SME BANKING IN BANGLADESH

SME BANKING IN
BANGLADESH
MD. SAZZADUL ISLAM.

SME BANKING IN BANGLADESH:
A STUDY ON JAMUNA BANK LIMITED.

Internship Report On
SME Banking In Bangladesh: A Study on JBL
Submitted To:
Head of HRD
Jamuna Bank Limited
Head Office
Hadi Mansion, 2, Dilkusha C/A, Dhaka-1000
Supervised By:
Mr. A.N.M Badsha Miah
Assistant Professor
Department of Business Administration
Dhaka City College
Submitted By:
Md. Sazzadul Islam
National University Roll No: 1201793
National University Registration No: 00001108100
Major in Accounting
Session: 2011 – 2012
Department of Business Administration
Dhaka City College
Date of Submission: 15th
January 2017

i
LETTER OF TRANSMITTAL
20th
December 2016
Mr. Badruzzaman
Controller of Examinations
National university
Gazipur – 1704
Subject: Submission of the internship report.
Sir,
With due respect, I would like to inform you that, it is a great pleasure for me to submit
the Internship Report on “SME Banking in Bangladesh: A Study on JBL”, as it is a
fulfillment of partial requirement to achieve BBA degree under the curriculum of
National University, Bangladesh.
To prepare this report, I have gathered what I believe to be the most complete
information available on SME Financing of Jamuna Bank Limited and enjoyed working
thereon. The experience I have gathered during this period will remain as an invaluable
asserts of immense useful in my life. I have worked hard in preparing this report and I
hope that it will fulfill my degree requirement. I will be always available for answering
any query on this report.
So, I fervent requesting and hope that you would be kind enough to accept my report and
oblige thereby.
Sincerely Yours,
………………
Md. Sazzadul Islam
NU Roll no: 1201793
NU Registration no: 00001108100
Session: 2011- 2012
Major in Accounting
Dhaka City College

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ACKNOWLEDGEMENT
First of all, I am expressing my heartfelt gratitude to the Almighty, the most merciful and
the benevolent, for his special kindness to give me the opportunity to complete the
internship successfully and prepare internship report timely.
I would like to express my gratitude to the authority of National University and to our
honorable principal, Professor Md. Shahjahan Khan for providing me such an
opportunity. I also give my sincere gratitude to my academic supervisor, Mr. A.N.M.
Badsha Miah, Assistant Professor, Department Of Business Administration, Dhaka City
College for his continuous guidance, individual suggestion, continuous encouragement
and unfailing enthusiasm throughout the process of completion of this report.
I am also thankful to the Head of Human Resources Division of Jamuna Bank Limited
for giving me opportunity to do the internship in Jamuna Bank Limited. I am thankful to
Md. Zakir Hossain, AVP& Manager, and also Md. Mhafuzur Rahman, SEO & Operation
Manager, Jamuna Bank Limited, Rayerbag Branch, Dhaka for their sincere advice,
encouragement and support in my internship program. I also thankful to all of my
collogue at Jamuna Bank Ltd, specially Md. Abu Jafar (Officer), A.N.M Niaz Morshed
(FEO) for helping by giving valuable advice and helping to get acquainted with the
culture of the Bank and encourage me to complete my internship successfully.
At last, but not least, I am very grateful to my entire family members especially to my
mother and father for their respective support and inspiration to accomplish my study.

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STUDENT’S DECLARATION
I hereby declare that the internship report namely “SME Banking in Bangladesh: A
Study on JBL” prepared by me after the completion of three months of internship
program with Jamuna Bank Limited. I also declare that this paper is my original worked
and prepared for academic purpose which is a part of B.B.A program under national
university and the paper may not be used in actual market scenario
……………………..
Md. Sazzadul Islam
National University Roll No: 1201793
National University Registration No: 00001108100
Session: 2011-2012
Major In Accounting
Dept. of Business Administration
Dhaka City College

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CERTIFICATE OF SUPERVISOR
This is to certify that Md. Sazzadul Islam, National University Roll Number: 1201793,
National University Registration Number: 00001108100, Academic session: 2011-12,
Major in Accounting, is a regular student of 8th
semester (Final semester) of BBA
program, Department of Business Administration, Dhaka City College under the National
University of Bangladesh. He has completed a three months internship program at
Jamuna Bank Ltd under my supervision which is a fulfillment of partial requirement of
obtaining BBA Degree.
I wish his success in all his future endeavors.
………………………
A.N.M. Badsha Miah
Assistant Professor
Department Of Business Administration
Dhaka City College

v
EXECUTIVE SUMMARY
As the part of BBA Program, this report is made on SME financing of Jamuna Bank
Limited. To examine the overall SME financing of Jamuna Bank Limited was the prime
motive of this report. I focus on the types of SME, sector of SME allocation of Jamuna
Bank Ltd. Major Information were collected through face to face interview with
respective officer, Manager Operation, Credit in charge and Bank’s annual report. But I
have faced some problems doing the report like lack of data resources and time
constrains.
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act,
1994 of Bangladesh with its Head Office currently at Hadi Mansion, 2, Dilkusha C/A,
Dhaka-1000, and Bangladesh. The Bank started its operation from 3rd June 2001.Jamuna
Bank starts its operation with a view to becoming a leading banking institution and to
play a significant role in the development of the country. JBL always try to focus on
earning and maintain CAMEL rating strong and to maintain a healthy growth of business
with desired image. It’s most important strategy is to increase a direct contact with
customers in order to cultivate a closer relationship between the bank and its customers.
SME plays a very significant role in the socio-economic development of a country. The
range of SME loan is TK. (300000 – 500000). As per Bangladesh Bank act this SME
loan is to be provided without any security. This loan is provided on the basis of
customers business & the bank transaction. To get a loan, customers must have a current
account on the banks respective branch. If a customer want a 500000 Tk. SME loan, the
customer have a current account on the banks respective branch & she/he must have a
monthly transaction of TK. (1000000 – 1500000). The bank will judge the last 6 months
– 12 months transaction of that account. If the customer has an account on other bank, the
bank calls for the bank statement of 6months – 12 months of the customer’s bank account
(current account) transaction. If the bank is satisfied with the required papers the bank
agent visit the business place of the customer & determine the business condition and
market value of the inventory. If the bank satisfied with the visit the customer will get the
loan. Again, if one has an MSS account he/she can get 50% of saved money as a SME

vi
loan & on the case of FDR account customer can get up to 90% of the saved money as
SME loan.
While analyzing the SME loan procedures of the Bank compared to other banks JBL has
not succeeded remarkably. In the year 2013 the SME loan percentage was 2.04% and it
was increased to 5.10% in 2014, but in 2015 the percentage decreases to 4.79%of total
loan amount of JBL due to the increasing completion in SME sector. SME growth track
is increasing in last 5 years. It was TK. 4420.10 million. in 2011 & it was TK. 12540.60
million in 2015. Though there was Ups and down in2015, the disbursement rate of SME
loan is increasing through the year. In the year of 2015 JBL achieve 84% of its annual
target. Rayerbag branch of JBL only achieved 64% of its annual target in the year 2015 &
it achieve 57% (up to November – 2016) of its annual target. The recovery rate of
outstanding loan was 96% in 2013, but it decreased to 94.36% in 2015 as the
consequence of increasing the loan amount & the customers of SME. JBL has the lowest
rate of interest (14%) among DBBL & Brack Bank. In the year 2015 JBL had the highest
rate of recovery among Prime Bank, Dhaka Bank, DBBL, Brack Bank.
SME is considered as a thrust sector in the economic development of the country. JBL is
an important player in the banking sector of Bangladesh. In last 5 years JBL become
stronger and it improves its SME loan TK. 4420.1 million to TK. 12540.60 million in the
year 2015. JBL has the lowest loan amount of TK. 1-50 lac among Brack Bank, DBBL &
JBL, but JBL has the lowest amount of interest among them. JBL especially emphasis on
Women entrepreneurship, Young entrepreneurship for SME loan. Rayerbag branch of
JBL need to perform more promotional activities to attract more promotional activities to
achieve its annual target. SMEs with highest turnover and adaptability play a major in
removing the regional and sector imbalance in the country. SME helps to reduce the
poverty by creating employment for the poor and low income workers. JBL is a strong
and effective player in the financial system. It is a solid forward looking, modern local
bank with a record of sound performance. The Bank has the vision to be the best private
commercial bank in Bangladesh. JBL is a new generation Bank.

vii
TABLE OF CONTENTS
CHAPTER PARTICULARS
Letter of Transmittal i
Acknowledgement ii
Student Declaration iii
Certificate of Supervisor iv
Executive summary v
Acronyms xi
List of Tables xii
List of Figures xiii
ONE
Introduction
1.1 Introduction 1
1.2 Objectives of the Study 1
1.3 Methodology of the Study 2
1.4 Scope of the Study 3
1.5 Limitations of the study 3
TWO
Company Overview
2.1 Company Profile 5
2.2 Objectives of JBL 6
2.3 Strategies of JBL 7
2.4 Vision of JBL 8
2.5 Mission of JBL 8
2.6 Corporate Slogan of JBL 8
2.7 We Have Changed Now 9
2.8 Corporate Culture of JBL 9
2.9 Corporate Profile of JBL 10
2.10 Hierarchy of JBL 11
2.11 Organizational Structure 12
2.12 History of JBL Rayerbagh Branch 13
2.13 Hierarchy of JBL Rayerbag Branch 13
2.14 Management of JBL 14
2.15 Management of JBL Rayerbagh Branch 14
2.16 Products of JBL 14
2.17 Products of JBL Rayerbagh Branch 24
2.18 Principal Activities of JBL 24

viii
2.19 JBL Foundation (5 Years Financial
Highlights)
25
2.20 SWAT Analysis 26
THREE
Description of Small and Medium
Enterprise
3.1 SME Banking and Service in Bangladesh 27
3.2 Reasons of Financing on SME by JBL 27
3.3 Purpose of SME Loan 29
3.4 SME Exposure Limit. 29
3.5 Loan Pricing. 31
3.6 Period of Loan 31
3.7 Mode of Repayment 32
3.8 Security for the Loan Facility 32
3.9 Documents Required for the Loan
Facility
32
3.10 Dedicated SME Branches in JBL 34
3.11 Structure of SME Division 35
3.12 Products of JBL SME Division 36
3.12.1 Jamuna Swabolombi 36
3.12.2 Jamuna Bonik 37
3.12.3 Jamuna Sommriddhi 38
3.12.4 Jamuna Jantrik 40
3.12.5 Jamuna Nari Uddogh 41
3.12.6 Jamuna Chalantika 43
3.12.7 Jamuna Shachchondo 44
3.13 Criteria and Conditions of SME Loan 45
3.14 Processing and Screening of Loan
Proposal
47
3.15 Marketing Process Related to SME
Loan
48
3.15.1 Marketing Process 48
3.15.2 Target Marketing 48
3.15.3 Market Positioning 49
3.15.4 Developing Marketing Mix 50

