1.

Introduction: 1.1. Origin of the report:

This report is prepared with the respect to the course of Business Finance (FIN201). We are assigned to prepare a term paper by our honorable course instructor Ms. Sarahat Salma Chowdhury. Our task is to choose three commercial banks which are Brac Bank, Prime Bank and Dhaka Bank; and three trading organizations in fabrics industry of Islampur, Dhaka and to collect information about bank loans and trade credit from those wholesale/retail businesses. We also need to find the Effective Annual Rate of these banks and business organizations and compare the EAR between the bank loans and trade credit. 1.2 Objective of the Report:

This report has been prepared considering a number of objectives. The objectives are: To apply our knowledge that we have gathered from Business Finance

course into the report To provide the overview of three banks and the business organizaions. To measure the Effective Annual Rate of those three bank loans and trade

credit of the business organizations To compare the Effective Annual Rate of bank loan and trade credit and give recommendation. 1.3 Scope: The term paper is made on the basis of the information about bank loans, trade credit and the Effective Annual Rate. This is focused on calculating and comparing the EAR and shows the findings about the bank loans and trade credit.

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1.4. Methodology: Data collection method: Both primary and secondary data is used to complete the study. We used face to face communication and other secondary sources to make this report properly. 1.4.1 Primary sources: Primary sources are the individual business owners whom we talked face to face to get information about trade credit and their products. We have used convenient sampling to collect the information. We also have interviewed some employees to get the actual information. 1.4.2 Secondary Sources: Secondary information was collected from books and the official web sites of Brac Bank, Prime Bank and Dhaka Bank. Statistical techniques were used to analyze the collected data. 1.5 Limitations: This report is not free from limitations. Moreover the topic is so much vast, so we faced some problems while preparing this report. The limitations acquainted with this report are as the following. Collecting previous information was little bit tough. All the information may not be 100% accurate All people whom we interviewed may not say about the actual fact. Technical Problems Time shortage Websites are not up to date enriched.

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2. Report Preview: This report is based on the information that we got from interviewed in Fabrics enterprises, also the information that have been collected from internet and books. The report shows the calculation of EAR of the loans that are available and the trade credit which are generally occurred in monthly business.

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Background of the Bank:

3.1 Brac bank BRAC Bank is the youngest private commercial bank in Bangladesh. It received the license from Bangladesh Bank in 2001. The bank is partially owned by BRAC, the largest non-government organization in the world, International Finance Corporation, the private sector arm of The World Bank Group and Shore Cap International. BRAC Bank Limited was established under the Banking Company Act, 1991 and incorporated as a public company limited by shares on May 20, 1999 under the Companies Act 1994 in Bangladesh. The banks has started its operation on 4th of July 2001 with a vision to be the market leader through providing all kinds of banking services suitable to the dynamic demands of both business and individual in the competitive market. Though BRAC Bank was formed with the aim to serve the millions of small and medium enterprises (SMEs) in the country, having pioneered the concept of SME financing in Bangladesh, it is the fourth largest SME bank globally. The company also provides services within corporate and institutional banking, retail banking, as well as probashi banking, which specifically caters to non-resident Bangladeshis abroad. Other areas include customized treasury and foreign exchange solutions, and custody services. It ranks amongst the top banks nationally that processes remittances from abroad. The bank focused on relationship based Banking, as it believes that the pursuit of profit and developmental goals are mutually reinforcing. This focus makes the bank to emphasize more on to explore and access market opportunities as well as build asset base to its clients conforming significant contribution to the profitability of the Bank. BRAC Bank has 100 Branches, 60 SME Service Centers, 3 SME/Krishi Branches, more than 300 ATMs and 424 SME Unit offices across the country. It has disbursed over BDT 10,000 crores of SME loan and has over 500,000 individual customers who access online banking facilities. 4|Page

Company Profile: BRAC BANK

Basic Information Company Name Business Type Product/service : : : Brac Bank Banking and Financing Short term loans, account service, deposit

schemes etc Address Year Established Company Websites Ownership type Business Chairman : : : : : 1, Gulshan Avenue, Gulshan, Dhaka 4th July, 2001 www.bracbank.com Private Corporation Mr. Muhammad A. (Rumee) Ali

