Bangladesh as a developing country has been trying for its overall economic growth. One of the major problems confronting its growth is lack of development of enterprises and potential entrepreneurs who can create more job opportunities by establishing new enterprises in the industrial sector. There are a number of educated unemployed youths and also skilled & semi skilled unemployed persons in the country. Besides, every year quite a good number of youths are coming out of the general/technical educational institutions to add to this already crisis ridden employment market. Development programmes and efforts will bring no meaningful result unless and until income- generating employment opportunities can be created for the growing number of unemployed people including the educated unemployed youths. Establishment and expansion of micro industries can play a vital role in creating more employment opportunities as well as in the overall socio-economic development of the country.
Islami Bank Bangladesh Ltd. has been appreciably participating in this direction by financing industrial sector. With a view to creating wider base for industries, the Bank has decided to launch “Micro Industries Investment Scheme” through its Branches. This scheme has been devised to cater to the investment needs of those persons who intend to set-up new micro industrial ventures or to restructure their old units by way of BMRE involving a total cost of Tk.5.00 lac.
This is intended mainly to create new jobs for the educated, skilled & semi skilled unemployed and also to encourage those who remain outside the purview of investment due to shortage of funds and insufficient collaterals. The scheme has been prepared with easy terms and conditions to encourage the small entrepreneurs, educated unemployed youths and skilled /semi skilled persons to come forward for establishment of micro industries commensurate with the local demand.
Objectives
The
main objectives of the scheme are as follows:
To create income generating employment opportunities through establishment of
new micro industries and BMRE of existing units by providing necessary
investment facilities.
To encourage establishment of micro industries in different areas of the country
by potential entrepreneurs like educated unemployed youths, technically
qualified and skilled /semi skilled persons.
To encourage wage-earners to utilise their hard-earned money in the country by
providing additional investment needs for establishment of micro -industries.
To provide investment facilities for self -employment of the unemployed and
under employed persons having education, knowledge, skill, experience and
initiative to undertake micro industrial enterprises.
Eligibility:
The eligibility criteria for the
selection of the entrepreneurs under the scheme will be as under:
Engineering
diploma or degree holders, or persons having diploma
or certificate from any Technical /Vocational
Training Institutes and willing to set-up micro
industries.
Educated unemployed youths having initiative and knowledge regarding the
proposed industry.
Skilled and semiskilled persons having practical knowledge and experience in
industrial perations.
Persons already engaged in micro-industries as owners and willing for BMRE of
their enterprises.
Wage Earners who want to establish micro industries having work
experience/training in the particular field of industry.
The proposed enterprise must be exclusively owned by Bangladeshi Nationals which
use indigenous raw materials or imported raw materials not exceeding 25% of the
total requirement of raw materials.
Defaulters and persons/enterprises having outstanding liabilities with other
Banks and Financial Institutions will not be eligible for availing investment
under the scheme.
Sectors
of investment:
Different sectors including food
and agriculture based industries, plastic & rubber industries, forestry and
furniture industries, engineering industries, leather industries, chemical
industries, textile industries, recycling industries, service industries,
electrical accessories industries, computer technology industries, paper
products industries, handicrafts industries, fishery & live stock farming,
hollow bricks, roof tiles and any other viable micro-industries have been
identified for financing under the Scheme.
A detailed list of enterprises in each sector is
given at Annexure-A. Any other
item(s)/sector(s) that has not been included in the list but there is scope for
investment, the Branch may approach Head
Office through their respective Zonal Office for inclusion thereof.
Purpose
of Investment:
To procure capital Machinery
To purchase raw materials
To meet a portion of working capital requirement.
While selecting enterprises(s)/project(s) for
financing, Branch must ascertain the market demand of the product of such
enterprise(s)/project(s). Also care should be taken so that local machineries
& raw materials are used to keep cost of the project at a minimum level and
to develop supporting job opportunities.
Bank’s
investment & ceiling thereof:
The extent of Bank’s investment will depend upon
the actual requirement of a particular industry/enterprise, its nature of
production, model & origin of machineries, the working capital requirements
etc. The Branch should ascertain the cost of the project taking into account all
the above issues.
Bank’s investment shall not be more than 60% of the
cost of machineries or 50% of the total cost of the project (both machinery
& working capital), whichever is less, within the maximum total investment
ceiling of TK.5.00 lac per project/enterprise.The client’s equity shall be
calculated taking into account cash investment plus the
cost of the project land & building if owned.
Security
Requirements:
To secure Bank’s investment, collateral security of immovable properties
backed by Irrevocable General Power
of Attorny shall have to be obtained.
In case of technically qualified persons and educated unemployed youths, the
original educational certificates shall have to be deposited with the Bank.
The ownership of machineries/equipments shall remain in the
name of the Bank till full
adjustment of Bank’s dues.
The stock (existing & future) shall remain hypothecated with the Bank till
full adjustment of Bank’s investment.
In case of exceptionally deserving candidates, such as educated, experienced,
sincere, hardworking young-men with good reputation who intend to set-up &
run the industries fulfilling all the terms & conditions except that of
collaterals they may be allowed an investment up to a maximum ceiling of TK.2.00
lac without collateral but on personal guarantee of 2(two) reputable persons
having good financial means and social standing acceptable to the Bank.
Period
of Investment:
Capital
Machinery :
5(five) years including reasonable gestation
period.
Raw Materials
:
One year from the date of 1st disbursement.