ix
3.16 Flow Chart of SME Loan Processing 51
FOUR
Analysis and Evaluation of SME
Financing
4.1 Contribution of SME on some Asian
Countries
52
4.2 SME Business Earning Scenario of JBL 53
4.3 Proportion of SME Loan From Year
(2013- 2015)
55
4.3.1 SME Loan in Year 2013 55
4.4 SME Growth Track (Loan Outstanding
last 5 Years)
60
4.5 Graphical Highlight in Disbursement
During Jan 2015 to Dec. 2015
61
4.6 Disbursement of SME Loan 62
4.7.1 Achievement of Annual Target 63
4.7.2 JBL Rayerbagh Branch Sme
Performance
64
4.7.3 Overall Analysis & Interpretation
of SME Loan
65
4.8 Comparative Analysis of SME Loan of
Different Banks in Bangladesh. (Year-2015)
66
4.8.1 Portfolio Size of Different Bank
in SME Sector
67
4.8.2 Loan size 68
4.8.3 Rate of Interest 69
4.8.4 Loan Processing Fee 69
4.8.5 Period of Loan 69
4.8.6 Comparative Analysis of SME
Credit Scheme of Different Bank
70

x
FIVE
Findings , Recommendations and
Conclusion
5.1 Major Findings 72
5.2 Recommendations 74
5.3 Conclusion 75
APPENDED
PART
Bibliography 76
Appendix 77

xi
ACRONYMS
Acronyms Elaborations
JBL Jamuna Bank Limited
BBA Bachelor of Business Administration
SME Small and Medium Enterprise
DSE Dhaka Stock Exchange
CSE Chittagong Stock Exchange
BB Bangladesh Bank
CD Current Deposit
SD Savings Deposit
STD Short Term Deposit
FDR Fixed Deposit
L/C Letter of Credit
ATM Automated Teller Machine
SMS Short Message Service
EMI Equal Monthly Installment
CSR Corporate Social Responsibility
IT Information Technology
HRM Human Resources Management
GDP Gross Domestic Product
Ltd. Limited
CEO Chief Executive Officer
FCD Foreign Currency Deposit
FDR Fixed Deposit Receipt
NRB Non-Resident Bangladeshis
LTR Loan against Trust Receipt
VAT Value Added Tax
CIB Credit Information Bureau
SE Small Enterprise
ME Medium Enterprise
SOD Secured Overdraft
SWIFT Society For Worldwide Interbank Fund Transfer
PG Personal Guarantee

xii
LIST OF TABLES
SL.
No.
Name Of Table Page
No.
1 Brief Profile of JBL 10
2 5 Years Financial Highlights of JBL 25
3 SWAT Analysis of JBL 26
4 Exposure Limit For SME Financing For Banks 30
5 Features of Jamuna Swabolombi 36
6 Features of Jamuna Sommriddhi 39
7 Features of Jamuna Jantrik 40
8 Features of Jamuna Nari Uddogh 42
9 Comperison of SME’s Contribution to GDP 52
10 SME Business Earning Scenerio 53
11 Percentage of SME Loan on 2013 55
14 SME Growth Track 60
15 SME Loan Disbursement in 2015 61
16 Disbursement of SME Loan 62
17 Annual Target 63
18 Rayerbag Branch SME Performance 64
19 Calculation Of Recovery Rate 65
20 Portfolio Size of SME of Different Banks 67
21 Loan Size of Different Banks 68
22 Rate of Interest of Different Banks 69
23 Loan Processing Fee of Different Banks 69
24 Loan Period of Different Banks 69
25 Comparative Analysis of SME Credit of Different Banks 70

xiii
LIST OF FIGURES
Sl.
No.
Name of Figure Page
No.
1 The Hierarchy of The Bank Authority 11
2 Management Hierarchy 12
3 The Hirerarchy of the Bank Authority f Rayerbag Branch 13
4 Structure of SME Division of JBL 35
5 SME Centralization Center of JBL 47
6 Target Market Of JBL SME 49
7 Flowchart Of SME Loan processing 51
8 SME Loan On some Asian Countries 52
9 SME Business earning Scenerio 54
13 SME Growth Track 60
14 Disbursement of SME Loan in 2015 61
15 Disbursement of SME Loan 62
16 Achievement of Annual Target 63
17 Rayerbag Branch SME Performance 64
18 Percentage of Outstanding Loan 65
19 Presentation of Overdue Percentage under SME 66
20 Presentation of Recovery Rate Under SME 66
21 Portfolio Size of Different Bank 68
22 Disbursement Position Of Different Banks 70
23 Recovery Rate of Different Banks 71

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1.1INTRODUCTION:
As a qualification of obtaining Bachelor of Business Administration (BBA) degree, every
student has to go through an internship program. The main reason of this course is to
experience the reality of the corporate life and relate it with the knowledge get from
academic curriculum with practical situation. This course is taken as a three months
program which creates opportunities for every student to work in an organization where
they work different working environment and gather practical knowledge.
1.2 OBJECTIVES IF THE STUDY:
The objectives of the report are divided in two parts. One is general objectives and
another one is specific objectives.
General Objective:
The general objective of the report is to fulfill the partial requirement of BBA program,
Dhaka City College under National University.
Specific Objectives:
Specific objectives of this report are –
To examine bank's overall credit policy towards SME facility.
Find out the marketing policy of SME loan in JBL.
 Find out the barriers against smooth flow of SME loan.
 Analysis of demographic profile of selected SME clients of JBL and their
perception about the service quality of JBL SME Division.
Find out the problems related to SME banking for the SME proprietors and also
for the bankers.
Find out the year wise SME loan disbursement and percentage of SME loan to
total loan of JBL.

2
Find out the performance comparison of JBL in SME sector with other banks in
Bangladesh.
1.3 METHODOLOGY OF THE STUDY:
Methodology is the most important component in any study proposal since it explains the
procedures and methods through which a particular study will be carried out. This
includes discussion on data requirements, sample selection, data analysis, limitations etc.
1.3.1 DATA SOURCES
Primary Source:
Practical work exposure in Jamuna Bank Ltd
 Face to Face conversation and questionnaire survey on the SME Proprietors
Secondary Source:
Annual Report of Jamuna Bank Ltd.
SME Manual of Jamuna Bank Ltd.
 Bank records
Official website of the Bank

3
1.3.2 DATA REQUIREMENTS & ANALYSIS METHOD:
Using M/S Word & Excel, data analysis has been done.
Using Sampling Procedures & Sample size, data analysis has been done.
1.4 SCOPE OF THE STUDY:
The report covers an overview of Jamuna Bank Limited, its SME financing, types of
SME and sector of SME allocation of Jamuna Bank Ltd, identification of problems
regarding SME loan, effectiveness of SME business of Jamuna Bank Ltd. The scope of
the study is limited to JAMUNA BANK LTD, Rayerbagh Branch only. There was no
intention whatsoever, to focus on how the SME loan was marketed to the customers, how
the relationships were built and how each customers were followed up or handled by the
Relationship Managers. Purpose of the report would be to focus on how the loan
procedure and practice are being carried out by the SME department like what is
application process, what is the evaluation techniques followed by the officers during
evaluating a loan proposal and so on so forth. Comparative analysis has been done
between Prime Bank, Dhaka Bank, Dutch Bangla Bank, Brac Bank and Jamuna Bank
Ltd. Also the report won’t cover various legal issues regarding disbursement and
recovery procedures of a loan. And finally entire risk issues in the report will revolve
around SME loan proposals only.
1.5 LIMITATIONS IF THE STUDY:
The study considers the following limitations:
To identify the SME risk management procedure, much longer time and vast
publicity is needed.
It is not possible to collect whole data within a short time for survey.
The work is done on a sample of small respondents.

4
Time limitation is also one of the main reasons so for that more detailed study
was not possible.
Sufficient record, publications were not available as per my requirement.
Every organization has their own secrecy that is not revealed to others. While
collecting data they did not disclose such information that hampers the
organizational confidentiality.

5
2.1 COMPANY PROFILE:
Being a 3rd generation Bank of Bangladesh, it focuses on
Remaining with time
Managing change
Developing human capital
Creating true customer’s value
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act,
1994 of Bangladesh with its Head Office currently at Hadi Mansion, 2, Dilkusha C/A,
Dhaka-1000, and Bangladesh. The Bank started its operation from 3rd June 2001.
The Bank provides all types of support to trade, commerce, industry and overall business
of the country. JBL's finances are also available for the entrepreneurs to set up promising
new ventures and BMRE of existing industrial units. Jamuna Bank Ltd., the only Bengali
named 3rd generation private commercial bank, was established by a group of local
entrepreneurs who are well reputed in the field of trade, commerce, industry and business
of the country.
The Bank offers both conventional and Islamic banking through designated branches.
The Bank is being managed and operated by a group of highly educated and professional
team with diversified experience in finance and banking. The Management of the bank
constantly focuses on understanding and anticipating customers' needs. Since the need of
customers is changing day by day with the changes of time, the bank endeavors its best to
device strategies and introduce new products to cope with the change. Jamuna Bank Ltd.
has already achieved tremendous progress within its past 10 years of operation. The bank
has already built up reputation as one of quality service providers of the country.
At present the Bank has real-time Online banking branches (of both Urban and Rural
areas) network throughout the country having smart IT-backbone. Besides traditional

6
delivery points, the bank has ATMs of its own, sharing with other partner banks and
consortium throughout the country.
The operation hour of the Bank is 10:00 A.M. To 6:00 P.M. from Sunday to Thursday
with transaction hour from 10:00 A.M. to 4:00 P.M. The Bank remains closed on Friday,
Saturday and government holidays.
2.2 OBJECTVES OF JBL:
To earn and maintain CAMEL Rating 'Strong'.
To establish relationship banking and improve service quality through
development of Strategic Marketing Plans.
To remain one of the best banks in Bangladesh in terms of profitability and assets
quality.
To introduce fully automated systems through integration of information
technology.
To ensure an adequate rate of return on investment.
To keep risk position at an acceptable range (including any off balance sheet risk).
To maintain adequate liquidity to meet maturing obligations and commitments.
To maintain a healthy growth of business with desired image.
To maintain adequate control systems and transparency in procedures.
To develop and retain a quality work-force through an effective human resource
management system.
To ensure optimum utilization of all available resources.

7
To pursue an effective system of management by ensuring compliance to ethical
norms, transparency and accountability at all levels.
2.3 STRATEGIES OF JBL:
To raise capital up to TK.4000.00 million by 2015.
To manage and operate the bank in the most efficient manner to enhance financial
performance and to control cost of fund.
To strive for customer satisfaction through quality control and delivery of timely
services.
To identify customers’ credit and other banking needs and monitor their
perceptions towards our performance in meeting those requirements.
To review and update policies, procedures and practices to enhance the ability to
expand better service to customers.
To train and develop all employees and provide them adequate resources so that
customers’ needs can be responsibly addressed.
To promote organizational effectiveness by openly communicating company
plans, policies, practices and procedures to all employees in a timely fashion.
To cultivate a working environment that fosters positive motivation for improved
performance.
To increase direct contact with customers in order to cultivate a closer relation
between the bank and its customers.
To diversify portfolio both in the retail and wholesale market.

