(SME)- Small & Medium Enterprise Financing :

Retail Banking Division

Retail Banking under schemes viz, Consumers Credit, Small Enterprise & Rural Credit financing.

Consumer financing is a lucrative sector of financing. Bangladesh Bank vide BRPD circular no. 07 dated 03 Nov, 2004 circulated all commercial Banks about formation of focus group giving importance on three prime sectors------Consumer Financing, Financing of Small Enterprises and Rural Credit.

In the context of Globalisation & Free market economy, multinational companies with their bulk of products intend to meet the demand and needs of middle class, lower middle class people. They have launched huge multipurpose and lucrative consumer products through attractive advertisements. As such a huge profitable market for consumer financing has been opened for commercial banks.

We have the pleasure to inform you that 104^th meeting of the Board of Directors held on 22.01.2007

accorded approval for introduction of Retail Banking under the following noted guidelines

In order to provide financial assistance to the limited/fixed income group for raising their standard of living by acquiring domestic durable items like Refrigerator, TV, Washing Machine, Furniture, Computer, Motor Car, Air Conditioner, House-Furnishing & renovation etc.

As such we may lend our hands of financing to fulfill the needs of consumers under the following schemes.

CONSUMER FINANCING PRODUCTS ARE:

¨ SALARY LOAN SCHEME

¨ CAR/AUTO VEHICLES LOAN

¨ HOUSE RENOVATION LOAN

¨ HOUSEHOLD DURABLES LOAN.

¨ SELF EMPLOYED PROFESSIONAL LOAN

¨ LAND PURCHASE LOAN

¨ MARRIAGE LOAN

TARGET GROUP

Bank will provide financial assistance to Professional like Doctors, Engineers, Architects, Scientists, Chartered Accountants, Self-employed business executives/officers having confirmed/permanent job in any of the following organizations.

1. Government Organizations.

2. Semi-Government & Autonomous Bodies.

3. Schedule Banks, Well-established and reputed Insurance companies,any other alike Financial Institutions.

4. Multinational companies.

5. Large & well established Private Organizations having corporate structure.

6. Teachers of reputed Universities, Colleges & Schools.

GUIDELINES FOR CONSUMER FINANCING:

Consumers Financing is a Personal Loan facility offered to salaried employees of different organizations.

1. Eligibility to apply for the loan:

Bank will sell the above products to salaried employees of different organizations and self employed professionals as stated.

Age: Minium 25 years

Maximum 57 years provided the applicant has minimum 2 years service in the organization.

Maximum age limit may be relaxed by the Managing Director on special ground.

Type A

Executives of reputed multinational companies and large Local Corporate bodies, Foreign/Large local NGOs, Aid Agencies, UN bodies, Govt. & Semi Govt. organizations, Schedule Banks, Government, Semi Government, Autonomous Bodies and Insurance Companies.

Type B

a) Permanent employees of mid-range local companies such as reputed and well established Schools, Colleges & Universities, Pathology Labs, Hospitals, Restaurants, Newspapers, Airlines, Travel agencies, Real – estate with good reputation, Insurance companies, Government employees .

b) Self employed professionals like Doctors, Dentists, Pathologists, Engineers, Architects, scientists, and chartered accountants.

Type C

Contractual employees of Government, Semi Government, Multinational Companies, Schedule Banks, UN Bodies, Diplomatic Missions, Foreign Aid agencies.

Service Length: To be covered by repayment period or 4 years.

The following points must be taken into consideration for eligibility of applicants:-

Minimum Monthly Income/salary must be Tk.20, 000/-(twenty thousand) Gross.

The applicant must be an income tax payee.

2. SALIENT FEATURES OF THE PRODUCT:

Purpose of loan to be stated in the application
Guarantee from the applicant to be obtained.
Required documentation to be obtained as per norms of the credit.
Confirmation from the employer ensuring payment of monthly installment to be obtained.
Guarantee of spouse to be obtained.
Third party guarantee acceptable to the Bank to be obtained.

3. DOCUMENTS TO BE REQUIRED TO AVAIL THE LOAN:

- Three copies of Passport size photographs.

- Last 3 months bank’s statement

- Last pay certificate from the employer/profit/Income Statement of last 3 months for self employed persons.

- Proof of ID/Citizenship certificate from the competent authority.

- Proof of employment of minimum 2/4 years regular service as applicable in the category

- Copy of Employment Letter.

- Salary Certificate from the Employer/ authorization from the employer

- Personal Guarantee acceptable to the Bank(possessing equivalent status/Financial capacity)

- TIN Certificate ( For income tax payer together with IT 10B)

- Spouse guarantee.

- Undated Cheques covering full tenure for monthly recovery.

- One undated blank cheque for total due nonpayment.

- One undated blank cheque equivalent to 6 ( six) months installments with interest to be obtained.

