. So
we can say that AIBL is providing much flexible action on SME banking in terms of failure for
0%
20%
40%
60%
80%
6%
68%
24%
2% 0%
Fig 4.11: Action of the bank incase of failure for paying rate of

51
paying the rate of return compared to other banks in Bangladesh.
STATEMENTS: HOW MUCH ARE YOU BENEFITED BY GETTING SME LOAN FROM
AIBL?
ANALYSIS:
From graphical representation we get the opinion of respondents toward their benefit on SME
loan. Chart shows that the satisfied clients got almost half of the total responses which are 52%
whereas 24% respondents were strongly satisfied with the statement. Natural respondent got
20%. On the other hand only 4% respondents became dissatisfied. Here the most important fact
is that there is no respondent who strongly dissatisfied the statement. So we can say most of
customers become satisfied by taking loan from the bank. as well as the SME clients of AIBL are
24%
52%
20%
4%
Fig 4.12: Satisfaction level toward SME loan
very satisfied
satisfied
natural
dissatisfied

52
benefited by taking the SME loan.
STATEMENT: HOW MUCH SATISFACTION ARE YOU WITH THE SERVICE RECOVERY
APPROACH OF AIBL
ANALYSIS:
From the graphical representation we get the opinion of respondents toward service recovery of
AIBL. Chart shows that the satisfied clients got the pick position which is 44 percent whereas
20% respondents were strongly satisfied with the statement. Along with 26% respondent became
indifferent. On the other hand 10% respondents became dissatisfied. Here the most colorful
finding is that there is no respondent who strongly dissatisfied the statement. In this graph,
horizontal axis refers to the level of satisfaction and dissatisfaction which shows how much
0%
10%
20%
30%
40%
50%
20%
44%
26%
10%
0%
Fig 4.13: Service recovery approach of AIBL

53
customers emphasize on service recovery of the bank for SME banking and vertical axis refers to
the percentage of the total rating which is given by customers of AIBL. So we can say that
AIBL is giving much emphasize on the service recovery SME banking.
STATEMENT: PREFERENCE OF SERVICE QUALITY, SERVICE RECOVERY, QUICK
SERVICE DELIVERY, EMPLOYEE COORDINATION AND INTEREST RATE ACCORDING
TO RANK ORDER
Fig 4.14: Preference of Service Quality, Service Recovery, Quick Service Delivery, Employee
knowledge, Employee Coordination and interest rate.
ANALYSIS:
From the graphical representation we get a clear view of the customer’s preference to the factors
0%
10%
20%
30%
40%
50%
60%
70%
2nd position
1st position

54
that attract them to receive services from SME banking. This graph represents the factors that
attract customers to receive services from SME banking in the rank order according to the
questionnaire. That means which factors will get the highest average 1st positions according to
customer’s choice that factors are the most attractive feature of AIBL consecutively. In this
graph, horizontal axis represents six factors that attract customers to receive services from SME
dept. and vertical axis represents the average 1st position and 2ne position of these factors given
by the customers of AIBL.
Here we can see that preference of service quality and preference of quick service delivery got
equally 34% average 1st position. Then preference of employee coordination got 12% average 1st
position and preference of Employee knowledge got 10% average 1st position. Finally Preference
of Service Recovery &Preference of interest rate got consequently 2% and 6% on1st position.
Along with in 2nd position, Preference of Service Quality got 28% and preference of quick
service delivery got the 18%. So it can be said that the service quality and quick service delivery
are the most attractive service features of AIBL in case of SME banking.

55
3.2 MAJOR FINDINGS
 AIBL offers customize products & services according to the individual customers such as
MND & AWCN for businessman, ShorbornoLota&ShorbornoRekha for only women and
Young Star for student only, ShukerThikhana for garments women and so on.
 People are getting more interest on E-banking which minimizes the risk of carrying cash.
To attract these types of customers AIBL is the only one bank which offers free online
services in all over the country.
 On time Service delivered by the bank is an important factor to the respondents those
were surveyed. From the frequency distribution it is found that almost 74% respondent
were more or less agreed with the fact that on time service offered by the bank has impact
on Customer satisfaction. From our survey we have found that AIBL is hardly trying to
provide on time service according to its promise to customers.
 Helpfulness of the staff is an important factor to the respondents those were surveyed.
From the frequency distribution it is found that almost maximum respondents were more
or less agreed with the fact that helpfulness and coordination of the staff has impact on
customer satisfaction. AIBL centrally provides training facilities to the employees of each
and every branch.
 Employees knowledge in SME dept. is an important factor to the respondents those were
surveyed. From the frequency distribution it is found that about 76% respondents were
more or less agreed with the fact that Employees knowledge in SME dept. has impact on
customer satisfaction. In every branch AIBL has investment department that deals with
SME transactions. The employees of this department take special training to solve any
quarry of customers regarding SME loan.
 Customers also consider the safety of SME loan in order to run their business. From the
frequency distribution we found that only half of respondents feel safe in case of SME
transactions. AIBL takes many documents as well as mortgage security in order to issue
SME loan that may sometimes discourage clients to apply for loan.

