Bank management ... Northern University Bangladesh

1. Dividend policy and SME financing
of
Janata Bank Limited
Presented By-
Rabiul Hasan Himo
-BBA140105363
Mohaiminul Hasan Khan
-BBA140105363
Mahmuda Akter
-BBA140105363

2. Point Out:
• About Janata Bank Limited
• Janata Bank Limited at a glance
• Dividend policy of JBL
 Overview
 Dividend mix
• SME financing of JBL
 Overview
 Overall portfolio
 SME financing amount by JBL
• Problems relating Dividend policy and SME
financing
• Recommendation and Conclusions

3. Vision
To become the effective largest
commercial bank in Bangladesh and to
be a leading bank in
South Asia.

5. Dividend policy in JBL
Overview of Dividend policy of JBL
Dividend policy:
• To retain earnings for capital investment
• To distribute earnings in the form of dividend
among shareholders;
• To retain some earning and to distribute
remaining earnings
to shareholders.

6. Dividend policy in JBL
Main preconditions for payment of dividends
to shareholders
• availability of Bank’s net profits to be
distributed;
• absence of restraints upon payment of
dividends as well as other restraints according
to contracts between the Bank and third parties,
foreign financial institutions
• compliance with the Bank’s capital adequacy
ratios (CAR) in case of dividends payment,

7. Dividend policy in JBL
Main preconditions for payment of dividends to
shareholders
• maintaining (retaining) international credit
ratings of the Bank;
• audit of the Bank’s financial statements for the
respective period;
• resolution of general meeting of the Bank;
• To maintain positive growth and fulfil capital
requirements.

8. Dividend policy in JBL
Main preconditions for payment of dividends
to shareholders
• To develop shareholders’ fund at a satisfactory
level.
• payment of dividends not more than once
during a calendar year;
• prevention of default or prevention of situations
when early response measures may be imposed
by the authorized

9. Dividend policy in JBL
Determination of dividend amounts
• For determining dividend amounts –
 Must be Recommended to the general meeting,
Board of Directors must consider the Bank’s equity
Payment of dividends on common shares shall be
between 15-50% of net profits with the Bank’s audited
consolidated financial statements.
Must use monetary resources from dividend
payments
calculated in accordance with the formula approved by
the Bank’s Prospectus, and the JBL legislation in force.

10. SME Financing in JBL
Financing in SME Sector: From the very inception
of Industrial credit financing
of Janata Bank Limited SME
division has sanctioned term
loan in small and medium
industries sector in 4535
projects of taka 941.36 crore.
Among which TK548.69 crore has been
disbursed against 4310
projects. Outstanding as
31.12.2007 is taka 446.12
crore and recovery of loan is
70%.

11. Dividend policy in JBL
Dividend policy mix:
As, In 2012, There is negative EPS , so no cash dividend
exist here in this year.
Year 2011 2012 2013 2014 2015
Cash Dividend 10 0 10 10 10
0
5
10
2011 2012 2013 2014 2015
10
0
10 10 10
Cash Dividend

12. SME financing in JBL
Enterprises concern Total Asset (at
cost, excluding
land and building)
Total no. of
employees (not
more than)
Small
enterprises
Manufacturing Tk. 50000 to 1.50 crore 50 persons
Service Tk.50000 to 50 lac 25 persons
Medium
enterprises
Manufacturing Tk. 1.5 to 20 crore 150 persons
service tk. 50 lac to 10 crore 50 persons
 Overview of SMEs and SME loan (Small and Medium Entreprise)
 SME Loan by JBL
Small Business is a loan facility designed to finance-
small scale trading, manufacturing and service ventures,
especially to help small and medium entrepreneurs to meet their
short-term cash flow shortages and bridge the fund-flow gaps.