- All charge documents to be executed ( DP Note , letter of guarantee, letter of hypothetication etc.)

4. THE RATE OF INTEREST:

Interest rate is @ 16% per annum.

5. SERVICE CHARGES /FEES FOR THE FACILITY:

1.5% of loan amount or Tk. 2000/- (whichever is higher)

6. DEBT BURDEN RATIO:

Debt burden ratio must not exceed 1/3 of Gross Monthly Income.

7. SECURITY/COLLATERAL REQUIREMENT:

(i) Charge documents to be required as per credit norms.(ii)Third party guarantee acceptable to the bank and salary must be under lien & employers confirmation to be obtained (iii) Spouse Guarantee mandatory for married person. Incase of unmarried persons guarantee of father/mother is mandatory.

8. TENURE OF THE LOAN:

1 year to 5 years depending upon the category of loan & the loanee.

9. MODE OF RE-PAYMENT:

Repayment will be made on the basis of Equal Monthly Installments vis-à-vis Standing Order/Instructions.

10. PROCESS AND SANCTION OF THE LOAN:

If the customer provides required documents the loan must be processed within 3 (three) days positively for onward submission to Head Office. Head Office has its discretion to sanction or to reject the loan with/without assigning any reason.

11. MODUS OPERANDI:

Debit® Loan Account

Credit® SB/CD Account of the borrower with the SBL

The First repayment date will fall due one month after the date of customer’s availing the loan. It may be earlier if customer wants.

12. PENAL CHARGE FOR OVERDUE (DEFAULT) PAYMENT:

Penal charge 2 % of monthly installment or Tk. 200/- (whichever is higher) on overdue amount.

13. REWARD:

Service charge will be refunded to the borrower for timely deposition of each installment & adjustment of loan.

CONSUMER’S CREDIT PRODUCT

SALARY LOAN SCHEME:

This scheme will cover all salaried executives/officers having confirmed / permanent job in any of the following organizations:

1) Government Organizations

2) Semi Government & autonomus bodies

3) Banks, well-established and reputed insurance companies and any other alike financial institutions.

4) Multinational companies, Large NGOs, Aid Agencies, UN Bodies.

5) Large Private organization having corporate structure.

6) Teachers of reputed Universities, Colleges & Schools.

7) Hospitals, Pathology Labs, Air lines, 5 Star Hotel & Restaurants.

Length of service: Minimum 2 (two) years for type A,B,C

Minimum Monthly Salary: TK. 20,000 (Twenty Thousand) Gross.

Loan limit: ranges up to 2.00 Lac but not exceeding 3 (three) times of gross salary.

All other conditions as stated in serial 1 to 13 to be followed.

AUTO LOAN (CAR, AUTO-RICKSHAW, MICRO-BUS, TAXI, PICK-UP VAN ):

FEATURES:

Loan amount ranges from Tk. 1.00 Lac to 10.00 Lac
Debt equity ratio 60:40.( Bank contribution 60% & Client 40%)
Repayment tenure12, 24,36,48 or60 months.
Loan amount excludes insurance, Vat, registration etc.
Option of pre-paying after a minimum of 6 months from loan disbursement.
The car /auto will be registered in joint name where in Standard Bank Ltd. Will be the first party. Customer will bear the insurance charges.
All other conditions as stated in serial 1 to 13 to be followed.

PROFESSIONAL EXPERIENCE OF THE APPLICANT’S

Salaried Executives : 2 years experience, TIN together with IT 10B certificate to be

submitted with the loan application

Self employed Professionals : 3 years experience, TIN together with IT 10B registration, vat

certificate to be submitted with the loan application.

Businessmen : 3 years experience, TIN together with IT 10B Trade license, VAT

certificate etc to be submitted.

Minimum Monthly Income: Tk.30, 000/- per month.

SELF EMPLOYED PROFESSIONAL LOAN:

Self employed professional Loan is a loan facility offered by the Retail Banking Division to facilitate the registered Doctors, Dentists, Pathologists, Engineers, Architects ,Scientists, Chartered accountants who are salaried as well as self employed.
Minimum of 3 years continuos service experience.(Both salaried & self employed)
Age-30 years to 57 years.
Monthly Income- Tk. 15,000/- gross.( Minimum).
Maximum Limit TK. 5.00 Lac.

Maximum loan upto 10 times of gross salary or net income of self-employed.
All other conditions as stated in serial 1 to 13 to be followed.

MARRIAGE LOAN:

Marriage Loan is a personal loan facility offered to executives/officers intend to marry

to incur his/her marriage expenditure or their sons and daughters.

· Limit: Maximum Tk. 2.00 lac.

· Age : 25 years to 57 years.

· All other conditions as stated in serial 1 to 13 to be followed.