8
2.4 VISION OF JBL:
To become a leading banking institution and to play a pivotal role in the development of
the country and service so that sustainable growths, reasonable return and contribution to
the development of the country can be ensured with motivated and professional work-
force. Jamuna Bank’s aim is to satisfy customers with high quality service that reflects
the global image as the premier international bank, to become a leading banking
institution and to play a pivotal role in the development of the country.
2.5 MISSION OF JBL:
The Bank is committed to satisfying diverse needs of its customers through an array of
products at a competitive price by using appropriate technology and providing timely
service so that a sustainable growth, reasonable return and contribution to the
development of the country can be ensured with a motivated and professional work-force.
2.6. CORPORATE SLOGAN OF JBL:
“Your Partner For Growth”

9
2.7 WE HAVE CHANGED NOW:
2.8 CORPORATE CULTURE OF JBL:
Employees of JBL share certain common values, which help to create a JBL culture:
The client comes first.
Search for professional excellence.
Openness to new ideas and new methods to encourage creativity.
Quick decision-making.
Flexibility and prompt response.
A sense of professional ethics.

10
2.9 CORPORATE PROFILE:
Brief Profile of Jamuna Bank Limited:
Name of the Company Jamuna Bank Limited
Legal Form Jamuna Bank Limited (JBL) is a Banking
Company registered under the Companies
Act, 1994 with its Head Office at Hadi
Mansion, 2, Dilkusha C/A, Dhaka- 1000,
and Bangladesh.
Date of Commencement 2nd April 2001
Registered Office Hadi Mansion,2,Dilkusha C/A, Dhaka-
1000, Bangladesh
Telephone 9555141,Ext.130
Tele-fax Fax: 880-2-9565762
SWIFT Code JAMUBDDH
E-mail jamunabk@bdcom.com
Web Page www.jamunabankltd.com
Auditors Shofik Basak & Co.
Chartered Accountants
Tax Consultant AND Associates
Managing Director Mr. Motior Rahman
Company Secretary M.A Rouf. SAVP
Number of Branches 108
(Source- http://www.jamunabankbd.com/ )
Table-1: Brief Profile of Jamuna Bank Limited

11
2.10 HIERARCHY OF JBL:
Source- http://www.jamunabankbd.com/
Figure-1: The Hierarchy of the Bank Authority
Chairman
Managing Director (MD)
Deputy Managing Director (DMD)
Senior Executive Vice President (SEVP)
Executive Vice President (EVP)
Senior Vice President (SVP)
Vice President (VP)
Senior Assistant Vice President (SAVP)
Assistant Vice President (AVP)
First Assistant Vice President (FAVP)
Senior Executive Officer (SEO)
Executive Officer (EO)
First Executive Officer (FEO)
Probationary Officer (PO)
Officer (General/Technical/Cash)
First Officer (General/Technical/Cash)
Junior Officer (General/Technical/Cash)

12
2.11 ORGANIZATION STRUCTURE:
(Source- Annual report 2014 page- 17)
Figure -2: Management hierarchy
Chairman
Managing Director (MD)
Deputy Managing Director
(DMD)
Senior Executive Vice PresidentSenior Executive Vice PresidentSenior Executive Vice President
Executive Vice PresidentExecutive Vice President
SVP (Board
Secretary)
SVPSVPSVP (Credit)SVP (HRD)
SAVP
VP
FAVP
AVP
Jr. Assistant
VP
Senior Executive
Officer
Executive Officer
First Executive
Officer
Officer

13
2.12 HISTORY OF JBL RAYERBAGH BRANCH:
Rayerbagh branch of Jamuna Bank Limited started its operation on 29th
December 2009.
New Location at Holding No. 1296, Jnantabag, Rayerbag, Donia Union, Shampur,
Dhaka. Phone: 02-7552012,02-7552014 ,02-7552017. The name of the branch is
Rayerbagh Branch. Basic Information of Rayerbag Branch is given bellow:
Basic Information:
Grade : D
No. of employees : 12
Age of branch : 6 years 11 months
2.13 HIERARCHY OF JBL RAYERBAG BRANCH:
Hierarchy of the JBL, Rayerbag Branch is following
(Source: Personal communication with Branch Authority)
Figure-3: The Hierarchy of the Bank Authority of Rayerbagh Branch
AVP & Branch Manager
First Executive Officer
SEO & Operation Manager
First Officer
Executive Officer

14
2.14 MANAGEMENT OF JBL:
The bank is being managed and operated by a group of highly educated and professional
team with diversified experience in finance and banking. The management of the bank
consistently focuses on understanding and anticipating customer needs. The scenario of
banking business is changing day by day, so the bank responsibility is to device strategy
and new products to cope with the changing environment.
2.15 MANAGEMENT OF JBL RAYERBAGH BRANCH:
Jamuna Bank Ltd has already achieved tremendous progress within only one year. The
bank has already ranked as one of the quality service providers & is known for its
reputation. In Rayerbagh Branch many VIP customers and business people come to open
various account to make transactions according to their needs. Effective management
system of Rayerbagh Branch helped to achieve huge customers’ response.
2.16 PRODUCTS OF JBL:
The products and services can be classifying in two ways & those arc.
A. The deposit products & services
B. The lending products & services
2.16.1 DEPOSIT PRODUCTS & SERVICE:
Corporate Banking
Personal Banking
Online Banking
Personal loan for woman
Monthly Savings Scheme
Monthly Benefit Scheme
Double/Triple Benefit Scheme
Marriage Scheme

15
Education Scheme
Lakhpati Deposit Scheme
Kotipati Deposit Scheme
Q-Cash ATM
2.16.2 Lending/Investment products & services
Hi-her Purchase
Lease Finance
Project Finance
Loan Syndication
Consumer Credit
Import and Export. Handling Financing
Corporate Banking:
The motto of JBL's Corporate Banking services is to provide personalized solutions to
their customers. The Bank distinguishes and identifies corporate customers' need and
designs tailored solutions accordingly.
Jamuna Bank Ltd. Driers a complete range of advisory, financing and operational
combining trade, treasury, investment and services to its corporate client group’s coin
iransactional banking activities in one package. Whether it is project finance, term loan,
import or export deal, a working capital requirement or a forward cover for a foreign
currency transition, there Corporate Banking Managers will offer you the accurate
solution, their corporate Banking specialists will render high class service for speedy
approvals and efficient processing to satisfy customer needs.
Corporate Banking business envelops a broad range of businesses and industries.
Everyone can leverage on our know-how in the following sectors mainly:

16
Agro processing industry
Industry (Import Substitute / Export oriented)
Textile Spinning, Dyeing / Printing
Export Oriented Garments, Sweater.
Food & Allied Paper & Paper Products
Engineering, Steel Mills
Chemical and chemical products etc.
Telecommunications.
Information Technology
Real Estate &Construction
Wholesale trade
Transport
Hotels, Restaurants
Non-Bank Financial Institutions
Loan Syndication
Protect Finance
Investment Banking
Lease Finance
Hire Purchase
International Banking
Export Finance.
Import Finance

17
Personal Banking:
Personal Banking of Jamuna Bank offers wide-ranging products and services matching
the requirement of every customer. Transactional accounts, savings schemes or loan
facilities from Jamuna Bank Ltd. make available to all a unique mixture of easy and
consummate service quality.
They make every endeavor to ensure their clients' satisfaction. Their cooperative &
friendly professionals working in the branches will make your visit and enjoyable
experience.
Online Banking:
Jamuna Bank Limited has introduced real-time any branch banking on April 05, 2005.
Now, customers can withdraw and deposit money from any of its 30 branches located at
Dhaka, Chittagong, Sylhet, Gazipur, Bogra, Naogaon, Narayanganj and Munshigonj.
Their valued customers can also enjoy 24 hours banking service through ATM card from
any of Q-cash ATMs located at Dhaka, Chittagong, Khulna, Sylhet and Bogra. All the
existing customers of Jamuna Bank Limited will enjoy this service by default.
Monthly Savings Scheme (MSS):
Savings is the best friend in bad days. Small savings can build up a prosperous future.
Savings can meet up any emergences. JBL has introduced Monthly Savings Scheme
(MSS) that allows saving on a monthly basis and getting a handsome return upon
maturity. If anyone wants to build up a significant savings to carry out you're cherished
Dream, JBL MSS is the right solution.
Monthly Benefit Scheme (MBS):
Jamuna Bank Limited has introduced Monthly Benefit Scheme (MBS) for the prudent
persons having ready cash and desiring to have fixed income on monthly basis out of it
without taking risk of loss and without enchasing the principal amount. This scheme
offers highest return with zero risk. Everyone can plan your monthly expenditure with the
certain monthly income under the scheme.

18
Double/Triple Growth Deposit Scheme:
For people who have cash flow at this moment and want to get it doubled/tripled quickly
JBL has introduced Double/Triple Growth Deposit Scheme that offers to make
double/triple money within 8(eight) years 4(four) months and 13 (thirteen) years
respectively resulting a high rate of interest.
Marriage Deposit Scheme:
Marriage of children, especially daughter is a matter of great concern to the parents.
Marriage of children involves expense of considerable amount. Prudent parents make
effort for gradual building of fond as per their capacity to meet the matrimonial expense
of their children specially daughters. Parents get relief and can have peace of mind if they
can arrange the necessary fund for marriage of their children, no matter whether they
survive or not till the marriage occasion.
It can be a great help to the parents if there is any scope of deposit of a modest mount as
per their financial capacity, which groves very fast at high rate o/interest yielding a
sizeable amount on maturity.
With this end in view JBL has introduced Marriage Deposit Scheme, which offers you an
opportunity to build - up your cherished - fund by monthly deposit of serial, amount at
your affordable capacity.
Education Savings Scheme:
Education is a basic need of every citizen. Every parent wants to impart proper education
to their children. Education is the pre-requisite for socio-economic development of the
country. As yet, there is no arrangement of free education to the citizens from the
government level. As such, there should be pre-arrangement of fund to ensure higher
education’s the children. Otherwise higher education may be hindered due to change of
economic condition, income of the parents at the future time when higher education shall
be required. Today's higher education is becoming expired day by day. Parents can get
relief and can have peace of mind if they can arrange the necessary fund for higher
education of their children. As such, JBI, has introduced 'Education Savings Scheme*

19
which offers you an opportunity to build up your cherished fund' by monthly deposit of
small amount it at your affordable capacity or initial lump sum deposit to yield handsome
amount on a future date to meet the educational expenses. Under this Scheme you have
the different attractive options to avail the future benefit i.e. withdrawal of the total
amount accumulated in lump sum or withdrawing monthly benefit to meet educational
expense keeping die principal amount intact or to withdraw both principal and
accumulated profit monthly for a certain period.
Lakhpati Deposit Scheme:
To become a lakhpati is a dream to most of the people of Bangladesh especially to the
lower and lower middle class income group. They experience their expectations and
wants are enormous in nature in our small span of life. To meet our deposit and wants we
need right plan. Keeping the above high mind JBL has introduced "Lakhopati Scheme"
which has flexibility report of maturity and monthly installment as per affordable
capacity.
Kotipati Deposit Scheme:
To become a kotipati is a dream to most of the people of Bangladesh especially to the
lower and lower middle class income group. They experience their expectations and
wants are enormous in nature in our small span of life. To meet our deposit and wants we
need right plan. Keeping the above high mind JBL has introduced "Kotipati Scheme"
which has flexibility report of maturity and monthly installment as per affordable
capacity.
Q-Cash Round The Clock Banking:
Jamuna Bank Q-Cash ATM Card enables the costumers to withdraw- cash variety of
banking transactions 24 hours a day. Q-Cash ATMs are conveniently located covering
major shopping centers, business and residential areas in Dhaka and Chittagong. ATMs
in Sylhet, Khulria and other cities will soon start be introduced. The network will expand
to cover the whole country within a short span of time.

