CHAPTER-1
OVERVIEW OF INTERNSHIP
1.Introduction:
Bangladesh is a rural country and most of the people live in village. Miximum people of Bangladesh is landless and asset less. My study is in the field of credit policy of Grameen bank with reference rajshahi district parila branch .The economic development of Bangladesh depends on rural development. So, my study is very important is this context.
1.2.Definition of internship program:
Internship training, practical training may be defined as systematic investigation intended add to available knowledge in of firm that I communication and verifiable. Mr. Green gave a definition that, “Standard methods taking for searching knowledge are meant internship.”
Practical training in necessary fir our needs especially to the student of Accounting Information System like us. We only acquire practical knowledge in the classroom of Universities it is trying need to us to acquire practical knowledge regarding in short internship is a method of acquiring knowledge for application is scientific well and find out the actual situation of certain fields. Through internship a student can achieve the ability to find out real problems and can make suitable solutions.
1.3. Objectives of internship program:
The main objectives of internship program are to earn practical expedience about a definite subject. It helps to achieve real knowledge and experience. The purpose of internship tainting is to discover answer to questions through the application of considerable procedures.
I. Identify the problems and put forward recommendations.
II. To gain familiarity with phenomenon of to achieve practical knowledge.
III. To investigate the cause of loss.
IV. To celebrate advancement of the related concern by analyzing accounting ratios.
V. To implement the knowledge of practical training in the practical life.
VI. To know which type or which kind of administrative skill is necessary to conduct the institution.
VII. To innovate new technique of accounting.
VIII. To determine the frequency with which something else.
IX. To accurately the characteristic of a particular individual condition on a group.
1.4 Significance of internship Program in accounting Information System:
Theoretical knowledge is acquired for the purpose of applying is the practical life. Different importance of internship training program in Accounting Information System are-
1. Practice makes a man perfect-truthfulness of such can be achieved practical training
2. It gives the opportunity to know about the present situation of the institution.
3. Review the advancement of the institutions,
4. Expands the span of knowledge.
5. It facilitates thinking about problem of applying theoretical knowledge in the field of action.
6. It plays as important rile for the students of Business Studies and also to copulate their theoretical studies such s student may be service holder or Business person in future.
7. To enact different policies for the over all development of the institutions.
8. Provides the guide about which type of which kind of administrative skill is necessary to conduct the institution.
9. Real experience can be gained can be gained through practical one.
1.5 Objectives of the leaner:
§ To leaner different credit program of Grameen bank.
§ To know the problems of Grameen bank credit policy.
§ To analyze and interpret the credit program of Grameen bank.
§ To measure the operating performance of different micro credit program.
§ How Grameen women benefited by the Grameen bank credit policy?
§ To give recommendation for better performance of Grameen bank.
1.6 Need for the learn:
Credit is a new concept of rural finance. Landless and asset less people are getting benefit from credit of Grameen bank. Grameen bank is facing many problems fir credit distribution. Women are also confronting some problems. My study will show problems of both parties. Therefore, it might be helpful for all of them.
1.7. Limitation of the Internship:
We know that practical training is essential to acquire a complete knowledge, but it is not achieved easily within the short time. That’s why this internship program is not over criticism. There are some shortcomings of internship program from the researcher point of view and enterprise point of view. The following limitations are:
From internee point of view:
§ Time duration: Time duration is short period.
§ Expensive: A good amount of money is incurred to prepare this report, which is not possible to maintain it properly.
§ Experience: lack of pre experience because this program is for the first time to me/us.
§ Questionnaire preparation: questionnaire preparation in the context of selected topic not possible precisely caused by lack of proper knowledge about the topic.
§ Lack of convincing power: It the internee is not able to be comprehend the personnel about what he want to says, resulted that communication would not be better.
# From the enterprise point of view:
- Lack of co-operation of personnel.
- Sufficient information is not provided to the internee in order to maintain enterprises privacy.
