Internship Report On Small and Medium Enterprise Financing of Uttara Bank Limited

In recent days the Small and Medium Enterprise (SME) Financing has become an important area for Commercial Banks in Bangladesh. Uttara Bank-one of the largest and oldest private-sector commercial bank in Bangladesh, with the better experience. 216 branches at home and 600 affiliates worldwide create efficient networking and reach capability. It is most important to mention that, though it is the largest private bank in the Bangladesh but they doing their job totally manually. 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. In the year 2005 the GDP growth in our country was registered at 6.9 per cent. The largest growth came from industrial sector, which is 8.5 per cent. The large-medium and small-scale industry grew by 8.7 per cent and 7.9 percent respectively. Uttara Bank Limited has offer a broad array of innovative financial services to match the specific requirement of the client ranging from large corporate houses, Small and Medium Enterprises (SME) to private individuals. As credit application requires availability adequate information, most of the SMEs do not have adequate information. They do not maintain their financial statement appropriately of the business; even they do not feel the necessity of doing so. That’s why Banks are not getting appropriate information regarding their business and themselves as well. Bangladesh has 47 banks and 29 non-bank financial institutions. As of June, the outstanding SME loans stood at Tk 360,564 crore, which is 20.12 percent of the total loans and advances.
Nearly half of the 30 private commercial banks (PCBs) exhibit poor performance in SME credit disbursement, despite the central bank's continuous efforts to boost it. Thirteen PCBs disbursed less than 5 percent of their total loan portfolios to small and medium enterprises, according to Bangladesh Bank data. The average SME loan portfolio for a PCB is 13.45 percent. First Chapter starts with the Introduction of the Report. Second Chapter includes the Overview of Uttara Bank Limited. Third chapter discusses SME Financing By Uttara Bank Ltd. Fourth Chapter includes Need for Small & Medium Enterprise Development in Bangladesh. Fifth Chapter deals with the Problems of SME Financing. Sixth Chapter ends with Findings, Recommendation & Conclusion. I have finished my report with References, Appendix & Questionnaire. Uttara Bank Limited had been a nationalized bank in the name of Uttara Bank under the Bangladesh Bank (Nationalization) Order 1972, formerly known as the Eastern Banking Corporation Limited which started functioning on & from 28.01.1965. Consequent upon the amendment of Bangladesh Bank (Nationalization) Order 1972, the Uttara Bank was converted into Uttara Bank Limited as a Public Limited Company in the year 1983. The Uttara Bank Limited was incorporated as a banking company on 29.06.1983 & obtained business commencement certificate on 21.08.1983. The bank floated its shares in the year 1984. It has 216 branches all over Bangladesh through which it carries out all its banking activities. The Bank is listed in Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange Ltd. as a listed company for trading of its shares.