20
With customers Jamuna Bank Q-Cash ATM card they can:
Cash withdrawal Round The Clock from any Q-Cash logo marked ATM
booths.
POS transaction (shopping malls, restaurants, Jewell Aries etc)
Enjoy overdraft facilities of the card (if approved)
Utility Bill Payment facilities
Cash transaction facilities for selective branches nationwide
ATM service available in Dhaka and Chittagong Withdrawal allowed
from ATM’s of Jamuna Bank Ltd., AB Bank, The City Bank, Janata
Bank, IF1C Bank, Jamuna Bank, Public Bank, Eastern Bank Ltd.
respectively
And more to come is Q-Cash
Hire Purchase:
Hire purchase is a type of installment Credit wider which the Hire purchase agrees to take
goods on hire at a stated rate which is inclusive of the repayment of principle as well as
interest for adjustment of the loan within a specified period.
Lease Finance:
Lease means a contractual relationship between the owner o/the asset and its utter- far a
specified period against mutually agreed upon rent. The owner is called the Lessor and
the user is called the Lessee.
Lease finance is one of the most convenient sources of financing of assets via machinery,
equipment vehicle, etc. The user of the assets lease is benefited through tax advantages,
conserving working capital and preserving debt capacity. Moreover, Lease is an off-
balance sheet item 1 .e lease amount is not shown hi the balance sheet of the lessee and
does not affect borrowing capacity.
Leasing enables the lessee to avail the services of a plant or equipment without making
the investment or incurring debt obligation. The Lessee car, use the assets by paying a

21
series of periodic amounts called “lease payment” or “lease rentals” to the owner of the
asset at the predetermined rates and generally hi advance. The payments may be made
monthly or quarterly. Jamuna Bark Ltd., the highly capitalized private Commercial 1
Bank in Bangladesh, has introduced lease finance to facilitate funding requirement of
valued customers & growth of then-business houses.
Personal loan for women Goal:
To make financially sound and solvent surd self-dependent the women. Three categories
of women are under this loan-
1. Self Employed Women
2. Working Women
3. House Wife
Project Finance:
Project loan is considered as long term investment of the bank. If the period is helpful to
improve the economy and has a wide market then the bank thinks about giving project
loan. To give this kind of loans the bank observes the willingness of the customer, his
capacity and his ability to run the project. Having obtained this kind of information the
bank makes a credit report about the customer’s loan proposal. Interest rate on loan varies
from project Ratio of investment of customer and bank varies from customer to customer
and the customer's relationship with the bank.
Loan syndication:
Bank cannot invest more than 15% of its paid up capital on one individual. When the
loan amount exceeds 15% of its paid up capital then the bank share the loan with other
bank for giving one individual and this is call loan syndicate.
Consumer Credit:
Consumer credit scheme is relatively new field of micro-credit activities. People with
limited income can avail of this credit facility to buy any household effects including car,
computer and other consumer durable. It is a special credit scheme and the customers

22
allow the loan on soft terms against personal guarantee and deposit of specified
percentage of equity. The loan is repayable by monthly installment within a fixed period.
Import and Export handling and financing import Financing:
Is the most important method of import -financing International trade take place between
sellers and buyers located in different countries. The parties to a trade transaction are not
always known to each other. Even if they are known to each other the seller may not have
full confidence in the carried worthiness of the buyer or the buyer may not like to pay
before he actually receives the goods. In letter of credit the banker’s credit worthiness is
substituted for the credit worthiness of the importer. Under a bank- cards letter of credit,
the issuing bank gives a written undertaking on behalf of the buyer that the bank will
honor the obligation of payment or expectance as the case may be on presentation of
stipulated documents. As the request of the importers bank issue the letter of credit at a
merging by the govt. instruction. Bail: does not generally issue the letter of credit less
than 50% margin. JBL follow the margin prescribed by the government strictly.
Export Financing:
The Exporter needs finances at various stages, some at pre-shipment stage and the other
at the post shipment stage.
Home Loan Scheme:
To meet the growing need of housing for middle and lower-middle income people, JBL
has introduced Home Loan Scheme. We also support the Bangladesh Bank's Home Loan
Refinance Scheme. The Scheme will also boost up the growth of housing sector. Such
loan shall be available for purchase or construction of new apartments for self-residing
purpose.
Overseas Employment Loan Scheme:
Overseas Employment Loan Scheme is designed to facilitate the Bangladeshi youths
seeking employment abroad but unable to meet the expenses to reach the workplace from
their own sources. The ultimate objective of the scheme is to promote skilled -skilled

23
manpower to different countries across the world as well as to provide support to
Government Policy considering priority of this sector. By availing loan under this
scheme, the active youths of middle and lower middle class can get overseas employment
by avoiding borrowing from the illustrious class or village 'mahjong' at a very high cost
or selling their paternal properties. The scheme will also help fetching foreign currency
for the country as well as fulfill the Bank's commitment to encourage Micro-lending for
poverty alleviation, improve the quality of life and thereby contribute to socio economic
development of the country.
Foreign Remittance:
Jamuna Bank Ltd. has a network of branches in Bangladesh and more branches are going
to be added to network soon. Remittance services are available at all branches and
foreign remittances may be sent to any branch by the remitters favoring their
beneficiaries. Remittances are credited to the account of beneficiaries instantly through
Electronic Fund Transfer (EFT) mechanism or within shortest possible time. Jamuna
Bank Ltd. has correspondent banking relationship with all major banks located in almost
all the countries/cities.
Trading of Government Treasury Bond & Other Govt. Securities:
Jamuna Bank Limited has been nominated as a Primary Dealer by the Bangladesh Bank
for trading 5 years & 10 Years Treasury Bonds and other Government Securities.
Individuals and institutions resident in Bangladesh, including provident funds,
pension funds, bank and corporate bodies shall be eligible to purchase the BGTBs.
Individuals and institutions not resident in Bangladesh shall also be eligible to
purchase the BGTBs.

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2.17 PRODUCTS OF JBL RAYERBAGH BRANCH:
JBL Rayerbag Branch offers mainly the general banking facilities such as receiving
deposit, paying of cash and giving loan etc. They also offer-
 Online Banking System
 Money gram
 ATM
 Pay order
 Demand Deposit
 Debit Card
 Credit Card
 Visa Card
 Easy Loan
 Remittance etc
 SME Banking
 Foreign Exchange
2.18 PRINCIPAL ACTIVITIES OF JBL:
The principal activities of the bank are to provide all kind of commercial bank activities
encompass a wide range of services including excepting deposits, making loans,
discounting bills, conducting money transfer and foreign exchange transactions and
performing other related services such as safe keeping, collections, issuing guarantees,
acceptances and letters of credit to its customers through its branches in Bangladesh.

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2.19 JAMUNA BANK LTD FOUNDATION (5 YEARS FINANCIAL
HIGHLIGHTS):
Tk in BDT.million
Particulars 2015 2014 2013 2012 2011
Authorized
capital
10000 10000.00 10000.00 10000.00 10000.00
Paid up capital 6141.19 5160.67 4487.54 4487.54 3648.40
Reserve fund &
other reserve
9567.16 5650.00 4393.40 3837.29 3633.11
Shareholders’
equity
15708.35 10810.67 8880.94 8324.83 7281.51
Total Deposits 118849.18 114635.13 97485.61 79623.13 70508.05
Total liabilities 127150.82 128683.91 106282.01 101353.68 79783.62
Investment 34722.81 39963.54 31392.20 39118.93 16314.93
Import business 70296.40 59909.80 52751.30 57705.20 55907.00
Export business 67080.80 64988.60 64250.50 68844.10 57929.40
Total asset 142859.17 139494.58 115162.95 109678.51 87065.13
Profit before tax 2186.79 3068.80 2968.91 3206.90 2817.39
Profit after tax 1642.45 1347.12 1135.19 1042.05 1330.19
Earnings per
share (EPS)
2.67 2.61 2.53 3.19 2.62
No of share
outstanding
614.12 516.07 448.75 448.75 364.84
No of
employees
2304 2204.00 2138.00 1997.00 1786.00
No of
shareholders
38596 46984 51535 51758 52903
Number of
branches
108 97 91 83 73
Source- Annual Report 2015, Page – 50, 51
Table-2: 5 years financial highlights of JBL

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2.20 SWOT ANALYSIS OF JBL:
SWOT analysis is an acronym of an organizations strengths, weakness, opportunities, and
threats. This underlying assumption of analysis is that mangers can better formulate a
successful strength after they have carefully reviewed the organizations strengths and
weakness in the light of the threats an opportunities, presented by the environment. With
my little experience I would like to mention the SWOT of JBL bellow
STRENGTHS WEAKNESSES
Experienced top management. Limited market share.
Satisfactory capital base. Exposure to large loan-
Low infection in loan Excessive dependency on term deposits.
Exposure.
Weak fund management.
Prospective IT infrastructure. High cost of fund.
Islamic Branch funds are not ring fenced.
OPPORTUNITIES THREATS
Regulatory environment Increased competition in the market for
favoring private sector Quality assets.
Development.
Supply gap of foreig
n currency.
Credit card. Over all liquidity crises in money market.
Small and medium
Enterprises.
Table-3: SWOT analysis of JBL.