- In addition, the present of the enterprise try to avoid the internee in different ways.
1.8 Methodology of the study:
We know that practical training is essential to acquire a complete knowledge. Data have been collected in the following ways.
(a) Primary source
(b) Secondary source
(a)Primary source: The data, which are directly collected field the study field, are called primary data or raw data.
Primary data have been collected under the following methods,
(i) Observation methods
(ii) Interviews
(iii) Questionnaire
I have collected data from the Grameen bank parila branch, Rajshahi.
Outdate of the related department have been collected by interview and
Questionnaire method
(b) Secondary source: I have collected secondary data from the following sources.
(i) The publications of Grameen bank.
(ii) Circular letter and journals.
(iii) Published papers on credit program
(iv) Internet search.
1.8.1. Tools used: In the present study the following tools have been used for data compilation tabulation and test.
(i) Various tables.
(ii) Graphical presentation (bar diagram).
(iii) Line graphs.
CHAPTER-2
BACKGROUND OF GRAMEEN BANK
2.1. Grameen Bank at glance:
History of Establishment : The history of foundation and overall activities of Grameen bank of Bangladesh is at present the largest specialized credit institution in the world. The credit program of the GB was incited by Dr.Yunus a professor of economics university of Chittagong as research project aiming at poverty alleviation bin August 1976 firm “jobra” a village of Chittagong district. It disbursed small size of collateral –free credit among the landless people and successfully recovered 100percent of credit including interest in the scheduled time seeing the excellent performance of recovery rate, Dr.Yunus was able to convince Bangladesh bank to extend the experience of GB project under supervision of Bangladesh bank with financial support in1997GBP started its credit operation in Tangail district as a project of Bangladesh bank (Yunus-1987) .The project operated with excellent rate of recovery with was 98-99% (Yunus-1987) in all the nineteen branches in Tangail region, Grameen bank project received huge grants and soft loans firm may international agencies like IFAD,FORD Foundation, IDA, UNICEF, Etc along with the financial support of central bank and nationalized commercial banks of Bangladesh later on it credit programs in Dhaka ,Rangpur and Patuakhalli districts till early 1983. In September1983, the government of Bangladesh announced “Grameen bank “ ordinance by with the GBP became a scheduled financial institution named “Grameen bank” Finally GB was launched as a specialized bank with group _based micro –credit programs to uplift the rural poor from poverty in 2nd October1983 with an authorized capital of Tk 1oo million and paid –up capital of Tk 30 million. The Grameen bank was declared as a share holding financial institution. Initially 60% and 40%share was show under the ownership of the government of Bangladesh and the poor borrower respectively. The percentage of shares under the ownership of the poor members has been increasing with the expansion of the credit program. It present if is show that member borrowers own 93.28% of the shares and the government owns only the remaining 6.72% share.
2.2. Specialties of Grameen bank:
By nature the commercial banks credit fund and make profit by lending at higher rates of interest relative to the deposit and borrowing rates. The demand and supply of funds in free markets usually determine the rates. Demand and supply of funds, in free market. Usually determine the rates. The demand and supply of funds in free markets usually determine the rates of interest. The GB also maintains this principle of fund accumulation and profit credit ion. The commercial banks of Bangladesh are regulated by the banks companies Act and are obliged to fallow the directions and guidelines of the central band. But the GB is operating under if own ordinance. The Grameen bank, ordinance 1983 and enjoying full autonomy. The commercial bank secure collateral against lending but the GB is lending without any visible collateral unlike other banks, GB do not provide loan to an individual. It forms group of borrowers before loan sanction GB is fundamentally a group –based lending in situation designed especially to work with the rural poor and unlike many other financial institutions if recovers the lending weekly in equal installment with interest. If collects different types of compulsory saving from the group members through which, capital accumulates.