56
 AIBL provides SME loan under six different categories including Baim- SME
(Revolving), HPSM- SME (Com.), HPSM- SME (Transport.), Baim- ME (Micro-
Enterprise), Baim- SME (Installment), Murabaha- SME. From our survey we have found
that most of respondents agreed that they became benefited by taking SME loan from
AIBL.
 Quick service for SME banking is another indicator to measure customer satisfaction.
From the frequency distribution it is found that about 68% respondents were more or less
agreed with the fact that they consider quick service to make SME transactions. As most
of respondents are satisfied with service of SME department in AIBL, so we can say this
bank is offering quick service while making SME transactions.
 AIBL follows the rules and regulations of Bangladesh Bank to issue any SME loan.
Along with the branch hardly follows the rules set by the corporate body. First they
consider the owner of the business and performance of the business. Then they evaluate
the ability to return the loan and mortgage security and so on. Finally we can say AIBL
does not provide much flexible rules and regulations to offer SME loan in preference of
clients.
 SME clients also evaluate interest rate to get a SME loan from a bank. From the
frequency distribution it is found that about 42% respondents are dissatisfied with the rate
of return. AIBL charges about 18% or 19% interest rate on SME loan which is higher
compared to other bank. Here Al-ArafahIslami Bank Ltd has lacking to charge higher
interest rate.
 Loan sanction procedure also affects the customer satisfaction level of a bank. From our
survey about 50% respondents were dissatisfied with loan sanction procedure on SME of
AIBL. AIBL takes almost 3 months (1 month in the branch & 2 months in head office)
to issue a loan to the SME clients. So AIBL is failing to pay loan according the demand
of customers.
 If a customer fails to pay the profit from his SME loan according to the schedule time, the
bank give him some time to return. After that if he cannot do, the bank try to help him
before going to legal actions. As a result most of respondents were satisfied about the
action of AIBL in case of failure the rate of return.

57
 The findings suggest that, service recovery is an important factor to the respondents those
were surveyed. Almost 64% respondents were agreed with the fact that service recovery
has impact on customer satisfaction. AIBL is always conscious about the service
recovery of customers.
 According to the frequency distribution we have found that about 76% respondents
became benefited after getting loan from the AIBL. AIBL is paying more concentration
on SME banking to develop the economic situation as well as the whole country.
 AIBL has not sufficient employees in the most of branches especially in the investment
department. I have found that there is only one employee in the investment dept. of
Motijheel branch.
 AIBL does not offer more promotional activities to attract new customer compare to
other bank. Say for example, DBBL, HSBC, IBBL, MTBL etc. are advertising more to
attract new customer.
 At present this bank has only 86 branches in all over the country which is not sufficient to
provide the service in the door of customers. Along with it has limited number of ATM
booths.
 AIBL is paying more attention on Corporate Social Responsibility (CSR) Say for
example recently they took the sponsorship of Cricket series between Bangladesh and
West India’s.

58
Chapter-4
4.1 CONCLUSIONS
During the internship program at Motijheel branch of AIBL almost all the desks are observed by
me especially the investment department and some of SME clients. It is not possible to go the
depth of activities of the branch because of time limitations. Highest effort has been given to get
the customer satisfaction level on SME banking. Now I would like to conclude that AIBL has
successfully created a brand image in the customer mind and is maintaining a strong position in
the market. It is the highest profit gainer bank in 2013 among the private banks. Though still now
it has some weaknesses which can be overcome by reducing the gap between service expected
by customers and service provided by the bank.
AIBL aspire to be the most admired financal institution in the country, recognized as a dynamic,
innovative and client focused company, that offers overall array of products and services geared
for excellence and create an impressive economic value. To establish a developing country like
Bangladesh in the world, the development of Small and Medium business is essential. Now
AIBL is paying more attention on SME/Agora products to develop the economic and socio-
economic condition of our country. I hope AIBL will achieve the top position in private banking
sector especially on SME banking of Bangladesh and will contribute in our economy in future
mostly.