CHAPTER - 03
DESCRIPTION OF SME

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3.1 SME BANKING AND SERVICE IN BANGLADESH:
Historically, Bangladesh followed a development strategy in which private investment
was controlled through a host of regulations involving investment sanctioning, credit
disbursement, import licensing, foreign exchange allocation, etc. While these regulatory
barriers thwarted private investment in general, the impact fell unevenly on SMEs. This
was because of the relative inability of the SMEs to cope with the regulations compared
to their large-scale counterparts. Thus, the policy regime was largely biased against the
SMEs although, paradoxically, promoting SME development was a stated objective of
successive governments.
In a bid to render its industrial sector internationally competitive and to move towards
greater efficiency in its production structure, Bangladesh implemented a number of
economic reforms during the 1980‟s, underwritten by the familiar structural adjustment
policy. This included deregulation of sanctioning procedure and relaxation of other
regulatory barriers, easing of import procedure, reducing trade barriers, following a
market oriented exchange rate policy, and implementation of fiscal, monetary and public
enterprise reforms. These reforms helped remove a large part of the policy bias against
SMEs that prevailed earlier. Recent studies confirm that these reforms had positive
impacts reflected in a fairly rapid growth of the sector during the past decade. However,
because of their structural weaknesses, the SMEs may need more pro-active policies for
their development in addition to the further removal of the policy biases. Contribution of
SMEs in some selected countries shows that it has provided very significant proportion of
GDP and employment in their national economy.
3.2 REASONS FOR FINANCING ON SME BY JAMUNA BANK:

28
The main focus of Jamuna Bank is to develop human and economic position of a country.
Its function is limited only to providing and recovering of loan but also tries to develop
the economy of a country. So reasons for this program from the viewpoint of JBL:
3.2.1 Support small enterprise :
The small enterprise, which requires BDT 5 to 50 lacks loan, but they have no easy
access to the banks/financial institutions. For example: in case of Jamuna bank
Swabolombi loan, an amount of 5 to10 lacks is provided without any kind of mortgage.
3.2.2 Economic development:
Economic development of a country largely depends on the small and medium seal
enterprises. Such as, if we analyze the development history of Japan, the development of
small & medium enterprise expedites the development of that country.
3.2.3 Employment generation:
The bank gearing employment opportunities by two ways: firstly, by providing loan to
the small enterprises expanding, these business require more workers. Secondly, small &
medium enterprise program requires educated and energetic people to provide support to
entrepreneur.
3.2.4 Profit making:
SME program is new dimension banking system in the banking world. Most of the SME
officers are providing door to door services to the entrepreneurs. Entrepreneurs are
satisfied by the service of the bank and make profit.
3.2.5 Encouraging manufacturing:
The focus of Jamuna Bank Ltd. Is to encourage manufacturing by the entrepreneurs who
produce by purchasing various types of material if possible because if the can produce in
line of purchase profits will be high.
3.2.6 Spread the experience:

29
Another reason of Jamuna Bank Ltd. is to spread the knowledge on the importance of
SME banking regarding various business. The customer services officer share their
knowledge from various business and tries to help the entrepreneurs who have shortage
of the gathered knowledge. SME officers who are the driving force of SME division of
Jamuna Bank also gather knowledge about various businesses and make stronger
knowledge base.
3.3 PURPOSE OF SME LOAN:
 Working capital
 Purchasing of capital machinery
 Delivery Van /Transport for business purpose
 Renewing office/ Business premises
 Purchase of commercial land, possession for new venture
 Other eligible portfolio of the bank
3.4 SME EXPOSURE LIMIT:
The minimum and maximum exposure of the bank on single Small Enterprise shall
remain subject to the following:
3.4.1 In case of working capital finance: Maximum up to 100% of the net required
working capital or 75% of the sum total of inventory and receivables whichever is lower.
3.4.2 In case of fixed assets purchase: Maximum up to 90% of the purchased price.
A. Limit on clean facility for Tk. 2 Lac to below Tk. 10 Lac:
In order to facilitate growth of smaller loans, banks are free to determine security

30
requirements
For loan below Tk. 10 Lac
As a minimum Bank must take charge on assets being financed
Branch should also obtain other common documents/ charge
documents as applicable
B. For Loan amounting Tk. 10 Lac to Tk. 50 Lac
Registered mortgage over immovable properties with registered power
of attorney and Disclaimer from the mortgagor(s);
Hypothecation on the inventory, receivables, advance payments, plants
& machineries
Personal guarantee of spouse/ parents/ other family members
Third party guarantee from a person acceptable to the Bank
Postdated cheques for each installment and one postdated cheque for full
loan Value and full interest value.
Branch shall also obtain other common documents/ charge documents as
applicable
C. Maximum Exposure:
As per Bangladesh Bank's Guidelines the Bank can take the following maximum
exposure in SME finance:
% of Classified SE Advances to Total Maximum Limit
Portfolio of SE Advances
A. Below 5% 10 times of the equity
B. Below 10% 6 times of the equity
C. Below 15% 4 times of the equity
D. Up to and above 15% Up to the equity
Table-4: Exposure Limit of SME Financing for Banks

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3.5 LOAN PRICING:
3.5.1 For small enterprises:
For unsecured loan: 19.00%
For partially or fully secured loan: 16.00 % to 19.00%
3.5.2 For medium enterprises:
Interest rate varies from 16.00 to 19.00% (Interest rate may be changed from time to
Time according to Bangladesh Bank Guideline)
3.5.3 Loan processing fee:
For unsecured loan: (0.5 to1.50%) + VAT
For partially or fully secured loan: (0.5% to 1.50%) + VAT
For overdue: Penal interest shall be charged @ 3% on the overdue amount
Other fees & charges:
Documentation Charge - BDT- 2,000.00 Cheque Dishonoring Charge-
BDT-500.00
Security Replacement Fee - BDT-2,000.00 Reminder Fee- BDT-200.00
CIB Collection
Fee - BDT-50.00 Reschedule Fee- BDT-2,000.00
Legal & Asset Valuation Fee -BDT- At actual
Early Settlement Fee - 1st quarter of loan tenor: 5%, 2nd quarter of loan
tenor: 4%, 3rd
Quarter of loan tenor: 3% but for repeat financing it may come up to 1%
3.6 PERIOD OF LOAN:
 For continuous Loan: 1 (one) year

32
 For Term Loan: Maximum up to 5(five) years
3.7 MODE OF REPAYMENT:
For continuous loan credit turnover must be equal to the limit amount in a quarter
and full and final adjustment within the validity period
For term loan, repayment to be made by monthly installment and full and final
adjustment within the validity period.
3.8 SECURITY FOR LOAN FACILITY:
Registered mortgage of property/assignment of possession right
Hypothecation of stock and inventories
Ownership of the vehicle/machinery purchased in the name of the Bank
Ownership of the space/possession right purchased in Bank's name
Personal guarantee of spouse
Personal guarantee from the person(s) acceptable to the Bank
Postdated cheque
Any other security as deemed fit on a case to case basis.
3.9 DOCUMENTS REQUIRED FOR THE LOAN FACILITY:
Loan Application Form duly filled in and signed by the customer.
Borrower's Basic Fact Sheet under the seal and signature of the borrower.
A written declaration obtained from the borrower divulging details of various
facilities already obtained from other institutions.
Acceptance of the terms and conditions of Sanction Advice
Copy of up-to-date Trade License

33
Photographs of the client(s)/proprietor/ partners/ directors duly attested.
Personal net worth statement of the proprietor / partners/ directors.
Copy of up-to-date TIN Certificate.
Short description of the products of the enterprise.
Project Profile (if new project).
Quotation/ Indent/ Pro-forma Invoice etc. (as applicable)
Marketing distribution system of the company.
Short profile of the proprietor / partners/ directors mentioning their business
experience/ education etc.
A latest liability statement of all the business concerns of the Group with other
Banks/ Financial Institutions (Mentioning -name of business concern, name of bank
and branch, nature of facility, limit amount, outstanding, overdue, if any etc.)
Latest Credit information Bureau (CIB) report from Bangladesh Bank.
Copy of financial statements for last 03 years duly singed by the borrower
Copy of Registered Partnership Deed duly certified as true copy or a partnership
Deed on non-judicial stamp of Tk.150 denomination duly notarized (as applicable).
Copy of Memorandum & articles of Association of the company including
Certificate of Incorporation duly certified by Registrar Joint Stock Companies (RJSC)
and attested by the Managing Director accompanied by an up-to-date list of Directors.

34
3.10 DEDICATED SME BRANCHES OF JBL:
Although all the branches of Jamuna Bank Ltd (JBL) have got SME marketing officers,
there are 8 dedicated SME banking branches for special attention to SME financing. The
special attribute that SME branches have is that these 8 branches must invest minimum
50% of their deposit amount to SME financing. This makes a clear idea of the special
care these branches give to
SME financing. These 8 branches are:
 Jurain SME Service Centre
 Madaripur SME/ Krishi Branch
 Munshigonj SME/ Krishi Branch
 Tongibari SME/ Krishi Branch
 Chapainawabgonj SME/ Krishi Branch
 Kazipur SME / Krishi Branch
 Sherpur SME / Krishi Branch

35
3.11 STRUCTURE OF SME DIVISION:
MD
DMD (Corporate) DMD (Credit)
Head of SME Bankig
Head of SME- AuditHead of Recovery Head of CRM
Marketing (SME Banking) (SME Banking) Unit
Business Women Recovery Risk Management
Development Entrepreneur Officer Officer
Manager Cell
Group Leader
SME Centre at
Branches
FIGURE-4: STRUCTURE OF SME DIVISION

36
3.12 PRODUCT OF JAMUNA BANK SME DIVISION:
3.12.1 Jamuna Swabolombi:
Most of the small enterprise customers suffer from capital shortage. Business is a going
concern and to survive in the market, capital is essential for further expansion. In most
cases, the small entrepreneurs do not won adequate immovable property that can be
expected by bankers as collateral for loans. Movable assets that the SE can provide are
rarely accepted as principal security for loans. To overcome this problem, Jamuna Bank
Limited has come forward with a new product for SME customers named as “Jamuna
Swabolombi”.
Under this product, if the customer has regular cash flow to pay installments, further
security shall not be insisted other than the hypothecated stock and items financed and
personal guarantee of the customer as well as third party guarantor(s).
A. The salient feature of Jamuna Swabolombi
Table-5: Features of Jamuna Swabolombi
Customer Segment Any Small Size Entrepreneur
Mode of Finance Term Loan
Experience Minimum 02(Two) years
Age Limit Between 20 years to 60 years
Loan Amount BDT- 5.00 Lac to BDT- 10.00 Lac

37
B. Security/Collateral (case to case basis):
Hypothecation on present and future assets.
At least one Personal Guarantee(s) of immediate family member
[Spouse/Parents/Brother(s)/Partner(s)/Director(s) of limited company]
Personal guarantee of the proprietor/partners/directors of limited company.
Any other security as deemed fit on a case-to-case base.
Other usual charge document.
Legal Documents: As per PPG.
Interest Rate: As per PPG.
Maximum period of loan; 24 months for trading and service industry and 37 months for
manufacturing industry. For repeat customer this clause is relaxed.
Repayment method: Installment basis.
Disbursement mode : Shall be disbursed in lump-sum/ at a time
3.12.2 Jamuna Bonik:
Now SME customers are being involved in foreign trade, their network has been
expanded throughout the world. To facilitate the foreign trade transactions of the SME
clients, Jamuna Bank is offering a product named „Jamuna Bonik‟.
A. Purpose:
To settle foreign trade payment & import document retirement line (mainly import
financing, e.g., L/C and LTR facility).
B. Key Features:

38
Loan Amount: Min. BDT 5.00 lac to Max. BDT 50.00 lac.
Tenure: For each L/C highest 04 months and for each LTR highest 06 months.
L/C Margin and Commission: As per negotiation.
Fast and quality service.
No hidden charge.
C. Eligibility:
Having business experience for at least 2 years in the same line.
Age Limit: 20 years to 60 years.
D. Required Documents:
Last twelve months‟ sales statement.
Last twelve months‟ bank statement.
Valid Trade License of last two years.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors
3.12.3 Jamuna Sommriddhi:
Most of the small enterprise customers suffer from capital shortage. But capital is
essential for further expansion of business. In general, the small entrepreneurs do not own
adequate immovable property and at the same time movable assets that the SE can
provide are rarely accepted as principal security for loans. To overcome this problem,
Jamuna Bank Limited has come forward with a new product for SE customers under
which loan amount shall be given on the basis of certain percentage of FDR amount
named as “Jamuna Sommriddhi”.