2.3. Goal and objective of Grameen bank:
The goal, which is proclamation by the GB, is poverty alleviation mentioning the credit as the most powerful instrument of engine of development, if has been providing group –based credit facilities to the poorest section of rural society for the creation of self- employment and income generating activities. The objectives, which are spiffed by the GB, are mentioned here: -
(1) To empower the rural poor especially the women who are seriously neglected and ignored, through creation of self-employment opportunities and freedoms of them.
(2) To provide financial services exclusively to the poorest section of rural area which is excluded from the formal credit institutions.
(3) To rescue the poor people from the informal moneylenders who arte exalting them by charging exorbitant rate of interest of credit.
(4) To provide organizational support to the disadvantage people for better use of credit and income as well.
(5) To develop human capital in the rural areas through providing developmental programs regarding education, health, nutrition, disaster management etc.
(6) To mobilize savings as a part of future nope for poor.
(7) To reduce rural unemployment and dependency rat by offering self-employment opportunities. In rural non-farm sector.
Grameen bank has made a guideline consisting of a lot of advises named “Sixteen Decision” as a comprehensive program fir the Socio-economic development of the rural poor. The sixteen decisions are as follows: -
(1) The four principles of the Grameen bank: Discipline, Unity, Courage and Advance in All walks of our live.
(2) We will bring prosperity to our families.
(3) We will not live in dilapidated houses; We will repair our houses and work forwards Constructing new houses.
(4) We will grow vegetables all the year round; we will eat plenty of them and sell the surplus.
(5)During the plantation season, we will plant as many seedlings a possible.
(6) We will plan keep families small. We will minimize our expenditures. We will look after our health.
(7) We will educate our children and ensure that they can pay for their education.
(8) We will always keep children and the enlivenment clean.
(9) We will build and use pit-latrines.
(10) We will drink tube well water, if it is not available, we will boil water or treat it with alum.
(11) We will not take any dowry in our son’s wedding; neither will we give any dowry in our daughter’s wedding. We will keep the center free from the curser of dowry.
(12) We will not inflict injustice on anyone nor will we allow any one to do so.
(13) For higher income we will collectively under-take bigger investment.
(14) We will always be ready to help each other. If anyone is having difficulty. We will help him.
(15) If we learn of any breach of discipline in any center, we will help to restore discipline.
(16) We will introduce physical exercise in our centers; we will take part in all social activities collectively.
Grameen bank has introduced these sixteen decisions to achieve overall uplift of the rural disadvantaged people.
2.4. Organization structure:
2.5 Administrative Hierarchy:
The administrative hierarchy of Grameen bank is shown in the follow in the following diagram
Administrative Hierarchy of Grameen bank
Administrative hierarchy of Grameen bank:
2.6. Expansion and coverage:
The Grameen bank while was inaugurated in small village in 1976 with Us Dollar 27 only, at present stand out as the world’s largest specialized micro institution, the expansion of fund, coverage of geographical area and rural dwellers are mentioned here.
2.6. A Expansion of credit fund:
Up to September 20000 Grameen bank has disbursed a cumulative total of Tk 126.789’40 million credit, which is higher than any other specialized credit program institution credit not only in Bangladesh but in the world.
2.6.B. Geographical coverage:
The geographical coverage of the credit programs of the GB in Bangladesh shown in the following charts:
2.7. Formation of group and center:
The Grameen bank form a group of five members chosen firm five separate households living in the same aria and bearing same, Socio-economic and cultural starters, the entitlement of more that one member firm the dame household in the same group is strictly prohibited. The GB that it considers those individuals who belong to landless or asset less households mentions it only. Who elects a member or the group as the chairman, the GB maintains financial discipline in the group level. The group members undergo a training program for a period of least 7 days. After the completion of the training program, the workers of the GB select the potential groups as well as members for delivering credit.
