The Asian Development Bank (ADB) is likely to provide concessional loan for capital market development in 2012 under its ‘Country Operations Business Plan for Bangladesh, 2011-2013’. “Such projects are in line with ADB’s long-term strategic framework (Strategy 2020), through which ADB commits to work with the private sector to generate greater economic growth in Asia and the Pacific,” said Bart W Édes, Director, Poverty Reduction, Gender and Social Development Division, Regional and Sustainable Development Department of ADB in Manila.
The ADB director made the observation in an interview with UNB through e-mail. He also described in details the prospects and obstacles of social enterprise in Bangladesh as well as the ADB’s future plan regarding the issue ahead of the Financing of Social Enterprise Forum to be held in Dhaka.
The daylong “Impact Forum for Social Change” will be jointly organized by Asian Development Bank (ADB) and Impact Investment Exchange Asia (IIX Asia) on January 10 (Monday) at Sonargaon Hotel in the capital.
Around 60 participants from the government, development agencies, social enterprises, and impact investors, as well as experts in capital market development and resource mobilization are expected to attend the forum. Asked about the main obstacles to develop social enterprises in Bangladesh, Edes said the challenges confronting social enterprises in Bangladesh are similar to those facing social enterprises operating in other developing countries in Asia and the Pacific. One is finding people with the right business and management skills.
Those who are attracted to the social mission of such an enterprise may not have the right training and experience to help it thrive in a market setting, he said.
“Without knowledge of how to run a business, a social enterprise will have difficulty planning, managing human resources, handling finances, and, more fundamentally, creating a viable business model.”
The ADB official observed that another major problem is a lack of capital. Social enterprises can often pull together enough financing from friends and family to get started, and generate sufficient sales to reach a modest scale of operations. Yet they often find that they cannot expand further due to a lack of additional resources.
Asked about the ADB’s role in supporting development of social enterprises in future in Bangladesh, he said that although ADB does not have a specific initiative supporting social enterprises in the country, it has financed projects that contribute to the development of micro-to-medium sized enterprises that generate employment and create livelihood opportunities. He said that two ADB-financed participatory livestock projects have enabled more than 660,000 poor people (91 per cent of them women) to improve their livelihoods through access to small loans and technical support.
Similarly, the Northwest Crop Diversification Project, implemented in partnership with NGOs and Rajshahi Krishi Unnayan Bank, has helped marginal farmers develop high value crop production and improve their marketing.
Answering a question, Edes said that ADB is supporting a regional technical assistance project that will analyze the context and funding options for social enterprises in a selection of developing Asian countries, including Bangladesh, India, and Thailand.
To a question on whether the ADB is planning to help any social enterprises like Prof. Muhammad Yunus’ Grameen Bank or others, he said that Professor Yunus has had tremendous success in building up social enterprises. His experiences are certainly instructive for other social entrepreneurs in Bangladesh and elsewhere, even if few have achieved the impact of Grameen Bank.
About the expected results from the Impact Forum for Social Change, the ADB official hoped that the forum will boost awareness of the valuable role that social enterprises already play in Bangladesh and elsewhere in Asia, and the much greater role that they could play given the right circumstances.
He said participants will also learn about the Impact Investment Exchange, Asia’s first social stock exchange, and its potential to raise capital to promote sustainable growth and greater impact among social enterprises in the region.     UNB

Source: The Independent/ Bangladesh/ Jan-07-2011

Sajjadur Rahman

Management efficiency, use of technology and reduction in bad loans helped banks minimise their operating costs in the past decade.

Private banks and foreign commercial banks operating here were more efficient in managing their expenditure than the state-owned commercial and specialised banks, a central bank report shows.

The report found that a Private bank spent 93.1 percent of its income in 2003. Such expenditure was 69.6 percent in June 2010, down by over 25 percent between the periods.

The foreign banks have minimised the costs by 21 percent, state-commercial by 19 percent and specialised banks by only 4 percent between 2003 and 2010, according to the draft annual report of Bangladesh Bank (BB).

The cost-income ratio is a key financial measure, particularly for valuing a bank. It shows a bank's expenditure in relation to its income. It is useful to measure how costs are changing compared to income -- for example, if a bank's interest income is rising but costs are going up at a higher rate, it may not be good for the bank.

The Bangladeshi banks have long been blamed for poor efficiency, which pushed their costs up. It also increases the borrowing costs.