39
Under this product, if the loan amount is covered by FDR up to 30% of the loan amount
and the customer have regular cash flow to pay installments, further security shall not be
insisted other than the hypothecated stock and items financed and personal guarantee of
the customer as well as third party guarantor(s). for repeat as well as experienced other
banks good customer, this security clause may be relaxed and we may take FDR amount
up to 25% of the loan amount.
A. The salient feature of Jamuna Sommriddhi:
Customer
Segment
Any Small Size Entrepreneur
Mode of
Finance
Term Loan
Purpose
To meet a) working capital requirement; b) expansion of business; c)
Refurbishing office/Business premises; d) Purchase of commercial
land/possession for new venture; e) Other eligible portfolio of the bank.
Experience Minimum 02(Two) years
Loan
Amount
BDT- 5.00 Lac to BDT- 50.00 Lac
Table-6: Feature of Jamuna Sommriddhi
Hypothecation on present and future assets.
Personal guarantee of at least one third party guarantor acceptable to the bank.
Postdated cheque for each installment and undated cheque for full loan value.

40
Any other security a deemed fit on a case to case basis
 Legal Documents: As per PPG.
 Interest Rate: As per PPG.
 Maximum period of loan; 24 months for trading and service industry and 37
months for manufacturing industry. For repeat customer this clause is relaxed.
 Repayment method: Installment basis.
 Disbursement mode: Shall be disbursed in lump-sum/ at a time.
3.12.4 Jamuna Jantrik:
Business is a going process and to survive in the market, new machinery nad vehicle with
new technology is essential. To overcome this problem, Jamuna Bank Limited has come
forward with a new product for SE customers named as “jamuna Jantrik”.
Under this product, if the customer is able to provide at least 20% of the cost of
machinery in the form of FDR and has regular cash-flow to pay loan installments, then
further security may not be insisted other than personal guarantee of the customer as well
as third party guarantor(s).
A. The salient features of Jmauna Jantrik:
Customer
Segment
: Any Small Size Entrepreneur
Mode of
Finance
Lease Finance
Purpose To procure any commercial capital machinery and equipment/vehicle
and any other eligible portfolio of the bank
Experience Minimum 02(Two) years with successful track record.
Loan Amount BDT- 5.00 Lac to BDT- 50.00 Lac

41
Table -7: Features of Jmauna Jantrik
Hypothecation of leased assets.
Personal guarantee of the proprietor/partners/directors of limited company.
Personal guarantee of at least one third party guarantor acceptable to the bank.
Lease rental for each installment and undated cheque for full loan.
Any other security as deemed fit on a case-to-case basis.
 Legal Documents: As per PPG.
 Interest Rate: As per PPG.
 Maximum period of loan : 60 (Sixty) months
 Repayment method: Installments basis.
 Disbursement mode: Shall be disbursed in lump-sum/ at a time.
3.12.5 Jamuna Nari Uddogh:
About fifty percent of our total population is women and many of them have succeeded
as a business entrepreneur. To give our incomparable ladies some extra ease and to help
them to get financial freedom, Jamuna Bank Ltd. is offering a product „Jamuna Nari
Uddogh‟. To make their dream come true, Jamuna Bank is always with them as a true
friend.
Under this product, if the women entrepreneur has regular cash flow to pay installments,
further security shall not be insisted other than the hypothecated stock and items financed
and personal guarantee of the customer as well as third party guarantor(s).

42
A. The salient features of Jmauna Nari Uddogh:
Customer
Segment
: Any Small Size women Entrepreneur
Mode of
Finance
Term Loan
Purpose To meet a) working capital requirement; b) expansion of business; c)
Refurbishing office/Business premises; d) Purchase of commercial
land/possession for new venture; e) Other eligible portfolio of the bank.
Experience Minimum 02(Two) years with successful track record.
Loan
Amount
BDT- 5.00 Lac to BDT- 10.00 Lac
Table -8: Features of Jmauna Nari Uddogh
B. Required Document
Last Twelve months sales statement.
Last Twelve months bank statement of transactional account.
National Voter ID/ Passport/ Ward Commissioner/ UP Chairman Certificate of the
borrower.
Photograph of the proprietor and the guarantors.
Utility bill of business.

43
3.12.6 Jamuna Chalantika:
From the very beginning, one of the goals of Jamuna Bank Ltd. is to provide services to
the under privileged people of remote areas. Keeping that idea in mind, the Jamuna Bank
Ltd. has come forward with a product for SME customers named „Jamuna NGO
Shohojogi‟. „Jamuna NGO Shohojogi‟ ensures wholesale financing through the reputed
NGOs in the country whose past records are remarkable, repayment behaviors are
satisfactory, growth rates are significant and above all loan monitoring & recoveries are
above 95%.
A. Purpose:
To provide loan facility to the small enterprise through wholesale lending to the NGOs.
B. Key Features:
Loan Amount: Max. limit BDT 500.00 lac
Tenure: Max. 48 months.
Interest Rate: Competitive interest rate.
Monthly installment basis.
C. Eligibility:
Any type of NGO having certificate from Micro Credit Regulatory Authority to operate
business in Bangladesh.
Having business at least for 5 years in the same line.

44
Personal guarantee of all the directors.
3.12.7 Jamuna Shachchondo:
Who does not want „Shachchondo‟ in life? For the financial ease in one business, Jamuna
Bank is offering „Jamuna Shachchondo‟ product through which one can enjoy both
overdraft and term loan facilities.
A. Purpose
To meet up working capital requirement of the business.
B. Key Features
Loan Amount: BDT 15.00 lac to BDT 50.00 lac.
Tenure: For 1st time loan- 12 months to 30 months. For Repeat Loan- 36 moths to 48
months.
Interest Rate: Competitive interest rate.
A FDR shall be taken covering minimum 25% of the total ticket size. The SOD facility
shall be allowed upto 90% of the FDR amount.
Guarantor must be renowned business person and have permanent residence in the
commanding area/ possession of the shop.
Business premise must be owned/ possession held by the borrower.

45
C. Eligibility:
Having business for at least 5 years in the same line.
National Voter ID/ Passport of the borrower.
Photographs of the borrower and the guarantors.
Utility bills of the concerned business.
3.13 CRITERIA AND CONDITIONS OF SME LOAN:
There presents some requirements that must fulfill to get any SME Loan form Jamuna
Bank. They are,
3.13.1 Enterprise Selection Criteria:
The success of SME largely depends on the selection of a business and man behind it. In
terms of the business (Enterprise), the following attributes should be sought:
The business must be in operation for at least one year
The business should be environmental friendly (Ex: No narcotics or Tobacco
business) -The business should be legally registered, i.e., valid trade license,
income tax or VAT registration, wherever applicable.
The business should be in legal trade, i.e. smuggling will not be allowed or

46
socially unacceptable business will not be entertained
The business must have a defined market with a clear potential growth
The business must be located ideally close to the market and the source of its raw
materials/ suppliers. It should have access to all the utilities, skilled manpower's
that are required. .
Any risk assessed by the management in turn will become a credit risk for the
bank. So ' effort should be made to understand the risk faced by the business.
3.13.2 Entrepreneur Selection Criteria:
In order to understand the capability of the management behind the business, the
following should be assessed:
The entrepreneur should be physically able and in good health, preferably
between age of: 20 to 60. If the proprietor is an elderly person closer to 60, it
should be seen what is the succession process will be and whether it is clearly
defined or not.
The entrepreneur must have the necessary technical skill to run the business, i.e
academic background or vocational training, relevant work experience in another
institution or years of experience in this line of business.
The entrepreneur must possess a high level of enthusiasm and should demonstrate
that he is in control of his business and has the ability to take up new and fresh
challenges to take the business forward.
Clear-cut indication of source of income and reasonable ability to save.
3.13.3 Guarantor Selection Criteria:
Proper selection of guarantor is also equally important. The following attributes are
important while selecting the guarantor:
The guarantor must have the ability to repay the loan and is economically solvent
(check his/ her net worth)

47
The guarantor should be aware of all the aspect of the loan and the responsibilities
The guarantor should be well known to the entrepreneur
3.14 PROCESSING AND SCREENING OF LOAN PROPOSAL:
Currently all the branches of JBL has dedicated SME officers for marketing the SME
Loan. These officers help in SME Loan and Deposit product marketing, proposal
preparation, loan documentation, loan disbursement, loan monitoring and recovery.
Every loan proposal is generated at the grass root level through the marketing officers.
These officers primarily generate the proposal and process the positive proposal under
supervision of "Area Group Leader" and place it to their respective "Regional SME
Center". The Head of Regional SME Center Business Development Manager (BDM)
may decline the unviable loan proposal at their level. In viable cases, he may conduct
physical inspection (if necessary) and send the positive proposal to SME-CRM Unit. The
CRM unit at Head Office analyzes every pros and cons of the proposals a
Recommends to the management for sanction of the loan if they think viable. After
sanction of the proposal, the SME- CRM unit sends the loan file to the concerned SME
Center for disbursement. After completing all documentation formalities as per sanction,
the center will disburse the loan through their respective branches after obtaining
disbursement authority from Credit Administration Division (CAD) and report it to
"SME Banking Division" at Head Office. The Work flow diagrammatically is as below:
SME-CRM unit
Regional
SME center/ SME center
Branches
Area Group
Leader

48
Figure-5: SME centralization center of JBL.
3.15 MARKETING PROCESS RELATED TO SME LOAN:
3.15.1 MARKETING PROCESS:
In terms of marketing the SME loans the financial institutions start out with extensive
business and marketing plans to attract potential customers. The marketing structure of
Jamuna Bank Ltd is as follows:
Geographic Segmentation: In terms of SME Loan, it targets every region
around the country in terms of small business. The dedicated SME marketing
officer is attached with all the branches to hunt the SME clients and nurture the
existing ones which mean each and every branch of Jamuna Bank Ltd. acts like a
dedicated SME office.
Demographic Segmentation: The demographic segmentation is of very
importance in
SME loan disbursement in JBL. For example, the age of the SME clients must
range between 20 to 60 years.
Psychographic Segmentation: In terms of SME Loan, clients are different in
attitudes, interest and activity like some are time constrained and some are money
constrained. So bank always tries to focus these things and then very carefully
provide the loans to the clients.
Behavioral Segmentation: In terms of SME loan, few clients would be found
who are very much highly educated like graduate or post graduate. In the present
scenario of Bangladesh, the highly educated people don't get attracted to SME
loans. That is why the behavioral segmentation plays a major role in determining.
3.15.2 TARGET MARKETING:

49
There are too many different types of customers with too many different kinds of
needs. In terms of SME loans, JBL's target market is small and medium
enterprise. There are three sectors of target marketing which SME follows:
Trading, Manufacturing and Service.
Small and Medium Enterprise
Trading Manufacturing Service
Figure-6: Target market of JBL SME
As the sectors of loan disbursement are different, there are different strategies before and
after loan disbursement. The marketing officers are chosen in such a way that they can
handle different types of customers.
3.15.3 MARKET POSITIONING
In Bangladesh, there are other banks and Non-Banking Financial Organizations which are
relentlessly trying to market their loan products to customer. That is why Jamuna Bank
Ltd has taken some innovative strategies to make a strong position in the market. The
marketing officers are very customer friendly and the loan processing system is made as
easy as possible. For Example, the SME interest rates are comparatively higher than the
other loan products. But the customer service and the other facilities like fast service and
customer friendly environment equivalents all the other disadvantages. For market
positioning JBL SME division provides the services like:
Rescheduling System- If after taking SME loans any customer gets any
problem in repaying the loan then the rescheduling process is made for the

51
Quick Service- The main facility of SME is to provide quick service to the
customers. It takes only 15-20 days‟ time to disburse the loan to the customer's
account.
Direct Service- To get the loan the marketing officers does all the hard
work. They even provide the service in the holidays for the clients' support.
3.15.4 DEVELOPING MARKETING MIX
JBL SME division plans to mix its products in the following manner:
Product: In view of the SME loan, JBL has 2 types of loan: Short term loan and
mid-term loan. Short term loan product means 13/15 months tenor and mid-term
means tenor up to 37 months.
Price: In terms of SME Loan, JBL receives a certain amount of processing
fees and stamp charge for giving loan to customer.
Place: JBL SME division is always active in reaching the customers point of
contact as much as they can. Dedicated SME officers are deployed in each and
every corner of the country.