2.7 credit delivery and recovery Mechanism:
GB does not disburse loan to all the members of a group at a time two persons relatively poorer among the group members, as selected by the GB workers and are give credit for the first time. After the observation of the recovery performance of the first two for a period of 6 to 8 weeks the rest of the member remain in the credit line are considerers in turns. Each member of the group is accountable for the recovery of the loan, in settlements sanctioned to any one of the groups. Similarly responsibility for repayment of any borrower lies of every member of the centers. The chairmen of the groups and centers bear the sole responsibility in this regard.
The first credit Sanctioned to the borrower appears the be a me age amount of Tk 1000 to Tk 3000, the GB deducts Tk 5% during credit delivery’s as group –fund / group tax from, the Sanctioned money and then recovers Tk 24 per thousand as weekly repayment installments of which Tk 22 is the principal and Tk 2 interest. Every borrower is obliged to deposit Tk 5 to GB found as weekly savings with the repayment installments. The amount of weekly installment varies with the sire, of the loan. GB also collects Tk 2 per day from each of the members during the training period. Previously GB used to used to collect many types of contribution as “emergency –fund” children found etc. at present GB recovers it loan and interest with in 46 weeks from the date of delivery In equal installments according to the fixation mentioned above. Previously, the number of installments was 52 if any borrower delays to repay, other members including the leaders of the groups and centers create pressure on him. GB expels the member if she or he foils to repay the duty installments.
2.8 Nature of capital formation:
At present different type of obligatory saving and weekly collection of loan installments from the member borrows and loan from Bangladesh bank and other commercial bank are the main comments of the working capital of GB. GB that started its Banking operation in October 1989 with a total of Tk130 million of which Tk 100 million is authorized and Tk30 million is paid-up capital, at the very early stage, GB received huge amount of grants and confessional loan firm external sources, Till December 1994 it received a total of Tk 31365.30 million as grants and subsidized loan firm foreign as well as domestic sources.
2.9. Manpower Employed:
At present the GB is doing micro-credit business almost in all rural area of Bangladesh except three will district. About 14000 people are employed in the GB activities at present of them than 3000 are officers who are highly educated and are high salaried.
2.10. Extra Benefit:
It is seen firm the above analysis that the government of Bangladesh has signed the entire loan agreements firm foreign source on behalf of rural poverty. If has enjoyed many kinds of extra benefits than many other financial organizations. These benefits include tax relaxation, free-transfer of money thought other commercial band till 1995 grants and interest- free loan soft loan firm foreign and domestic sources, many types of advantage for capital accumulation in the early stage etc.
2.11. Parila poba branch at glance:
- Name of the bank: Grameen bank (Parila poba branch)
- Location: Thana: Poba. Village: Parila
Post: Kharkhari, District: Rajshahi
- Establish of the year: 26 February1989AD
- Branch cord no: 539-0289.
- First date of the credit distribution: 26 February1989AD
- Total center of the branch: 92.
- Name of the manager: A.S.M. AMINUL ISLAM
- Number of the workers of the branch: 10
- Distribution of the Polly phone: 380
- Official mobile number:0171-410484.
CHAPTER-3
THEORETICAL ASCENTS OF CREDIT POLICY
3.1. Definition of credit policy:
Credit policy means lending money to individuals or firms on specific terms relating to interest and repayment. Credit created by commercial banks through loans and discounts granted with or without collateral. The amount of credit so extended is controlled in part by the rediscount rate established by the Federal Reserve Board.
3.2. Major characteristic of credit Policy:
§ Increase social owners.
§ Motivate and encourage poor for savings.
§ Interest rate is controversial.
§ It is totally collateral free.
§ Male and female get preferential treatment.
§ Most programs are group based.
§ Generally weakly installment payment system.
§ Group savings concept.
§ Mortgages must be need.
3.3. Objectives of credit policy:
Main objective:
§ To accelerate economic development of rural people.
§ To participate in poverty alleviation.
§ To earn optimum profit.
Relevant objectives:
§ To make efficient investment of bank fund.
§ To satisfy working capital need of agricultural sectors.
§ To meet working capital need of trading business.