Stock Market Information

Listed in Dhaka Stock Exchange Market category Authorized Capital Paid up Capital Earning Per Share (2010) Dividend (2010) Corporate vision: Building profitable and socially responsible financial institution focused on Market and Business with Growth potential, thereby assisting BRAC and stakeholders to build a just, enlightened, healthy democratic and poverty free Bangladesh. 5|Page : : : : : : 2007 A 4800 Million 3212 Million 68.17 20%

Corporate Mission: Sustained growth in Small & Medium Enterprise sector Continuous low-cost deposit Growth with controlled growth in retail assets. Corporate Assets to be funded through self-liability mobilization. Growth in Assets through syndications and investment in faster growing sectors. Continuous endeavor to increase non-funded income Keep our debt charges at 2% to maintain a steady profitable growth Achieve efficient synergies between the banks branches, SME unit offices and BRAC field offices for delivery of remittance and Banks other products and services Manage various lines of business in a full controlled environment with no compromise on service quality Keep a divers, far flung team fully controlled environment with no compromise on service quality Keep a diverse, far flung team fully motivated and driven towards materializing the banks vision into reality

3.2 ORGANIZATIONAL STRUCTURE: The Head office of this bank is situated at Gulshan Avenue in Dhaka. BUSINESS DIVISION:

SME Banking Corporate & Institutional Banking Retail Banking Banking Services for Non-Resident Bangladeshi (NRB)

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3.3 Products:
BRAC Bank has a variety of retail banking products for consumers. Loans, Deposit Schemes, Account Service, Cards, and Other Service are provided to customers. 3.3.1 Deposit Products:

With 151 outlets, 250 ATMs and over 500,000 plastics in the market, BRAC Bank offers you a wide range of financial solutions to meet your everyday need. Saving Accounts: Triple Benefits Savings Account Triple Benefits Savings Account offers a high interest rate of up to 8.5% p.a. Interest is credited to the account every month on average monthly balance. The minimum account opening balance requirement is BDT 50,000. Savings Classic Account Savings Classic Account offers interest rate up to 8.5% p.a. The minimum account opening balance requirement is BDT 15,000. Monthly minimum balance of BDT 50,000 & above will be eligible for interest. Half Yearly Account Maintenance fee is BDT 300 + VAT if half yearly average balance is above BDT 25,000 and BDT 100 + VAT if half yearly average balance is above BDT 5,000 to BDT 25,000. Annual Debit Card Fee is BDT 600 + VAT. The account offers free first cheque book of 12 pages. Aporajita Account Aporajita Account is a savings account for female customers, which offers interest rate up to 8.5% p.a. Interest is credited to the account every month on day end balance. The minimum account opening balance requirement is BDT 5,000. Any day end balance of BDT 50,000 & above will be eligible for interest. There is no Yearly / Half Yearly Account Maintenance Fee. Annual

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Debit Card Fee is BDT 600 + VAT. This is a non cheque book account, however, a guest can avail special cheque book as per Schedule of Charges. Future Star Account Future Star Account is a savings account for minor that offers an opportunity to save for your childs future. The account is available for the children below 18 years of age. However, legal guardian of the child will operate the account on behalf of the minor. Fund cannot be withdrawn until the child reaches 18 years of age. However, on emergency case, fund can be withdrawn by closing the account. In this case, if the account is closed before one year, interest amount shall be forfeited. Only self-deposited amount will be paid to the account holder. Current Accounts: Current Classic Account Current Classic Account is a non interest-bearing account with cheque book & VISA Debit card facility. The minimum account opening balance requirement is BDT 15,000. The account has a maintenance fee of BDT 500 + VAT for every half year and Annual Debit Card Fee is BDT 600 + VAT. The account comes with a 12 page cheque book free Current Plus Account There is no Annual Debit Card Fee, if yearly average balance BDT 25,000 or above is maintained, otherwise BDT 600+VAT will be charged on anniversary. The account has a Half-Yearly Account Maintenance Fee of BDT 500 + VAT. However, the fee will be waived if the account maintains an average balance of Taka 25,000 or above for the last six months. The account comes with a 25 pages first cheque book for free. There is no intercity transaction fee for this account. The minimum account opening balance requirement is BDT 25,000.