No marriage loan will be provided against 2^nd Marry.

HOUSEHOLD DURABLES LOAN:

Household durable loan is a personal loan offered to salaried /self employed persons to make their wishes true for purchasing computer, Refrigerator, A.C., T.V.,Motorcycle,Washing Machine etc.
All other conditions & eligibility as stated in serial 1 to 13 to be followed.
Limit: Minimum Tk. 20000/- Maximum Tk. 1.00 Lac
Product quotation to be obtained.

HOUSE RENOVATION LOAN:

House renovation Loan scheme is a Personal Loan facility offered to salaried/self-employed persons to furnish & renovate their house.
Limit: Maximum: Tk. 4.00 lac. Debt equity ratio 50:50
Applicant must be owner of the land & building.
The house must be situated at Cities.
Age Limit: 30 years to 60 years.
All other conditions as stated in serial 1 to 13 to be followed.

LAND PURCHASE LOAN:

· Land purchase loan scheme is a personal loan facility offered to salaried / self employed

persons to purchase lands in the city areas.

· Limit maximum TK. 10.00 Lac

· Applicant must be purchaser of the land.

· The land will be mortgaged to the Bank as per registration Act.

· Debt equity Ratio 50:50

· All other conditions as stated in serial 1 to 13 to be followed.

SMALL ENTERPRISE FINANCING

Limit 0.50 lac to 10.00 lac

Vast horizon has been opened before Private Commercial Banks for financing SMALL LOANS. According to ADB, in Bangladesh estimated six million SME & micro enterprises firms have a significant role in generating growth & jobs. This is a sector that has its own distinct needs & requires specialized focus. SME contribute25% of GDP & 80% of the industrial jobs of the country. So, SME is now a very lucrative sector of financing for boosting up profitability. We need to be innovative to work efficiently in the field of small enterprises if we are committed to develop our socio-economy .Besides playing a role in poverty alleviation it has also scope in creating “ Enterprise Culture”. Small Enterprise is important area of financing because campared to large industries the Small Enterprise has some inherent advantages. These are :

1. Lower capital investment.

2. Less environmental risk.

3. Creation of micro entrepreneurial talent.

4. More jobs per unit of invested capital.

TARGET GROUP

· SMALL ENTERPRISES refer to those enterprises where goods are produced, recycled, repaired or traded in traditional way, where 10 or less workers are engaged.

· Initially these enterprises will be located within the accessible area to our branches.

· The entrepreneurs should have an existing profitable business or a viable business plan.

PROPOSED PROJECTS:

1. BEE-HATCHARY:

Honey is a very nutritious & potential food product.It has numerous medicinal uses.Every person of all ages must take at least one tea-spoonfull honey everyday. But as honey is a costly item in our country almost no one is habituated to take it regularly at their food item.To boost-up honey production bank will finance in this sector to establish initially to unemployed educated young men & women who are trained in this sector to upgrade their existing capacity in production, marketing & quality development. Bank will also finance some men/women in a locality after completion of training regarding Bee-hatchary for creation of micro entrepreneurial talent & self-employment. Limit Tk. 0.50 Lac to 5 lac .

2. SELF EMPLOYED PROFESSIONAL LOAN:

Self-employed Professional Loan Scheme is a product to extend our hands to finance educated/trained in any technical sector/unemployed who cannot utilize their education & merit for want of money. As such Bank will make some expertise & fulfill our social commitment.Limit Tk. 0.50 Lac to 10 Lac.

3. MUSHROOM PRODUCTION AND MARKETING:

Now-a-days mushroom is taken as a nutritious vegetable & is cultivated in urban/rural areas. We can finance who are engaged in this professions in producing & marketing. Limit TK. 0.50 Lac to 5 Lac .

4. Churi & Immitation JWELLERY :

To finance in Churi & Immitation ornaments factory, we can finance to the entrepreneurs of this sector who are already engaged in this profession. Limit 1.00 lac to 5.00 lac.

5. Weaving:

To finance WEAVERS at localized areas. Limit Tk1.00 lac to 5.00 lac.

6. Varieties Handicrafts:

To finance Varieties Handicrafts who are engaged in this profession at all localities through any branch. Limit Tk. 1.00 lac to Tk.5.00 lac.

7. Hardware & Software servicing :

To finance light engineering in Hardware & Software servicing, Refrigerator, TV, AC, mobile phone etc. servicing to professional. Limit Tk. 50 thousand to Tk. 5.00 lac.

8. Rot Iron :

To finance Rot Iron handicrafts/furniture entrepreneurs to modernize their design at the extend to compute in international & local market.Limit Tk. 1.00 lac to Tk. 5.00 lac.

9. Conventional Wooden Furniture:

To finance small carpenters & small furniture factory.Limit 1.00 lac to 5.00 lac.