59
4.2 RECOMMENDATION
 After analysis of previous chapter I can assume that at present time SIBL has some good
reputation and perception in the consumer mind. So the bank should pay more emphasize
on operating to enhance this reputation more and more.
 Most of people have a misperception about the Islami banking activities. As AIBL is
operating its banking activities according to the Islamic sharia , first of all they should try
to change this misconception from the customer mind through seminar, publicity etc.
 In case of SME- loan, AIBL charges 18% to 19% profit rate whereas DBBL charges
13%-15% interest rate. So AIBL should reduce the interest rate on SME loan as early as
possible in order to enhance customer satisfaction.
 Al-ArafahIslami Bank Ltd takes more than 3 months in order to sanction a SME loan to
the final client that consumes valuable time of customers. If customers do not get loan on
time, they may lose their business opportunity especially for seasonal business. So AIBL
should reduce time frame of issuing a SME loan in order to provide the loan as per
demand of the customers.
 This bank has a very complicated loan sanction procedure that requires many documents,
mortgage security, and financial statement of business, trade license, and tax certificate
and so on. To encourage new SME clients and to reduce loan sanction time, SIBL may
leverage the complicated loan sanction procedure.
 Currently Motijheel branch of AIBL operates SME banking transaction under investment
department. As Motijheelis place of business area which has much demand for SME
loan. So, here, AIBL can separate SME banking department to provide efficient and on
time service.
 Motijheel branch should diversify its banking services and add new features in its
services so that it can attract customers from all groups of people.
 Recently AIBL has changed its Logo which has a unique meaning. To introduce this new

60
logo and brand of AIBL, the bank should undertake some special promotional activities.
 AIBL provides SME loan only under six categories and maximum amount of loan is 50
lacks. In this case the bank should pay more concentration on the categories as well as to
increase maximum amount of loan to attract large business.
 As the bank has limited branches and ATM booths compared to other banks, it should
open more branches & ATM booths outside the Dhaka city.
 As the bank has no sufficient employees in all branches especially in Motijheelbranch, it
may employ more employees to provide on time services.
 The term “service” is directly related to the customer satisfaction. So the bank should to
deliver the product and service more efficiently AIBL can employ Marketing team in
each and every branch so that the branch like Motijheel branch which have potential to be
more profitable branch of AIBL can use marketing weapons to attract new customers.
 AIBL has some Green Banking projects including Tree plantation, Solar energy saving,
reducing paper work etc. but these projects are not sufficient compared to other banks
like BRAC, HSBC. So the bank should pay more concentration on green banking to
protect our environment & society.
 AIBL has already introduced mobile banking but it is not effectively utilized compared to
other banks like DBBL. In this case the bank merges with telecommunication companies
like Robi, airtel to effectively use mobile banking service.

61
Chapter-5
REFERENCES
 Abhijit, P. (2009), “A Case Study on SME Banking”, pp.7-12
 Fresh Mind Ltd, (2006), “Measuring customer satisfaction: A Review of approaches”;
pp.30.
 Kotler, P. & Armstrong, G. (2009-10), “Principles of Marketing”, Prentice-Hall, India.
12th edition, pp. 13, 20.
 Kanojia, Deepti&Yadav, Dr D.R. (2012), ‘Customer Satisfaction In Commercial Banks’-
A Case Study of Punjab National Bank, Int. J. Trade and Commerce IIARTC, Vol.1,
No.1, pp.90-99
 Malhotra, N.K. & Dash, S. (2011-12), “Marketing Research”, Prentice-Hall, India. 6th
edition, pp.293-300.
 Zeithaml, V.A, Bitner, M.J, Gremler, D.D, Pandit, A. (2011-12), “Service Marketing”,
McGraw Hill, India, 5th edition, pp.116-17,225.
 Motley,L. Biff, (2000), ‘Bank Marketing’: “Customer satisfaction Vs. Customer service”.
[Online, accessed 22 March, 2013] URL: http//www.highbean.com/dec/1G1.
 Judith J. Madill, Lisa Feeney 1 April 2002. , International Journal of Bank Marketing,
Vol. 20 No. 2, pp. 86-98

62
Chapter-6
Appendix 1
Questionnaire
Dear Sir/Madam
I am a student of Jagannat University,Department of Marketing, Dhaka and presently doinga report on Customer
Satisfaction on SME –Banking of Al-Arafah Islami Bank Ltd. I request you to kindly fill up the questionnairebelow
and assureyou that data generated shall bekept confidential.
Personal information:
1. Are you an accountholder in SIBL bank?
Yes No
Please put Tick mark according to your preference with the statements given
following:
Statement Strongly
Agree
Agree Neutral Not
Agree
Strongly
Disagree
2 AIBL provides service delivery at the
time it promises to do so
Name :
Gender : M F
The name of Business :
Address :
Mobilenumber :
Education qualification : Below SSC S.S.C HSC Graduation or above
Occupation :