52
3.16 FLOW CHART OF SME LOAN PROCESSING:
No
Application decline and Return to client
Yes
Yes Application sent back to source
Figure -7:Flow chart of SME loan processing (source- Annual report 2014; page- 102)
Application received
from customer (Branch
of SME team)
SME Team/branch
collects and scrutinized
the appliction
Application
meets basic
PPG
SME officer management
recommends the loan and
sends to credit approved
Application is received by
SME Team and assessed
Credit
approval
Application sent to CADDocumen
ts in
Loan disbursed and
application and charge
doc lodged in safe
custody of branch

CHAPTER – 04
ANALYSIS &
EVALUATION OF SME
FINANCING

53
4.1 CONTRIBUTION OF SME ON SOME ASIAN COUNTRIES:
Contribution of SMEs in some Asian countries shows that it has provided very significant
proportion of GDP and employment in their national economy.
Country SME as % of all
enterprise
Contribution of SMEs to
GDP (%)
Bangladesh 80 20-25
India 97.60 80
Pakistan 60 15
China 99 60
Japan 99.70 69.50
Source: http://journals.abc.us.org/index.php/abr/article/view/4.8Chowdhury/210
Table9: Comparison of SME’s contribution to GDP,
Figure-8: SME Loan on some Asian Countries.
0
20
40
60
80
100
120
140
160
180
India Pakistan China Japan
SME Lona on some Asian Countries
Contribution of SMEs to GDP
(%) 20-25
SME as % of all enterprise 80

54
4.2 SME BUSINESS EARNING SCENERIO OF JBL:
Sl
no
.
Particulars June’2013 June’2014 June’201
5
% of
Growth
(2013-
2014)
% of
Growth
(2014-
2015)
1. Interest from
income from
SME business
94,05076 1,90,51,71
8
5,67,79,1
35
102.57 198.03
2. Earning from
processing fees/
documentation
fees
9,50,277 18,62,243 1,07,16,1
59,17
95.97 475.44
3. Earning from
FDR rate
0.00 1,33,377.7
3
16,76,62
5
100 1157.05
4. Earnings from
refinance facility
from Bangladesh
Bank
23,03,683 24,07,183.
25
15,59,12
9.37
4.49 -35.23
Total 1,26,59,03
6
2,34,54,52
1.98
7,07,31,0
48.54
85.28 201.57
(Source- Annual Report: 2015)
Table-10: SME Business Earning Scenario

55
Figure-9: SME Business Earning Scenario.
From the above table we see that the trend of Jamuna Bank’s earning from SME
financing is increasing. Percentage of growth of earning from interest income from SME
business was 102.57 during 2013-2014 and in 2014-2015 it has been increased to
198.03%. Percentage of growth of earning from processing fees/documentation fees was
95.97 during 2013-2014 and in 2014-2015 it has been increased to 475.44%. Earning
from FDR rate also increased during the period. Earning from refinance facility from the
Bangladesh Bank decreased. Percentage of growth of total income from SME business
Interest from
Income from
SME Business
Earning from
Processing
Fees
Earning from
FDR
Earning from
Refinance
Facility
% of Growth 2013-2014 102.57 95.97 100 4.49
% of Growth 2014-2015 198.03 475.44 1157.05 -35.23
-200
0
200
400
600
800
1000
1200
1400
AxisTitle
SME Business Earning Scenerio

56
was 85.28 during 2013-2014 and in 2014-2015 it has been increased to 201.57%. So we
can comment that SME business is profitably run by Jamuna Bank Ltd.
4.3 PROPORTION OF SME LOAN FROM YEAR 2013 TO 2015:
Jamuna Bank is expanding gradually by empowering different entrepreneurs under SME
sectors in Dhaka and many other areas in Bangladesh. Especially women entrepreneurs
are being encouraged and strengthened to establish and run business, meet up working
capital and other required fund. Government of Bangladesh also put emphasizes to
accelerate SME financing because it can take a part in the overall economic development
in our country.
4.3.1. SME LOAN (PERCENTAGE) IN YEAR 2013:
Total loans and advances of the bank stood at BDT 4829.82 crore as of December 2013.
Trade and commerce, garments industries, large and medium scale industries are the
sectors in which bank extended credit.
Table-11: Percentage of SME Loan in 2013
Sector/Segments Percentage (%)
Trade Finance 29.45%
Exports(RMG) 17.62%
Engineering 10.27%
Housing 8.98%
Food, Beverage, Oil 5.12%
SME 2.04%
Textiles 1.55%
Transportation 1.40%
Pharmaceuticals 1.60%
Telecommunication 1.34%
Hospital Services 0.99%
Agriculture 0.92%
Others 18.72%
Total 100%

57
Figure-10: Percentage of SME Loan on 2013
It is seen that in 2013, Jamuna Bank Limited has provided SME loan only 2.04% that is
less than some other business sector like trade finance, exports or others.
4.3.2 SME LOAN (PERCENTAGE) IN YEAR 2014:
Total loans and advances of bank stood at BDT 6637.77 crore as on December 2014. The
bank recorded a 37.44% growth in loans and advances. Major sectors where the bank
29.45%
17.62%
10.27%8.98%
5.12%
2.04% 1.55% 1.40% 1.60% 1.34% 0.99% 0.92%
18.72%
100%
Percentage of SME Loan on 2013
Percentage (%)

58
extended credit includes trade and commerce, garments industries, large and medium
scale industries etc.
Sector/segments Percentage (%)
Exports(RMG) 16.89%
Engineering 9.42%
Housing 1.94%
SME 5.10%
Textiles 2.10%
Agriculture 3.07%
Others 30.38%
Total 100%
Source- Annual Report: 2014
Figure-11: Percentage of Loan in 2014
21.30%
16.89%
9.42%
1.94%4.56%5.10%2.10%1.32%1.26%0.33%2.33%3.07%
30.38%
Percentage (%)

59
It is seen that in 2014, Jamuna Bank Limited has provided SME loan at 5.10%. It shows
that providing loan in SME has increased than the last years. That’s they are encouraging
more the small entrepreneurs as they can do something better for their living standard.
4.3.3 SME LOAN (PERCENTAGE) IN YEAR 2015:
Total loans and advances of the Bank stood at BDT 79,999.80 million as on December
31, 2015 against that of BDT 66,377.70 million at the end of December 2013. The Bank
recorded 20.52% growth in loans and advances.
Sector/segments Percentage (%)
Exports(RMG) 15.42%
Engineering 10.45%
Housing 1.66%
SME 4.79%
Textiles 2.82%
Agriculture 0.85%
Others 36.50%
Total 100%

60
12.20%
15.42%
10.45%
1.66%
9.38%
4.79%
2.82%
1.38% 2.05%
0.29%
2.21%
0.85%
36.50%
Percentage (%)
Figure-12: Percentage of SME Loan on 2015
It is seen that in 2015, Jamuna Bank Limited has provided SME loan at 4.79%. So, it
shows that they have provided low loan in SME than the previous year because of
increase in competition in SME sector financing.

61
1 2 3 4 5 6
2011 2012 2013 2014 2015
4420.1
6361.8
7781.9
10180.9
12540.6
SME Growth Track (in million)
year amount
4.4 SME GROWTH TRACK (LOAN OUTSTANDING LAST 5
YEARS):
Amount in Million BDT
Year 2011 2012 2013 2014 2015
Amount 4420.10 6361.80 7781.90 10180.90 12540.60
(Source: Annual Report 2015. Page: 209)
Table-14: SME Growth Track
Figure-13: SME Growth track

62
4.5 GRAPHICAL HIGHLIGHTS IN DISBURSEMENT DURING JAN,
2015 TO DEC. 2015:
Month Disburshment (in lac )
January 765
February 950
March 1460
April 2900
May 650
June 1360
July 1240
August 1630
September 1210
October 1480
November 1270
December 1550
(Source- The Financial Express- May, 2016)
Table-15: SME loan disbursement in 2015
Figure-14: Disbursement of SME Loan in 2015
January
5%
February
6%
March
9%
April
18%
May
4%
June
8%
July
7%
August
10%September
7%
October
9%
November
8%
December
9%
Disburshment of SME Loan (in lac )

63
4.6 DISBURSEMENT OF SME LOAN:
Annual disbursement of Jamuna Bank Ltd is increasing day by day due to its promotional
activities and different types of expansion of its SME products to the customers. So the
amount of loan disbursement to the customers from the year 2012 to 2014 is described as
BDT in millions below:
SL
No.
Period Disbursement Amount (In Lac)
1 2013 769.68
2 2014 2129.31
3 2015 2955.57
(Source- Annual Report: 2015,)
Table-16: Disbursement of SME loan
Figur15: Disbursement of SME Loan.
Jamuna Bank targets it specialized customers to facilitate the SME loan to develop their
condition that can take part to the overall economic development in our society as well as
in our country. It emphasizes especially women entrepreneurs, agriculture project, young
1 2 3
2013 2014 2015
769.68
2129.31
2955.57
Disbursement of SME Loan Amount (In
Lac)
Period Disbursement Amount (In Lac)

64
entrepreneurs etc. It has disbursed loan to them total BDT 2955.57 million in the year
2015which was quite much comparing to the previous year’s disbursement in total.
4.7.1 ACHIEVEMENT OF ANNUAL TARGET:
After segmenting the targeted customers, Jamuna Bank targets the total loan to be sold to
that targeted customers. The yearly target of SME Loan is illustrated below with the
percentage of target achievement.
Year Annual Target Disbursement Achievement of Target
2013 1,000,000,000 769,675,000 77%
2014 3,050,000,000 2,129,305,193 80%
2015 3,500,000,000 2,955,572,698 84%
(Source- Annual Report: 2015, 2013)
Table-17: Annual Target
Figure-16: Achievement of the Target.
Achievement of the target was satisfactory in 2015 but it went down in the years 2013
and 2014 respectively.
1 2 3
2013
2014
201577%
80%
84%
Achievement of the Target
Year Achievement of Target