§ To provide financial support to transport and traveling business.
§ To meet working capital need of manufacturing, etc.
§ To provide long-term fund to manufacturing businesses.
3.4.Types of credit policy:
Three majors types of credit policy.
(One the basis of time)
1. Short term credit policy. Example: -Micro credit.
2. Medium term credit policy. Example: - Credit /Loan.
3. Long-term credit policy. Example: Education Loan.
1. Micro credit: Micro credit is the small size of loan, which is found to be an amount of Tk 1000 to Tk 10000, disbursed with the condition of weekly repayment with interest.
2. Credit: Generally lending money to individuals or firms on specific terms relating to interest and repayment.
3. Education loan: It is long-term process and recovery time big. Education loan programmer, in an effort to provide new opportunities for talented children of its borrowers who enroll in medical schools, engineering schools honors and masters degree programmer. Agricultural colleges, textile engineering and other higher education programmers, are eligible to receive financing from this loan window. The loans are intended to cover all expenses incurred by students firm the beginning of their respective courses until completion, including admission fees, course fees, required stationery, food and accommodation and other related necessary expenses.
3.5. Various involve organizations:
Various government and non-government organization playing are increasing role for poverty alleviation through credit program.
a) Government organization:
q Various government Commercial Banks.
q Specialized Bank like Grameen bank, RAKUB.
q Bangladesh Academy for rural development.
q Youth training program.
q Bangladesh small and cottage industries Corporation.
b) Non- Governmental organization
q ASA.
q BRACK
q PROSHIKA
q TMMS.
3.6.Methods of interest calculation:
In the present study, the interest rate changed by the GB has been estimate by using three alternative methods. These are briefly discussed blow:
1) The Average Balance Method: The working formula of this method is:
TAI FBL+LBL
IRAB= --------X100 and ABL= ---------------
ABL 2
Where, IRAB=Interest rate on average balance. TAI=Total amount of interest,
ABL=Average balance of loan, FBL=Fist balance of loan, LBL=Balance of loan.
2) The Effective Rate Method: The working formula of this method is:
2PC
ERI= ------------ X100
A (n+1)
Where, ERI=Effective rate of interest, P=Number of annual Installment,
C= Total interest payment, A=Amount of loan, N= Total number of installments.
3) The Flat Rate Method: The working formula of this method is.
TAI
RI= ------- X100
TAL
Where, RI=Rate of interest, TAI= Total Amount of interest, TAL=Total amount of loan.
3.7. Velocity of credit creation of GB:
The multiplier /velocity of credit creation is defined as the amount by which the GB raises its initial fund through its short term and weekly recovery process. The working formula of the velocity of credit creation is.
n
IC+∑
i
V= --------------- X100
IC
Where, V=velocity of credit creation, X= Amount of credit per week and IC= Amount of initial credit.
CHAPTER-4
CREDIT POLICY PROGRAM OF GB PARILA POBA BRANCH RAJSHAHI
4.1 Introduction:
Generally Credit means lending money to individual’s or firms on specific terms relating to interest and repayment.
Credit is fundamental important function of commercial bank, which determine whether a bank operating successfully revitalizing it position or degenerating day by day.
4.1. Objectives of credit:
v To accelerate economic development of rural people
v To participate in poverty alleviation.
v To earn optimum profit.
v To make efficient in investment of bank fund.
v To meet working capital need of trading business.
v To satisfy working need of any house repair.
v Etc.
4.2. Branch credit program
1. The Basic loan. It used any purpose. Size amount is Tk. 1000 to until Tk10000.
Table-1 : Grameen bank Parila poba branch .
