Small & Medium Enterprise Financing - An Evaluation of National Bank Limited

Abstract

Small and Medium Enterprise (SME) Financing is a topic of significant research interest to academics, business students and an issue of great importance to the policy makers around the world. This paper focuses on the scopes and the financial constraints of SME in Bangladesh and an evaluation of SME financing will be done in this report and National Bank Limited is the key organization for this study. For convenience of preparing this report, the whole report is divided into 5 chapters. CHAPTER 1 is containing the introductory part of the report that explains background of the report, objectives of the report, methodology used and limitations faced in preparing this report. The report is aimed to analyze and evaluate the performance dynamics of SME financing activities of National Bank Limited and also to portray current situation and prospects of SME financing in Bangladesh. CHAPTER 2 has introduced National Bank Limited in brief by its objectives, mission, vision, management structure, performance at a glance and products offered. Established as the first private sector Bank fully owned by Bangladeshi entrepreneurs, National Bank Limited has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain. Banking is not only a profit-oriented commercial institution but it has a public base and social commitment. So, NBL introduced National Bank Monthly Savings Scheme (NMS), Special Deposit Scheme, Consumer's Credit Scheme and NBL Housing Loan, NBL Small Business Loan, Small House Loan Scheme, Festival Small Business loan etc. to combine the people of lower and middle Income group. CHAPTER 3 has defined Small & Medium Enterprise Financing and SME financing by National Bank Limited. Though SME financing is a new concept in our country, banks now are segregating SME sector for loan sanctioning purpose. Banks define SME as per some criteria. In simple words, following general criteria for eligible to get SME loan, banks provide loan facilities to SMEs in their own limits and procedures is called SME Financing. National Bank's SME products are mainly divided in to three parts- Existing Loan Products, Newly opened Loan Products and Upcoming Loan Products. In year 2006, NBL has disbursed 52 crore taka in SME projects and Manufacturing sectors get 60%, Trade sectors get 30010 and Service sectors get 10% of total disbursements. Although the SME Banking is a new concept in National Bank Limited, this is growing faster than the other division in NBL.