10. Bakery/Grocery/Stationary/Fast Food/Hotel/Restaurant:

To finance for upgrading and marketing of products and services. Limit maximum 1.00 Lac.

11. Decorator:

To finance Decorator to upgrade business & quality service in Metropolitan Cities / District Town/Important business centre . Limit Tk.1.00 lac to 3.00 lac.

12. Potteries:

Craftsmanship in this sector has been developed much.We can finance professional personells for producing & marketing.Limit Tk.50,000.00 to 2.00 lac.

13. Ledh Machine Factory : Bank will provide financial assistance to a trained / experienced

individual to established a new factory or to up grade an old one .Limit TK.1 Lac to 5 Lac.

14. Welding Machine/Grill workshop: Bank will provide financial assistance to a trained /

experienced individual to established a new factory or to up grade an old one .Limit TK. 1.00

Lac to 5.00 Lac

REQUIREMENT:

1. Trade License/ Academic Certificate

2. Applicant will be a A/C holder of SBL.

In order to achieve success of the Project of SMALL ENTERPRISE following strategies will be followed:

1. To extend credit facilities to the SMALL ENTERPRISE entrepreneurs.

2. To develop the quality of the SMALL ENTERPRISE products.

3. To develop marketing facilities of the SMALL ENTERPRISE products.

ASSESSMENT OF APPLICANT (SMALL ENTERPRISE)

Trade Licence’s photocopy/ Membership certificate/Academic Certificate
Length of Business and experience.
Present Stock.
Yearly Sales.
Daily Sale’s Record.
Last 6 month Bank statement.
Income assessment by the help of Bank Statement.
Rental Deed( copy of lease agreement).
Minimum Stock.
T&T , Gas , Utility Bill copy.

AGE

Minimum 25 years

Maximum 50 years

Analysis of Applicant profile (Small Enterprise)

Analysis the daily sales record.
Analysis Banking-turnover (Optional).
Analysis Present Stock.
Analysis of profit.
Debt Equity ratio 60:40.
Length of Business.
Area of the Business.

Documents to be required to avail the loan

1. Three copies of passport size photographs.

2. Citizenship / ID from the competent authority.

3. Personal guarantee from at least one person who has acceptability to the bank

4. One undated blank cheque covering full limit for total nonpayment due to be obtained.

5. Undated cheques for equal monthly installments covering full tenure.

6. one undated blank cheque for equivalent to 6 (six) months instalments of nonpayment dues will be obtained.

7. Spouse/ parents Guarantee

8. All charge documents to be executed.

RURAL CREDIT PRODUCTS

Rural credit /loan will be disbursed through our Gopalgonj, Brahmanbaria, Ekuria, Takerhat, & Chowdhuryhat Branches and Branches time to time authoriesd by the Managing Director.

The Products are :

1. Diary, Beef fattening , Goat Farm.

2. Bee Hachery/Harvesting.

3. Fishery in Ponds.

4. Handicrafts.

5. Weaving.

6. Mushroom cultivation

7. Horticulture/Nursery

8. Grocery/Stationary/Shop/Bakery/Pharmacy.

9. Light engineering viz. Radio, T.V., Refrigerator, Computer, Mobile Set servicing.

Target Group

1. Entrepreneurs engaged in above products located within accessible area by our branches.

2. The entrepreneurs should have an existing profitable business or a viable business plan.

3. Educated unemployed young men/women/Trained in a particular sector may be financed if he / she have a viable business/production plan.

Limit:

Tk. 0.50 lac to Tk. 2.00 lac.

Rate of Interest : 16% p.a.

Service Charge : Tk.200/ Flat Rate

AGE:

Minimum 25 years

Maximum 50 years

Debt Equity ratio: 60:40.

Bank contribution 60

Clients contribution 40

Documents to be required to avail the loan

1. Three copies of passport size photographs.

2 Citizenship / ID from the competent authority.

3 One undated blank cheque covering full limit for total nonpayment due to be obtained.

4 Undated cheques for equal monthly installments covering full tenure.

5 One undated blank cheque for equivalent to 6 (six) months instalments of nonpayment dues will be obtained.

6 At least one guarantor acceptable to the Bank

7 Spouse/ parents Guarantee

8 All charge documents to be executed.

Branches will send proposals to Head Office under head “ consumers Credit, Small Enterprise & Rural Financing”.

Success of the scheme entirely depends on proper selection of borrowers and post disbursement intensive follow-up for recovery. The Branch Managers/ Marketing Team must be extremely cautious in selecting borrowers and end use supervision of the loan

Monthly & quarterly statement of the loan disbursed by the branch will be sent to Head Office within 7^th day of the following month under the head “ Consumer Credit & SMALL ENTERPRISE FINANCING “ separately. Any lapses in this regard will be seriously viewed.