13. SME Financing in JBL
Purposes of SME loan
• Working capital
• Purchase of capital machinery
• Refurnishing office or business promises etc.
Role of SME Loan
Income generation
Employment generation
Business Expansion
Improvement of managerial efficiency
Improvement of Living Standard
Economic self sufficiency

14. SME Financing in JBL
Requirements of getting SME loan
National ID Card
Trade license
TIN
Business Experience
Personal grantor
Business plan
Financial statements
Mortgage
Collateral Security

15. SME Financing in JBL
Windows of SME financing of Janata Bank
Limited
• Janata Bank Limited has been financing Small and
Medium Enterprises with a view to developing a
balanced and dynamic industrial sector having a
strong base of SMEs throughout the country.
• Besides normal financing special tailor-made
programs are undertaken by the Bank.
• Under this program a credit line has been extended
to MIDAS while another program is under way.

16. SME Financing in JBL
Recommendations for dividend policy of JBL:
– Must strict for regulations implementation
– Must cooperate by employees with top levels
– Coordination should exist for better divident policy
Recommendations for SME financing of JBL:
– Provide Consultancy Service
– Reduction Of Interest Rate
– Increase Fund For SME
– Increase Govt. Support

17. SME Financing in JBL
Overall Portfolio of SME of Janata Bank
Year 2012- 49.15%
Year 2013- 47.47%
Year 2014- 50.39%
Year 2015- 53.03%
0
1
2
3
4
5
2012 2013 2014 2015
, 49.15% 47.47%
50.39%
53.03%

18. References
[1] Basic info’s [www] Available from: http://www.janatabank-bd.com/ [Accessed
28/08/2015]
[2] ATM and online service info [www] Available from:
http://jb.com.bd/jb/about_us/atm[Accessed 28/08/2015]
[3] Role of banking in Bangladesh [www] Available from:
http://www.assignmentpoint.com/business/assignment‐on‐role‐of‐banking‐in‐banglades
h.html[Accessed 25/08/2015]
[4] Opening Account at JBL [www] Available from:
http://jb.com.bd/jb/treasury_and_capital/janata_capital_and_investment [Accessed
26/08/2015]
[5] Bangladesh Bank [www] Available from: https://www.bb.org.bd/ [Accessed
28/08/2015]
[6] Definitions and info’s about JBL [www] Available from: Wikipedia and Investopedia

19. SME Financing in JBL
• Areas of SME Financing by JBL:
a) Poverty Alleviation and Job Creation:
 Small farmer and landless labour development project,
 self dependant credit project,
 co-operative credit project,
 multilateral credit programme,
 household/family-based small credit,
 credit for crop godown and marginal and small firm credit programme.
b) Specialised Credit Programme:
 Credit on flower cultivation and marketing,
 credit on nursery for herbal and wooden plants,
 credit facilities for disabled,
 credit on maize cultivation,
 professional loans,
 credit on hybrid cow farming and goat and sheep farming loan.

20. SME Financing in JBL
• Areas of SME Financing by JBL:
c) Entrepreneur Development Credit Programme:
 Women entrepreneur development loan,
 cyber cafe loan,
 doctor's loan and small business development loan.
d) Agro-based Industry Credit Programme:
 Chickens and ducks,
 fishes and milk and plants and hatchery loan,
 semi-intensive shrimp cultivation,
 cattle fattening,
 fodder production industry,
 food processing and setting up specialized cold storage.

21. SME Financing in JBL
• SME financing 2012-2016 (In million BDT)
Year 2012 2013 2014 2015 2016
18323 985 20571 21977 23986
0
5000
10000
15000
20000
25000 , 18323
, 985
, 20571 21977 , 23986
AxisTitle
Axis Title
SME loan (BDT million)

22. SME Financing in JBL
Problems Of SME Loan Disbursement
Delay In Repayment Of Loan
Trustworthiness Of Loan Borrower
Failure To Submit Proper Business Plan
Failure To Submit Financial Statement
Lack Of Entrepreneurial Knowledge
Lack Of Govt. Support
Lack Of Available Fund
High Rate Of Interest Rate

23. Dividend policy and
SME Financing in JBL
Conclusion:
Dividend policy of JBL is now not much strict and
implementable, but by being strict- they can make a
high dividend
SME Loan is playing a positive role for the
development of SME entrepreneurs. This Sectors can
also be Well established by proper management of
SME Loan. New entrepreneur now can encourage to
take risk of starting business to apply their innovative
ideas and to have freedom of life. So, JBL must
increase their SME loan segment muc.h

24. Thank You all
for being with
us