63
3 Employees of AIBL are always
willing to help the customers.
4 Employees of AIBL in SME dept.
have sufficient knowledge to answer
any questions of its clients.
5 Do you feel safefor your SME banking
transaction in SIBL?
6 AIBL helps you so much for
minimizing your risk in your SME
Business.
7 AIBL provides quick service
whenever you need SME loan.
8 AIBL provides flexible rules and
regulations for SME loan.
9 Employees of AIBL will be
sympathetic and so eager to help
customers when customers face any
problems in their business.
 How much satisfied are you with interest rate of return of SME loan?
a) Very satisfied b) Satisfied c) Natural d) Dissatisfied e) Very dissatisfied
 How satisfied are you with loan sanction procedure on SME of AIBL?
 If you fail to pay interest how satisfied are you with the action of the bank?
 How much are you benefited by getting SMEloan from AIBL?
a) Highly benefited b) benefited c) Natural d) not benefited e) not highly benefited
 How much satisfied are you with the service recovery approach of AIBL?

64
We would like to find out about your preferences regarding the factors of customer
satisfactionwhich attract you most to receive services from AIBL. Please rank the
following factors by placing a “1” which factor you prefer most, a “2” next to your
second preference, and continuing until you have ranked all of the factors.
Factors Rank Order
Service quality
Service recovery
Quick delivery of service
Loyalty program
Employee coordination
Perception of equity or
fairness
Thank you very much for your kind participation in my survey program!!!
Questionnaire Developedby Abdulla all rakib, Bat. 11th, Roll M - 17110204578, Dept. of
Marketing, JNU.
Appendix -2

65
Output of SPSS 16 on the survey of SMEbanking in AIBL
Table 4.1: AIBL provides service delivery at the time it promises
AIBL_ontime_service
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid Strongly Agree 15 30.0 30.0 30.0
Agree 22 44.0 44.0 74.0
Neutral 8 16.0 16.0 90.0
Not Agree 4 8.0 8.0 98.0
Strongly
Disagree
1 2.0 2.0 100.0
Total 50 100.0 100.0
Statistics
AIBL_ontime_service
N Valid 50
Missing 0
Median 2.0000
Std. Deviation .98644
Sleekness .898
Std. Error of Sleekness .337
Minimum 1.00
Maximum 5.00

66
Percentiles 25 1.0000
50 2.0000
75 3.0000
Table 4.2: Employees of AIBL are always willing to help the customers.
AIBL_eml_coordination
Frequency Percent Valid Percent
Cumulative
Percent
Valid Strongly
Agree
10 20.0 20.0 20.0
Agree 27 54.0 54.0 74.0
Neutral 9 18.0 18.0 92.0
Not Agree 4 8.0 8.0 100.0
Total 50 100.0 100.0
Statistics
N Valid 50
Missing 0
Median 2.0000
Sleekness .609

67
Minimum 1.00
Maximum 4.00
Percentile
s
25 2.0000
50 2.0000
75 3.0000
Table 4.3: Employees of AIBL in SME dept. have sufficient knowledge to answer any
questions of its clients.
Emle_knowledge
Cumulative
Percent
Agree 24 48.0 48.0 76.0
Neutral 10 20.0 20.0 96.0
Not Agree 2 4.0 4.0 100.0
Total 50 100.0 100.0
Emle_knowledge
N Valid 50
Missing 0
Median 2.0000

68
Sleekness .483
Minimum 1.00
Maximum 4.00
50 2.0000
75 2.2500
Table 4.4: Do you feel safe for your SME banking transaction in AIIBL?
Safe_SME_Banking
Frequency Percent
Valid
Percent
Cumulative
Percent
Valid Strongly
Agree
8 16.0 16.0 16.0
Agree 20 40.0 40.0 56.0
Neutral 16 32.0 32.0 88.0
Not Agree 6 12.0 12.0 100.0
Total 50 100.0 100.0
Statistics
Safe_SME_Banking

69
N Valid 50
Missing 0
Median 2.0000
Sleekness .138
Minimum 1.00
Maximum 4.00
Percentile
s
25 2.0000
50 2.0000
75 3.0000
Table 4.5: AIBL helps you so much for minimizing your risk in your SMEBusiness.
Minimizing_SME_Risk
Frequency Percent
Valid
Percent
Cumulative
Percent
Agree 25 50.0 51.0 69.4
Neutral 7 14.0 14.3 83.7
Not Agree 5 10.0 10.2 93.9
Strongly
Disagree
3 6.0 6.1 100.0

