Abdullah Mamun

BRAC Bank aims to adopt all global standards in terms of services and product delivery. At the same time the bank wants to be a flag bearer of the country.

"We all are working hard to fulfill the ambition. We want to be a bank for all Bangladeshis,” said Syed Mahbubur Rahman, the chief executive officer of the bank.

“To bring more convenience to the banking services, we customise the products. We don't want to be more supply driven than demand driven. We want to make the bank more automated,” he said.

BRAC Bank has created a different dimension in the banking sector of Bangladesh. From the very early days its main focus has been on SME (small and medium enterprise) banking, when the commercial banks and the microfinance institutions were looking for the top-tier customers and the people at the bottom of the pyramid. But there was no room for the middle-income people. BRAC Bank appeared in the scene with its new vision of SME banking, the CEO said.

Rahman, who has been working for the bank for the last three years, said: “Though we have similar services, our loan portfolio is above 50 percent for SMEs, while the total loan is more than Tk 8,000 crore."

The average loan figure is Tk 5 lakh to Tk 6 lakh. And more than 90 percent of these loans are collateral-free.

The outreach is much higher and distribution network is wider; almost 40 percent branches are in the rural areas.

In the last 10 years, BRAC Bank provided loans to almost 3.75 lakh people, and the total disbursement is almost Tk 200 crore. Direct employment is more than a million while indirect job creation should be even higher. It has a very widespread distribution network with a field force of 16,000 to 18,000 people, according to the MD.

Isn't SME banking a risky business? The MD said yes. “At the same time, it is less risky too,” he said, adding that small borrowers are more committed than the big shots.

But due to natural calamity, sometimes the bank faces problems too.

“We are focusing on value-based banking,” said Rahman.

He also talked about three Ps -- planet, people and profit.

If one can protect the planet and people then definitely profit will flow through.

The bank is also a member of the Global Alliance for Banking on Values, an independent network of banks using finance to deliver sustainable development for unserved people, communities and the environment. There are 13 banks within the alliance.

BRAC Bank management believes in sustainability in the long run, he said.

"We should not do anything that affects our planet or people," he said.

The bank has introduced solar panels in its 22 branches, out of a total 421. It plans to bring all the branches under solar energy.

There is a desk set up to deal with renewable energy issues such as financing. The bank has introduced "planet cards" to promote green investment.

“We are very robust in terms of using technology. You can transfer your money from home, if you have internet connectivity. The service will be more flexible when mobile financial services will be introduced,” he said.

“We want to take part in the financial inclusion of people. Mobile banking is one of the means to reach the goal. About 80 percent of the people are still out of banking services. And mobile banking can help us reach the objective,” Rahman said.

He said the bank is going to launch mobile financing service styled 'bKash.'

"It's almost done. We have signed agreement with Robi Axiata, and are in talks with the other operators. By the third week of July the service will be launched," Rahman said.

Now the bank has 12 lakh clients and its aim is to take mobile banking services to seven crore users in the next 10 years.

M-banking would create a money saving culture in the country, the CEO said.

The bank has already introduced e-commerce for the people who have debit or credit cards. It is effective for the purposes such as ticket booking or hotel booking, but there are still a lot of problems for online shopping.

The bank is also connected with 13 local banks by a program, Omnibus, a network of 700 points.

Also, as many as 11 banks can do transactions in between by a program, Eldorado.

Rahman also talked about the overall economic situation of the country. He said the falling remittance growth, rising commodity prices in international market, machinery and fuel import for rental power plants, and higher import are impacting foreign exchange reserve, he said.

The government has already planned to borrow $1 billion from the International Monetary Fund in the face of a tight forex reserve.

"But I think we need to find innovative ways to overcome the crisis. Instead of borrowing -- for example -- the government can consider encouraging the NRBs (non-resident Bangladeshis) to send money through regular, legal channels."

If the government provides Tk 1 incentive for per dollar remittance sent home by the NRBs, and if that results into a mere 10 percent rise in remittance flow through the legal channel, the country would have $12 billion from existing $11 billion a year, he points out.

abdullah.mamun@thedailystar.net                                                                                                                                 News: The Daily Star/Bangladesh/ July-04-2011