65
4.7.2 JAMUNA BANK (RAYERBAG BRANCH) SME PERFORMANCE:
The annual performance of 2015-2016 of JBL Rayerbag Branch is,
Year Target Investment Achieve
2015 50000000 32000000 64%
2016 60000000 34700000 (up to
November 28, 2016)
57%
(Source: Personal contact with the Bank authority)
Table-18: Rayerbag Branch SME Performance
Figure-17: Rayerbag Branch SME performance
In 2015 the Bank had a target of 50000000 and it provide SME loan mount 32000000. In
20016 JBL has a target of distribution of 600000. It achieves 64% of its target on 2015,
and it achieves 57%up to November 2016.
0
10000000
20000000
30000000
40000000
50000000
60000000
Year Target Investment Achieve
Series1 2015 50000000 32000000 64%
Series2 2016 60000000 34700000 57%
AxisTitle
SME performance Rayerbag Branch

66
4.7.3 OVERALL ANALYSIS AND INTERPRETATION OF SME LOAN:
SME is the engine of growth in a labor intensive economy like Bangladesh. It creates
more employment opportunity and thereby increasing the purchasing power as well as
aggregate demand. However, despite increasing focus and consequent policy efforts on
such a crucial Small and Medium Enterprises (SME) sector in Bangladesh, flourishing of
this thriving sector is not up to the mark because of fund crisis. The followings are in
detail on APPENDIX (Table A and Table B)
Year Outstanding Overdue amount Overdue % Recovery Rate %
2013 983,371,052 37,023,060 4.00% 96.00%
2014 3,386,132,018 162,927,619 4.81% 95.19%
2015 3,833,560,990 216,233,972 5.64% 94.36%
(Source- Annual Report: 2015, 2013)
Table-19: Calculation of Recovery rate
Figure-18: Percentage of Outstanding Loan.
0.00
500000000.00
1000000000.00
1500000000.00
2000000000.00
2500000000.00
3000000000.00
3500000000.00
4000000000.00
2013 2014 2015
983371052.00
3386132018.00
3833560990.00
Percentage of Outstanding Loan

67
Figure-19: Presentation of Overdue percentage under SME
Figure-20: Presentation of Recovery Rate under SME.
As the consequence of increasing the loan amount and the customers of SME products
the recovery rate of this loan has been decreasing over the years. So with the increasing
rate of loan amount, the rate of recovery is decreasing day by day.
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2013
2014
2015
Overdue % under SME
Overdue %
96%
95%
94%
94%
94%
95%
95%
96%
96%
97%
2013 2014 2015
Recovery Rate under SME
Recovery Rate

68
4.8 COMPARATIVE ANALYSIS OF SME LOAN OF DIFFERENT
BANKS IN BANGLADESH (YEAR 2015):
Overall the management of the bank engaged in SME banking is efficient and have
diverse knowledge and banking sector. JBL has initiated to provide training of staff for
well managing and SME customer. But among the different banks in Bangladesh what
the overall key features of SME and its differences are in their policies are described
below.
4.8.1. PORTFOLIO SIZE OF DIFFERENT BANK IN SME SECTOR (Taka
in Crore):
Serial Name of Bank Portfolio size
1 Prime Bank Limited 11.89
2 Dhaka Bank Limited 18.10
3 Eastern Bank Limited 21.00
4 Jamuna Bank Limited 17.00
5 Dutch Bangla Bank Limited 5.53
6 Brac Bank Limited 26.67
Total 100.19
(Source- Personal Communication with Bank Authorities)
Table-20: Portfolio Size of SME of Different Bank

69
Figure-21: Portfolio Size of different bank
From the table we can see that BRAC bank has the highest investment in the SME sector
followed by Eastern Bank Limited in second position. While the Prime bank Ltd., Dhaka
Bank Ltd., Jamuna Bank and Dutch-Bangla Bank Limited are third, fourth and sixth
respectively.
4.8.2 LOAN SIZE:
Particulars JBL DBBL BRAC
Loan size 1-50 lac 1lac - 50lac 1lac- 100lac
Table-21: Loan size of different banks
Among the Banks BRAC Bank Limited offers the highest loan amount to customer
where as other banks offer the lowest loan to its customer.
0
5
10
15
20
25
30
Prime Bank
Limited
Dhaka Bank
Limited
Eastern Bank
Limited
Jamuna Bank
Limited
Dutch Bangla
Bank Limited
Brac Bank
Limited
Portfolio Size of Different Bank

70
4.8.3. RATE OF INTEREST:
Particulars JBL DBBL BRAC
Rate of Interest 14% p.a 15% p.a 15% p.a
Table-22: Rate of interest of different banks
In terms of interest rate JBL bank offer the lowest rate of interest to its customers. JBL is
the only bank that offer fixed rate for any loan customer.
4.8.4. LOAN PROCESSING FEE:
Particulars DBL JBL BRAC
Loan
processing fee
.50 to 1% of
Loan amount
TK 500 1% of the
loan amount
Table-23: Loan processing fee of different banks
Among the bank the lowest loan maturity date is offered by Dhaka Bank Limited and
other banks including Jamuna Bank offer the highest maturity period.
4.8.5. PERIOD OF LOAN:
Particulars DBL JBL BRAC
Period of loan 1yr – 3 yrs 1yrs – 5 yrs 1yr – 5 yrs
Table-24: Loan period of different banks
Among the bank the lowest loan maturity date is offered by Dhaka Bank Limited and
other banks including Jamuna Bank offer the highest maturity period.

71
4.8.6 COMPARATIVE ANALYSIS OF SME CREDIT SCHEME OF
DIFFERENT BANK:
Performance Prime
Bank
Dhaka
Bank
Jamuna
Bank
DBBL Brac Bank
Year of
operation
2015 2015 2015 2015 2015
Disbursement 115.57 crore 122.27 crore 139.81 crore 113.43 crore 96.67 crore
Rate of
recover
81% 87% 94.36% 93% 91%
Table-25: Comparative Analysis of SME Credit of Different Banks
Figure-22: Disbursement Position of Different Banks
0
50
100
150
Prime
Bank
Dhaka
Bank
Jamuna
Bank
Dutch
Bangla
Bank
BRAC
Bank
Disbursement Position of Different Banks
(Amount in Crore)
Disbursement (Amount in
Crore)

72
Figure-23: Recovery Rate of Different Banks.
From the above analysis and findings of the study, it is obvious that there is a lot of
market potential for JBL in SME loan. As we came to know from the analysis that BRAC
bank is the most dominant player in the market and except BRAC bank other players are
more or less similar category. But since the market yields a high growth potential and
BRAC bank having basic infrastructure and a larger customer base it is very difficult for
the other bank to cope with BRAC bank unless they build some alliances to develop such
infrastructure to serve the client at better service. Initially, it will require a huge
concentration, but the bank is financially sound to incur such amount of investment in
new line of business. Other than the investment JBL should improve their credit facilities,
customer service, and add attractive features to the product to attract every class of
people.
81%
87%
94%
93%
91%
70%
75%
80%
85%
90%
95%
100%
Prime Bank Dhaka Bank Jamuna
Bank
Dutch
Bangla Bank
BRAC Bank
Recovery Rate of Different Banks
Recovery Rate

CHAPTER - 05
FINDINGS &
RECOMENDATIONS

72
5.1 MAJOR FINDINGS:
Jamuna Bank Ltd actively participates in the growth and expansion of the national
economy by providing SME loan to viable borrowers. While analyzing the SME loan
policies and procedures of the Bank, the following areas are mostly viewable:
Japan emphasizes most 99.70% on SME as percentage of Loan.
India gets the largest return 80% from SME on GDP among Bangladesh, India,
Pakistan, China and Japan.
SME business earning scenario of JBL is satisfactory in the year 2013-2014 and
JBL improve its earning scenario quit well on the year 2014-2015.
In the year 2013, SME loan of JBL was 2.04% of its total loan. In the year 2014
this improves to 5.20% but in the year 2015 the SME loan decreased to 4.79%
because of increasing competition on this SME sector.
In last 5 years analysis the SME loan amount of JBL is improving and it’s become
stronger in this sector. It was 4420.10 million Tk. in 2011 & goes to 12540.60 on
the year 2015.
The Disbursement of SME is increased throughout the year. Although, it’s
decreased and increased throughout the year, but the performance of JBL is
satisfactory in the year 2015.
JBL has the lowest loan amount TK. 1-50 lac among Brack Bank, DBBL & JBL,
but JBL has the lowest amount of interest among them.
The Disbursement amount of SME by JBL is increasing year to year because of
JBL has a number of variety SME offers.
JBL especially emphasis on Women Entrepreneurship, Agricultural Project,
Young Entrepreneurs for SME loan.
JBL targets its special customers to facilitate the SME loan and develop their
condition.
JBL annual target achievement on SME is satisfactory. JBL achieve 77% of its
target on the year 2013 & it’s improved to 84% in the year 2015.
SME annual disbursement target of JBL Rayerbag Branch is 80% of its SME loan
amount. The performance is nor satisfactory. In the year 2015 it achieves 64% &
in the year 2016(up to November 2016) it is 57%.
The rate of loan recovery is decreasing. It was 96% on 2013 and in the year 2015
it falls to 94.36%.

73
Among Brack Bank ltd, DBBL, Dhaka Bank ltd, Prime Bank ltd, Eastern Bank
ltd, Brack Bank provide the highest amount of SME loan. JBL is on the 4th
position among those Banks.
At this very time the rate of interest in Savings Account is low (3.25%), that’s
why customers lost their intention to have a Savings Account
There is a variety of Deposit scheme for the customers of JBL. They have
Monthly Schedule Scheme (MSS), Double Growth Policy, Triple Growth Policy,
Kotipoti Scheme. It’s quite attractive for the customers
Re-verification is not done regularly due to time constraints.
Compared to other banks (public and private) the performance of Jamuna Bank
Ltd is not markable in increasing their SME Portfolio over the years, but the
growth they are showing is good.
Lack of update products is a drawback of the general banking area of the Jamuna
Bank Ltd. New products such as student loan, medical loan, marriage loan are not
available in JBL.
There is a lack of ATM booth across the country, So that’s why customers find it
difficult to use its ATM booth.

74
5.2 RECOMMENDATIONS:
The following suggestions are put forward for present and future sustainability of the
SME of Jamuna Bank Ltd.:
Bangladesh need to emphasize more to get more return on GDP from SME.
JBL can increase its SME loan size to attract more strong customers.
The SME Department of JBL Rayebag Branch can introduce more diversify and
customer friendly SME offerings for the SME customers. So that the customer
feel more comfortable and interested to their SME offers.
To divert the potential buyers as customer, JBL Rayerbag Branch can make more
promotional activities for SME.
The rate of recovery of SME loan is decreasing. It was 96% in 2013 & its
decreased to 94.36% in 2015. The JBL can examine its SME customers more
effectively while sanctioning a loan & the loan recovery activity can perform
more effectively to recover the loan amount.
SME is the most important sector for the economy of Bangladesh. JBL can
emphasis more on SME to become a strong player in this field & also become a
market leader in future.
Interest rate of SME needs to be made more competitive in order to expand the
SME portfolio.
Loan documentation process needs to be more effective in order to reduce
guarantee risk and loan default.
The banking industry is extremely competitive and continuously changing.
Competitor banks are introducing new products and services and taking new
actions to manage SME risk. So, JBL should put more time and money in
developing new SME products

SME BANKING IN BANGLADESH

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