Bankers credited young professionals, use of technology and declining bad loans for a significant fall in costs in the just-concluded decade.

“Young generations are bright and their productivity is higher than their older colleagues,” said Shahjahan Bhuiyan, managing director of United Commercial Bank, who has nearly four decades of experiences in the banking industry.

Bhuiyan also attributed the success to the falling non-performing loans (NPL).

BB data shows that the average NPL for the banking sector was 17.6 percent of their total loans in 2004, which came down to 8.7 percent at the end of June 2010. The private and foreign banks are the best performers in terms of controlling bad loans with only 3.7 percent and 2.4 percent respectively as of June 2010. The NPL was nearly 23 percent for the state banks.

“The banks are heavily investing in technology, which ultimately helps us with efficiency enhancement and managing the costs,” said Anis A Khan, managing director and chief executive officer of Mutual Trust Bank.

According to Khan, the main reason behind the fall in the expenditure-income ratio was a tremendous growth in the banks' profit.

sajjad@thedailystar.net                                                                        Source: The Daily Star/ Bangladesh/ Jan-7-2011

Bangladesh Bank (BB) Governor Dr Atiur Rahman said the central bank would provide cooperation and support to the commercial banks if they ensured transparency and took step against irregularities in a bid to establish discipline in the banking sector.

“We assure the banks of providing all-out supports and cooperation if they ensure transparency in their activities and take steps against irregu-larities,” BB Governor said at a seminar yesterday.

He also urged the banks to sustain the growth they have achieved in the last year.

Bangladesh Bank organised the seminar on ‘Financial Crises and Regulatory Deficiency’ at its conference hall.

Former governor of the central bank AKN Ahmed presented the keynote paper at the seminar.

AKN Ahmed said the central bank would not only work independently but also maintain a mutual relation with the government to effectively run its business.

Urging the government for lessening dependency on IMF and World Bank, former BB chief suggested the developing countries to brace themselves to handle financial crisis on their own either unilaterally or collectively by making regional groupings between the countries having similar problems.

He also said the central banks of the developing countries should tune their monetary policies to the needs of the country’s overall development policy.

AKN Ahmed, however, said developing countries should give up their dependency syndrome but not their ongoing dialogues with IMF and the World Bank which, for poor countries, remained the principal source of financial aid on soft terms and technical advice in many areas.

No country could hide from globalisation now, he said observing that globilisation induced growth but growth was not globalised.

In his paper, former governor drew an elaborate analysis on financial crises and regulatory deficiency around the world with a background of the problem by citing cases of different countries.

Dr Atiur Rahman said the paper is a gist of knowledge AKN Ahmed acquired throughout his life and it could play a significant role in helping the officials of central bank in handling financial crisis efficiently.

The officers working in deferent units of Bangladesh Bank attended the seminar.

Source: Daily Sun/ Bangladesh/ Jan-7-2011

The Institute of Chart-ered Accountants of Bangladesh (ICAB) awarded Eastern Bank Limited (EBL) has received for its annual report for the year 2009.

EBL was awarded the second prize at the 10th ICAB National Awards for the best published accounts and reports which was held in the city recently, said a press release.

Ali Reza Iftekhar, Managing Director and CEO of EBL received the ICAB award from Finance Minister AMA Muhith.

Source: Daily Sun/ Bangladesh/ Jan-7-2011

Bank Asia opened its 49th branch at Jagannathpur, unamganj from on Thursday.

Mohd Safwan Choud-hury, Vice Chairman of the bank inaugurated the branch. Erfanuddin Ahmed, president and managing director of the bank was present on the occasion, said a press release.

Members of the business community, local elite and a large number of people also attended the function. The branch of the bank has all the modern banking facilities including on-line banking and ATM.

Starting its operation in 1999, Bank Asia is one of the most innovative banks in the country’s banking sector, Mohd Safwan Choudhury said adding that the bank offers a wide range of financial services that covers the entire spectrum of banking operations.

In addition, it has launched Islami banking, brokerage, SME banking, SMS banking, ATM and internet banking under its online platform to deliver the highest standard of service to its clientele, ably supported by the use of state-of-the-art technology, he added.

In addition to 49 branches, there are 10 SME Service Centres and 1 SME/Krishi Branch of the bank

Source: Daily Sun/ Bangladesh/ Jan-7-2011