sme banking of brac bank

View with images and charts SME Banking of Brac Bank Chapter -1 1.1 Introduction SME is new challenge to every bank. The success or failure of banks greatly depends on SME loan. On the other hand, credit (whatever general or SME) perchance falls in hands of defaulter imposing colossal stress on money supply with many other concomitant side effects. Against such a backdrop, banks will have to strike a delicate balance on the seesaw, so smooth credit circulation in economy can be ensured in order that rural and urban development work does not suffer, and at the same time credit must not get into a noxious nexus. Every bank maintains a credit system to manage its credit. Compliance with some standards in credit management has been critical for banks to avoid both pecuniary as well as regulatory penalty. This paper attempts to impart insight on the credit management, especially on SME of banks. It shows fundamental credit risk policies and challenges to SME credit. It also shows the guidelines that should govern the implementation of more detailed lending procedures and risk grading systems so that, subsequently, banks can establish the balance between healthy flows of credit in economy simultaneously with saving itself from the loss of bad debt. As well as bank can maintain proper SME lending for development of rural and urban area. SME concept is explored at length due to its far-reaching contribution in our economy particularly in elimination of penury. Then it features the risk of credit for banks, Bangladesh Bank’s prescriptions on its handling and method of risk measurement and loan classification. With a brief introduction to BRAC Bank Limited, the report details thoroughly on the SME credit appraisal, processing and disbursement. These are very vital for vigilance yet vulnerable to overlook. The paper ends up with recommendations of do’s and don’ts. Sustainable Bank of the Year The bank has already occupied an enviable position among its competitors after achieving success in SME of business operation. The Bank also gained peoples’ support in recent years and it’s continuously increasing. Despite difficult circumstances it became able to sustain with some achievements. It is the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity. 1.2 Statement of the Research Problem: A bank’s existence depends mainly on SME loan. BRAC BANK is one of the leading banks for loan lending. But the bank faces a lot of problems about SME loan, which are mention below: 1) Before lending the lacking of properly analyzes the business risk of the borrowers and

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