70
Total 49 98.0 100.0
Missing System 1 2.0
Total 50 100.0
Statistics
Minimizing_SME_Risk
N Valid 49
Missing 1
Median 2.0000
Std. Deviation 1.09070
Sleekness .963
Minimum 1.00
Maximum 5.00
50 2.0000
75 3.0000
Table 4.6: AIBL provides quick service whenever you need SME loan.
Quick Service
Cumulative
Percent

71
Agree 25 50.0 50.0 68.0
Neutral 9 18.0 18.0 86.0
Not Agree 6 12.0 12.0 98.0
Strongly Disagree 1 2.0 2.0 100.0
Total 50 100.0 100.0
Statistics
Quick Service
N Valid 50
Missing 0
Median 2.0000
Sleekness .731
Minimum 1.00
Maximum 5.00
50 2.0000
75 3.0000

72
Table 4.7: AIBL provides flexible rules and regulations for SMEloan.
Flexible Rules
Cumulative
Percent
Agree 24 48.0 48.0 64.0
Neutral 6 12.0 12.0 76.0
Not Agree 8 16.0 16.0 92.0
Strongly Disagree 4 8.0 8.0 100.0
Total 50 100.0 100.0
Statistics
Flexible Rules
N Valid 50
Missing 0
Median 2.0000
Sleekness .722
Minimum 1.00
Maximum 5.00

73
50 2.0000
75 3.2500
Table 4.8: Employees of AIBL will be sympathetic and so eager to help customers when
customers face any problems in their business.
Sympathy_to_Customer
Cumulative
Percent
Agree 24 48.0 48.0 66.0
Neutral 12 24.0 24.0 90.0
Not Agree 5 10.0 10.0 100.0
Total 50 100.0 100.0
Statistics
Sympathy_to_Customer
N Valid 50
Missing 0
Median 2.0000
Sleekness .404
Minimum 1.00

74
Maximum 4.00
50 2.0000
75 3.0000
Table 4.9: How much satisfied are you with interest rate of return of SME loan?
Interest_Rate
Cumulative
Percent
Valid Very Satisfied 8 16.0 16.0 16.0
Satisfied 13 26.0 26.0 42.0
Neutral 8 16.0 16.0 58.0
Dissatisfied 15 30.0 30.0 88.0
Very Dissatisfied 6 12.0 12.0 100.0
Total 50 100.0 100.0
Statistics
InterestRate
N Valid 50
Missing 0
Median 3.0000
Sleekness -.037

75
Minimum 1.00
Maximum 5.00
Percentile
s
25 2.0000
50 3.0000
75 4.0000
Table 4.10: How satisfied are you with loan sanction procedure on SME of AIBL?
Loan_Sanction_pro
Cumulative
Percent
Satisfied 15 30.0 30.0 42.0
Neutral 8 16.0 16.0 58.0
Very Dissatisfied 9 18.0 18.0 100.0
Total 50 100.0 100.0
Statistics
Loan_Sanction_pro
N Valid 50
Missing 0
Median 3.0000

76
Sleekness .048
Minimum 1.00
Maximum 5.00
50 3.0000
75 4.0000
Table 4.11: If you fail to pay interest how satisfied are you with the action of the bank?
Statistics
Failure payment
N Valid 50
Missing 0
Median 2.0000
Sleekness .597
Minimum 1.00
Maximum 4.00
50 2.0000

77
Statistics
Failure payment
N Valid 50
Missing 0
Median 2.0000
Sleekness .597
Minimum 1.00
Maximum 4.00
50 2.0000
75 3.0000
Failure payment
Cumulative
Percent
Satisfied 34 68.0 68.0 74.0
Neutral 12 24.0 24.0 98.0
Total 50 100.0 100.0

78
Table 4.12: How much are you benefited by getting SME loan from AIBL?
Statistics
Benifit_from_Loan
N Valid 50
Missing 0
Median 2.0000
Sleekness .464
Minimum 1.00
Maximum 4.00
50 2.0000
75 2.2500
Benifit_from_Loan
Cumulative
Percent
Satisfied 26 52.0 52.0 76.0
Neutral 10 20.0 20.0 96.0

79
Total 50 100.0 100.0
Table 4.13: How much satisfied are you with the service recovery approach of AIBL?
Statistics
service_Recovery
N Valid 50
Missing 0
Median 2.0000
Sleekness .328
Minimum 1.00
Maximum 4.00
50 2.0000
75 3.0000
service Recovery
Cumulative
Percent

80
Satisfied 22 44.0 44.0 64.0
Neutral 13 26.0 26.0 90.0
Total 50 100.0 100.0

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