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Salary Account: Salary Account is a non-cheque book individual account for employees of different Corporate Houses, offered to facilitate the disbursements of their monthly salaries. Employees of MNC/LLC/MID CORP/NGO/Large proprietorship/Partnership firm, other than foreign nationals are eligible to open this account. Interest rate for Salary Account is 4% p.a. Any balance greater than zero will be eligible for interest. Interest calculation will be based on Daily Balance and Interest payment will be made half yearly. There is no Annual Account Maintenance Fee in Salary Account. Annual Debit Card Fees is BDT 300 + VAT. Cheque Book facility is also available for this account. Campus Account Campus Account is an interest-bearing current account exclusively offered for university students with an interest rate of 4% p.a. The minimum account opening balance requirement is BDT 2,000. Any balance greater than zero will be eligible for interest. There is no Annual Account Maintenance Fee. Annual Debit Card Fee is BDT 600 + VAT. Term Deposits: DPS BRAC Bank provides the Deposit Premium Scheme (DPS) a truly special savings plan that allows saving on a monthly basis and getting a handsome amount at maturity in a range of options for both installment size and maturity. The monthly installment can be as low as BDT 500 or any multiples of it i.e. BDT 1,000, BDT 2,500, BDT 5,000 and so on. Fixed Deposit general Fixed Deposit General is a non-transactional account that gives interest and principal at maturity. Minimum amount required to open the General FD account is BDT 50,000. FD General can be opened for 1/3/6/12/24/36 9|Page

months. Interest is paid on maturity, calculated on 360 days, as per the Interest Rate Matrix. This account is available on a roll over basis until the customer confirms its closure. 10% Government Tax shall apply to the interest amount. 3.3.2 Loan Products:

Salary Loan Loan amount is up to BDT 1000,000 and Loan up to 18 times of the salary. No collateral of cash securities is needed which also provides Flexible repayment Equal Monthly Installments (EMIs) over a period of 12 months to 60 months. Person with salary account with BRAC Bank will enjoy 1% less than the prevailing interest rate Quick Loan Quick loan is specially designed just to cater the needs of businessman or self employed personnel. It features Loan amount up to BDT 1000,000 with attractive interest rate. No collateral of cash securities is needed. It also provides Flexible repayment Equal Monthly Installments (EMIs) over a period of 12 months to 60 months. Processing fee is 1.5% +VAT of the loan amount. Auto Loan Whether someone wants to purchase a brand new car or a reconditioned one, BRAC Bank Auto Loan is built for maximum speed and efficiency. It offers up to 50% of quoted value of the car and Loan Amount: Up to BDT 2,000,000 with Tenor of 12 to 60 months. Processing Fee is 1.0% of Loan Amount. The loan is for brand new and reconditioned cars. Minimum Monthly Income: BDT 25,000 (for salaried); BDT 35,000 (for others) is required.

Home Loan 10 | P a g e

Apon Ghar (Own Home) is the Home Loan product from Brac Bank with a difference. It is not just a loan, rather a complete solution stretching with five values added FREE services. Loan up to BDT 15 Lac is @ 2% on loan amount + VAT. Loan above BDT 15 Lac is @ 1.5% on loan amount + VAT. Security replacement Fee BDT 10,000 + VAT and Quotation change Fee is BDT 1,000 + VAT. Secured Loan Secured Loan Term Loan time period 12 to 60 months to be Paid in Equal monthly installments. Any individual with fixed deposits and WEDB purchased from Brac Bank Ltd may apply for this facility. 3.3.3 Foreign Exchange & Related Services

Travel Related Services Travel Related Services deals with the sale of AMEX Travelers Cheques (TC) and Cash FCY against Individuals Travel Quota and Medical File. This entitlement is for a Calendar Year i.e. from 1st January to 31st December. USD 1500 or equivalent for SAARC Countries & Myanmar for and USD 5000 or equivalent for Non SAARC Countries is maximum usage. Education Related Service BRAC Bank ERS offers 'Student File' services which eases educational related financial transactions abroad. Student File opening is a mandatory requirement set by Bangladesh Bank for Foreign Exchange transfer to other countries. Through opening Student File, educational related expenses can be remitted abroad. Students who have taken admission in regular courses such as undergraduate, post graduate, language course pre-requisite to bachelor degree & professional diploma/ certificate courses in recognized institutions abroad.

