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Dhaka Tribune

National Bank Ltd creating new entrepreneurs with their SME program

Md Shahidul Islam, EVP and division head CRM (MSME) of NBL, speaks to Dhaka Tribune's Meraj Mavis about their current status and future goals

Update : 08 Nov 2023, 10:49 AM

How is National Bank maintaining customer trust? What steps have been taken regarding the loan portfolio?

National Bank Limited was established in 1983 as the first private sector bank fully owned by Bangladeshi entrepreneurs.

Since then we have been working on the trust of the customers. No one can say that they have a problem withdrawing money from a deposit.

Now our branches are spread all over the country. There are currently 221 branches, 38 sub-branches, 2 inside the country and 4 subsidiaries outside the country.

National Bank has more than 2 million depositors and about 100,000 borrowers.

Currently, National Bank is giving utmost importance to CMSME sector.

After the arrival of the new MD, the customer relationship management (CRM) division has been restructured into 5 separate divisions. I am in the micro, small, and medium enterprise (MSME) sector. Currently, the number of direct customers of the bank in this sector is about 12,000, which is increasing each day. The loan portfolio is Tk7,500 crore, or 18% of the total.

Tell us about National Bank's plans in the smart banking sector.

As I said before, CMSME is our priority, to bring the total process of SME loans, from loan application to loan disbursement, monitoring, and recovery, to the digital platform. On one hand it will save time, and on the other, it will reduce the use of paper, which is good for the environment. This is sustainable banking.

But we will go through this digital banking up to a certain extent. NBL has already developed a few IT modules to cater to the needs of CMSME customers and discussions are ongoing with various fintech companies to conduct business on digital infrastructure.

By 2024, we are targeting a minimum 25% share in SME banking across both digital and conventional banking. Out of this 25%, we want to bring the share of women entrepreneurs to 15%, since Bangladesh has more women than men.

However, now National Bank's branch heads and seven regional heads have been empowered to approve a certain amount of loans, thereby making loan disbursement, monitoring and collection easier and more efficient.

But we want to bring it to a digital platform which will make the whole process more transparent and faster.

Is there any other change needed in the Bangladesh CMSME sector besides digitization?

According to the National Economic Survey March 2023, the total debt status of Bangladesh is Tk1,472,611 crore, out of which the CMSME sector has Tk283,236 crore with a rate of 19.23%.

But to take it further, Bangladesh Bank has taken several steps which are encouraging banks like us to distribute loans in this sector.

We need to change our thinking about the CMSME sector a bit. I think it is time to raise the ceiling that was fixed earlier by Bangladesh Bank. Besides, it is important to bring change in some other places. Now it is only funded. Making it non-funded would make opening LCs much easier for small businesses. Then I believe our import sector will not be held captive by only a few big companies.

How is SME banking playing a role in creating employment?

Education rate is gradually increasing in the country, but employment is not being created in that proportion. But at one time the goal of our educated population was to get a job. Our education system does not encourage entrepreneurship even from families. That is changing somewhat.

But by providing loans to CMSMEs in the banking sector, new entrepreneurs are being created in the country which is playing a helpful role in increasing employment.

As a result, entrepreneurs in the CMSME sector are ensuring their own employment as well as employment for others.

Are you satisfied by the success of your organization's SME financing in creating entrepreneurs?

We have been successful so far in creating entrepreneurs but I am not completely satisfied.

We are planning to train entrepreneurs in certain areas in collaboration with Bangladesh Bank and SME Foundation.

Besides, we are conducting awareness campaigns and marketing activities through our extensive network and digital platforms.

We have also undertaken activities on creating entrepreneurs through digital training in remote areas of the country.

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