Loan Management System for SME Sector of BRAC Bank Limited: A Study on Madaripur Branch

BRAC Bank Limited is a leading commercial bank in Bangladesh, established in 1999 under the Companies Act. It primarily focuses on providing financial services to small and medium enterprises (SMEs) that traditionally have limited access to banking facilities. The bank offers loans ranging from 3 lakh to 1 crore taka to businesses that have been in operation for at least a year and are environmentally friendly. Businesses involved in tobacco are excluded from this loan facility. The bank has a strong SME presence across the country, with 41 zones, 457 offices, and over 2,000 officers dedicated to serving SME clients. By 2021, BRAC Bank had disbursed 471,618 loans worth 291,871 million taka. Loan approval is based on business viability, the entrepreneurs character, and the guarantors ability to repay the loan. BRAC Bank provides two loan repayment options: equal monthly installments with interest, or a lump sum payment at maturity. The banks customer relations officers actively seek potential clients through door-to-door visits, evaluating both the business operations and the entrepreneurs trustworthiness. While BRAC Bank can offer up to 100% of the net required working capital, it limits loans to no more than 75% of the inventory and accounts receivable value. The Asset Operation Department oversees the loan process, ensuring proper disbursement and monitoring borrower activities. To maintain its competitive edge, the bank leverages technology for faster service and aims to provide more collateral-free loans, with customer satisfaction remaining high due to these efficient services.