Total the basic loan disbursement form 31.12.01 to 15.12.05 (in Tk. Lack)
| Year | Lending | Recovering |
| 2001 | 194.22 | 85.44 |
| 2002 | 204.42 | 94.33 |
| 2003 | 225.00 | 104.22 |
| 2004 | 284.44 | 115.66 |
| 2005 | 342.80 | 234.74 |
Source: GB Parila, Poba Branch,Ledger
By plotting the given above table, we get the following Multiple Bar & Trend line of Total lone:
Comment: According to trend line, we see that there is more increasing Lend money then Recover. Year 2004-05,Recovering is more then other years. Grameen Bank has increased Lending of the Basic loan.
2. Education loan:
Table-2
Green bank
Parila poba branch Rajshahi
Total Education loan payment firm 31.12.01 to 15.12.05
(in Tk. Thousand)
| Year | Amount of Loan |
| 2000-01 | 14240 |
| 2001-02 | 27760 |
| 2002-03 | 30000 |
| 2003-04 | 13500 |
| 2004-05 | 65050 |
Source: GB Parila, Poba Branch, Ledger
By plotting the given in above Table-2,we get following Bar & trend line:
Comment: According to trend line, we see that education loan is increased year 2004 –2005. But year 2001 & 2003 is not satisfactory.
N.B.:- This loan is not started to Recover. All student is study continue.
3. The housing loan.
Table-3
Grameen bank
Parila poba branch.Rajshih.
Total housing loan: 31.12.01 to 15.12.05
| Year | Lending | Recover |
| 2000-01 | 105000 | 75000 |
| 2001-02 | 125000 | 90000 |
| 2002-03 | 172000 | 86500 |
| 2003-04 | 195000 | 112000 |
| 2004-05 | 201000 | 135000 |
Source: GB Parila, Poba Branch, Ledger
Comment: Above Graphical presentation, we see that year 2003 to 2005 Housing loan is increasing slowly. The difference between Lending and Recovering is more in the year 2002-2003.
4. struggling loan: Branch data is not available because it is new program in the branch.
CHAPTER-5
THE IMPACT OF GRAMEEN BANK ON WOMEN EMPOWERMENT
5.1. Introduction: One of the main objectives of the Grameen bank is to remove the adverse Social- economic position of the rural women and thereby to empower them.
5.2. Self-employment creation:
It is seen that the total borrower could create self-employment opportunity after their enrolment in GB; on the other hand the total respondents could not start any kind of economic activities for their own employment.
5.3. Literacy status:
It is seen that the literacy status of the female borrowers remains almost constant. It has improved in case of respondents after joining the GB.
5.4.Vocational knowledge status:
It is seen that GB’S credit program could not help the borrowers to secure any kind of vocational knowledge to make their earning source easier.
5.5.Freedim in social decision-making:
The impact of the GB on the creation of social freedom for the borrowers is not significant.
5.6. Freedom in political choice:
The freedom in political decision found the women after their joining in the GB. It is seen that indicator remains almost the same before and after their joining in the GB.
5.7. The status of legal right:
It is seen that the impact of the programs of the GB on the legal right of the female borrower is not significant.
5.8. Changes in mental oppressions:
It is seen that mental oppression of female borrows have increased after their joining the GB.
5.7. Brief summary:
Women empowerment is shown as one of the vital objectives of GB and 100% GB borrowers of the sample area are women in the present chapter; the changes of women empowerment in terms of various social-economic and social- political indices.
CHAPTER-6
GRAMEEN BANK : OPERATIONAL PERFORMANCE BRANCH/WHOLE BANK
6.1. Introduction:
Grameen Bank is a bank and it cannot service for long without paying due economic, consideration of its operation social profitably may be the basic goal of GB but accounting profitability is on less important and it should be take in consideration. If any organization fails to generate sufficient after tax profit for its shareholders and for forth growth, its long-run existence may be threatened. Realizing the gravity of the problem attempt has been made in this chapter to evaluate the operational performance.
6.2. Key concepts:
1. Profit and profitability:
The term profit and profitability are not sonorous profitability differs firm profit, because profitability does not reveal how much is earned (gained) rather how efficiently earning are does. Profitability is a relative term (i.e. ratio) whereas profit is an absolute term. The profitability is calculated to measure the operating performance of an enterprise.