Rate
of Return & Rebate:
The Rate of Return will be @ 14%
per annum in case of timely payment 1% rebate shall be allowed.
Risk
Fund:
The client will contribute in
the risk fund @ 2% of the total Bank’s investment for the project/enterprise
at the time of disbursement in order to meet any loss caused by genuine/ and
unforeseen risks & hazards.
Mode
of Investment:
Capital
Machinery : Hire-Purchase Shirkatul Melk (HPSM)
Raw
Materials
: Bai- Muajjal.
Recovery
of Bank’s dues:
The Mode of payment shall be
determined considering the cash flow of the particular project enterprise within
the investment period. The Branch in consultation with the client will determine
the instalment and payment period. However, the following may be considered in
fixing the mode of payment.
a.
Hire Purchase : In monthly/fortnightly/weekly instalment basis.
b.
Bai-Muajjal
: In Lumpsum at the end of the tenure of Investment
In order to encourage regular
payment of Bank’s dues, Branch should encourage instalment payment in both the
modes. This will reduce the risk of overdues & diversion of funds.
Processing
& appraisal of Applications:
Each geographical area has its own development
potentials. The type of micro industrial project(s)/enterprise(s)
most desirable for financing in a particular area to enhance productivity and
income in that given area is not necessarily the same type to be found in
another area.
The project/enterprise proposed to be financed should
be judged taking into account the area of the project, its financial and
economic feasibility, cost & returns and cash flow as well as adequacy
of Rate of Return. Accordingly, in each case the following papers should be
obtained:
Application
in prescribed form duly filled in and signed.
Project Appraisal Form duly filled in and signed.
Projected cash flow statement with all particulars duly signed.
Detailed Credit Report F-167B, duly filled-in and signed.
Information on the above will enable the
Branch to ascertain the viability of the project and to take a decision as to
the extent of to finance required and estimated time required for recovery of
the same.
After scrutiny of the above, application & other
related appraisal documents, the Branches on being satisfied on all aspects of
the project shall send the same to their respective Zonal Head duly recommended
by them. The Zonal Heads shall examine and appraise the proposals and send the
same to Head Office, duly recommended.
Command
Area
Investment under the Scheme shall be made within the
20 Km. radius from the branch.
Sanction
& Disbursement:
Project Investment Department of Head office shall
scrutinise the proposal on the basis of the information furnished and the
recommendation of the Branch and Zonal Office. If the proposal is found suitable
in all respect for making investment, Head Office will issue Sanction Advice to
the Branch. Thereafter, necessary arrangements shall be made by the Branch for
disbursement, only after completion of all the required formalities including
documentation as per Bank’s rules regulations and norms.
Supervision:
Close supervision must be ensured by the branch for
proper implementation of the project and recovery of installments in time. For
this purpose supervisors (technical hands) shall have to be appointed for each
of the designated branches. Initially at the stage of implementation, the
supervisor must visit the project weekly and after implementation at least once
in a month and keep the Branch Manager informed about the position of the
project in detail.
Review
& Evaluation:
Branch must ensure constant and close supervision of
end-use of investment. Close monitoring of
performance of the client and the enterprise is vital for the success of the
Scheme.
The Concerned Branch shall have to evaluate the performance of the investment
and shall send statement to Head Office through their respective Zonal Office.
The Branch Manager shall convene meeting of the investment clients under the
scheme regularly and will discuss problems & prospects with them &
evaluate the performance.
Head Office will conduct periodical inspection to ensure the compliance of rules
and regulations, strict supervision of the projects by the Branch and timely
recovery of installments strictly as per schedule.
Social
Benefits:
The educated unemployed, technically qualified persons skilled and semi skilled
persons will be socially rehabilitated and will get better employment and income
generating opportunities.
Unemployment and its consequent evils will be gradually eliminated from the
society.
Wage-earners will get opportunity to utilise their hard earned money in
productive & profitable enterprises & can settle them-selves within the
country in a peaceful environment with their family members.
Through formation of capital, Micro Industrial Enterprises will be
self-operating units and will generate better and higher income for the target
groups.
The quality of life of these entrepreneurs will improve and it will gradually
develop the socio-economic condition of the country.
List of
Micro Industries
Food
and Agriculture Industries:
Bakery
& Confectionery
,Mills, Oil
Mill,Flour
Mill,Dal
Mill, Chira
Mill,Rice
Mill
,Ice
Factory,Farm,Beef-Fattening,Dairy
(small/medium)
,Poultry,Fish
Farm/Shrimp Culture,Hatchery
(Shrimp and other fishes),
Poultry
Feed/Fish Feed
,Food Products,Lozenge,
Chanachur etc.,Food
Products (Jam,Jelly and other types of fruit processing /canning.).Dried
Fish
,Coconut
Products
,Milk
Processing & Pasteurisation Plant.
Plastic
& Rubber Industries:
Polythene
,Plastic
& Rubber Products
,Rubber
Thread
,PVC
Products
.
Forestry
& Furniture Industries:
Furniture,Wooden
furniture
,Steel
Furniture
,Cane
furniture
,PVC
Furniture, etc.
,Wood
Work
,Saw
Mill,,Nursery.
Engineering
Industries:
Engineering
Workshop (Mech/Automobile Workshop, Welding etc.),Spare
Parts manufacturing,Wire
Nails/Wire, Netting/Nut-Bolts etc.,Filter
,Aluminium
products
,Sanitary
Goods
Leather
Industries:
Leather
Products | 
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