2. Working funds:
It includes capital reserve, deposits and borrowing. This working fund figure (WF) represents balance sheet total less contra item.
3. Earning Assets:
The earning assets of a bank include loans and investments. From the viewpoint of income generation, assets of a bank can be grouped into two classes. Earning and Non-earning, loans including investment fall in the first group and remaining items in the assets side of a bank balance sheet fall it’s the second group.
4. Common equity:
It includes total paid up amount of ordinary shares and reserve for undistributed profit.
5. Volume of Business:
Volume of business stands of total advances plus total deposits of a bank on a balance sheet date.
6. Personnel Expenses:
It includes salaries, allowances, etc. it the most significant cost items from the paint of view of management efficiency.
7. Spread: it is the excess of interest income over interest expenses. Thus spread present the different between interest income and interest expenses.
6.3.Analysis and Interpretation Operation Performance.
Table-1
Profitability ratios of Grameen bank during 1992 to 1996
| Year | Net profit as % of EA | Net profit as % of WF | Net profit as % common Equity | Net profit as % VOB | Spread % of common equity | Income as % of expense | Personnel exp as % of Total expenses |
| 1992 | (0.009) | (0.008) | (0.33) | 0.0009 | 298.29 | 99.27 | 50.02 |
| 1993 | 0.10 | 0.80 | 4.79 | 0.08 | 419.06 | 100.73 | 44.07 |
| 1994 | 0.15 | 0.13 | 7.52 | 0.14 | 390.71 | 259.42 | 34.55 |
| 1995 | 0.10 | 0.08 | 4.76 | 0.09 | 270.79 | 100.67 | 31.25 |
| 1996 | 0.11 | 0.10 | 5.57 | 0.12 | 404.99 | 100.67 | 34.56 |
Source: annual report of GB for relevant year / credit facilities for the poorest of the poor: A study on Grameen bank in Bangladesh.
Mohammad Main Uddin, Assistant Professor, department of AIS.RU.
From the above analysis we may conclude that GB profit performance in relation to earning assts was very poor and dissatisfactory. It also suggests that GB could not utilize its earning assets efficiently and effectively. because percentage of earning assets and working fund is very low.
CONCLUSION:
The study suggests that the economic health of GB was weak although its social contribution was too high during the period of review. It could not even generate minimum amount of profit to compensated the opportunity cost of equity funds invested in this organization profit in relation to working fund, volume of business and earning assets also corroborate poor operational performance of GB .The main cause identified in the study is the failure of the bank to control its non-interest expenditure is a vital issue and emphasis on the same can make a significant contribution to wards accounting profit. Moreover, being a service industry, GB’s profitability also depends on efficient use of its productive resource including manpower resource.
CHAPTER-7
MAJOR FINDINGS OF THE STUDY
Chapter-1. My study is the field credit policy of Grameen bank with reference Rajshahi District, Parila poba Branch. In this chapter I had given internship definition, objectives, significance, (objectives and need of the leaner) limitations, methodology of the study as my ability.
Chapter-2. It is seen that GB has established a wide-ranging network of group-based credit program in rural Bangladesh till –2004. GB disbursed a total of Tk 20,846,367,700 (Balance sheet –2004) .The average rate of loan recovery 93% often. The obligations of weekly repayment and saving deposits to GB make the borrowers scope limited to use the full amount of loan for a reasonable period to generable sustainable self –employment and income by the borrowers and their dependents. On the other hand it enhanced GB’s gross profit earning by creation higher velocity of credit creation. From the rapid expansion of GB’s credit program, it can be assumed that there is no problem in demand side. GB given only 8.5% interest on various savings deposit of the borrowers including the share value paid by the borrowers which is calculated on the average balance of saving deposits by borrowers. Also GB fund is depended foreign country loans.
Chapter-3. In this chapter we are given definition the credit and it major characteristics, types (time basis), various involve organization, methods of interest, and velocity of credit creation of GB.
Chapter-4.In this chapter we find that objectives of credit is, to accelerate economic development of rural people and, to earn optimum profit. Basic loan, Year 2002 to 2003 lending increase slowly and 2004 to 2005year lending growth is high. And recovery position is high year 2005also lowest loan recovery year is 2001.
On the other hand, Education loan is quickly high, year 2005and year 2001and 2004 is slow position bar chart is same, also year 2002 and 2003 loan chart position same. But education loan is not recovery because it is long-term process and some year ago it lending process is started.
The housing loan is growth year 2002 to 2004 slowly and recovery position of loan is increase slow motion. Struggling loan (beggar’s loan) Branch data is not available because it is new program.
Chapter-5. A very few of the female borrowers were found to handle the credit on their own. Almost in all cases the borrowers transfer the loan to male members immediately after receiving it. Event in most cases the female borrower could not even apply their opinion regarding the use of credit. As a result the opportunity of self-employment has not been credited for the females member-including the borrowers among the sample households after their joining the GB.
Chapter-6. The poor or negative profitability was due to huge operational expenses like personnel expenses and other current and non –current expenses, which have contributed to this unhealthy profitability position; But GB’s performance should be evaluated through it social contribution which is so high that the same can not be measured Through any statistical tool. Moreover, GB’s management is so dynamic and pragmatic that they have already diver sifted its business. All it sister organization of GB are now highly profitable and from those organizations the management could subside the leading activities if needed.
Other Information of GB (Branch):
q The Basic loan increased Day by day. GB of parila poba branch distribution large amount of money.
q Education loan increased year after year. Now in this time it is not recovery because it is loan terms process.
q Struggle loan in not significant because in this branch the project o struggle loan started current year.
q Housing loan increase slowly
q In this branch member of Polly phone increased quickly. It is good for our communication.
q Interest of the basic loan collected by the right methods.
q Loan distribution program is very good GB Parila Poba Branch, Rajshahi.
q GB Parila Poba Branch, Rajshahi, Transition processing is not good.
q Accounting information system and Management information system to started very quickly because it used tradition approach.
q In this branch computer must be used and computer training given all stuff’s.
CHAPTER-8
Recommendations: To make GB programs effective, some policy prescriptions are suggested here.
- Grameen Bank should lower the interest rate on lending and interest rate should be calculated according to reducing balance method.
- Size of loan must be raised initially at least the Tk15000 in order to fulfill the demand of the borrowers.
- Government should monitor entire of GB funds including the fields of its sister organizations.
- Instead of opening new branches, GB should focus on the existing ones and work interactively in order to eliminate provably drastically.
- GB should provide loan in terms of capital goals and basic vocational training in the initial stage rather that giving loan in cast.
- To archive the objectives of education and Human development, borrower, Households should be given free education loan from the obligatory saving deposit fund of the borrowers in GB.
- Both male and female youth literal and potential person of poor households must be undertaken in to program to make the loan more effective.
- To ensure the ownership of the member borrowers should also be preserved.
- GB should start recovering the loan after six month from disbursement and installment should be monthly, so that the borrowers can have a reasonable time to general some income before starting to repay.
CONCLUSIONS:
From the findings of the study following conclusions can be draw.
- GB has established in the rural areas a strong parallel money market, which is actually usurious type in nature.
- GB could not reduce the dependence of rural poor on informal moneylenders.
- There is no relationship between GB and it borrowers regarding ownership of Grameen Bank.
- The contribution of GB credit in the income generated by the borrower households is negligible.
- Grameen Bank has no significant impact on traditional rural power structure.
- Female borrowers have no significant control over the use of loan.
- The credit program of GB is hardly to education and human development.
- The impact of developmental slogans of GB on the borrower household is in significant. The weekly recovery of GB loan is not significant generated firm the retune of GB credit.