Background of the Bank:

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4.1 Prime Bank Prime Bank Limited is a private commercial bank in Bangladesh. It was established on April 17, 1995. It is now one of the banks in Bangladesh which follows international standard in Banking and Finance. The sponsors are reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile and finance to energy etc. Prime Bank offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software. As a fully licensed commercial bank, Prime Bank is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and it repositions itself in the changed market condition. Prime Bank has already made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country through internationally accepted CAMELS rating. The bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation. Prime Bank, since its beginning has attached more importance in technology integration. In order to retain competitive edge, investment in technology is always a top agenda and under constant focus. Keeping the network within a reasonable limit, our strategy is to serve the customers through capacity building across multi-delivery channels. Our past performance gives an indication of our strength. We are better placed and poised to take our customers through fast changing times and enable them compete more effectively in the market they operate.

Company Profile: Prime BANK

Basic Information 12 | P a g e

Company Name Business Type Product/service

: : :

Prime Bank Banking and Financing Deposits, Loans, Debit cards, Credit cards etc Address : Adamjee Court Annex Motijheel, Dhaka

building-2, 119-120, Year Established Company Websites Ownership type Business Chairman : : : : April 17, 1995

http://www.primebank.com.bd Private Corporation

Mohammad Aminul Haque

Stock Market Information

Listed in Dhaka Stock Exchange Market category Authorized Capital Paid up Capital Earning Per Share (2010) Dividend (2010) Corporate Vision: To be the most efficient Bank in terms of customer service profitability and technology application, capital adequacy, asset quality, sound management and profitability having strong liquidity Corporate Mission : : : : : : 2000 A 10000 Million 7798 Million 6.90 5%, 35%B

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To build Prime Bank Limited into an efficient, market-driven, customer focused institution with good corporate governance structure. Continuous improvement of our business policies, procedure and efficiency through integration of technology at all levels. 4.2 ORGANIZATIONAL STRUCTURE: Prime Bank has headquartered at Adamjee Court -Annex Building that is situated at Motijheel Commercial Area. BUSINESS DIVISION: Retail Banking Corporate Banking Islamic Banking SME Banking NRB Banking Offshore Banking Treasury

Corporate Banking General Credit Unit Export Finance Unit Lease Finance Unit

NRB Banking: Account Facilities for NRBs Bank Overseas Network Wire Transfer Facilities

4.3 Products:
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Bank has a variety of retail banking products for consumers. Loans, Deposit Schemes, Account Service, Cards, and Other Service are provided to customers. 4.3.1 Deposits

Saving Account

Prime Bank brings security and convenience in Savings Account. Any Bangladeshi national with an age of 18 years or above can open this. It features Cheque-book facility Opportunity to apply for - safe deposit locker facility Utility payment service Transfer of fund on Standing Instruction Arrangement SMS Banking Online banking and ATM card.

Current Account Prime Bank brings security and convenience in Current Account in Taka which can be freely deposited and withdrawn. At the time of opening, this account is also accompanied by a Special Notice Deposit (SND) account. Deposit Scheme Prime bank offers Double Benefit Deposit Scheme with an interest rate of 11.61% annually for 6 years maturity and a maximum amount 2.5 million Taka. It also provides Education Savings Scheme for an annual interest rate of 10.75%

for 5 years maturity and a maximum amount of 0.5 million Taka. There are some others deposit schemes as well named House building deposit scheme, prime millionaire scheme etc.

4.3.2

Loans
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Car Loan:

Prime Bank car loan is for those who want to buy new or reconditioned car and need loan for the issue. The loan offers: Purchasing brand new/ reconditioned personal vehicle. Loan amount maximum 2 million Competitive interest rates on a monthly reducing balance Loan tenure - maximum 06 years

Marriage Loan: People who want to be married can avail the loan with competitive rates, convenient features and simple procedures. It features:

Wedding cost Loan maximum 03 lac Loan tenure - maximum 3 years Competitive interest rates on a monthly reducing balance

Education Loan Education Loan enables parents/guardians/students for those who want to fulfill their dreams. One can avail the loan with competitive rates, convenient features and simple procedures. Prime Bank education loan includes:

Loan amount maximum 05 lac Income of guardian, spouse, parents and siblings if any are considered Competitive interest rates on a monthly/quarterly reducing balance Loan tenure - maximum 4 year Convenient partial or early settlement Post-dated cheque

Any purpose Loan 16 | P a g e

Key features of any purpose loan are: Loan amount maximum 1 million Highest 10 times of monthly income Competitive interest rates on a monthly reducing balance Loan tenure - maximum 5 years Convenient partial or early settlement Debit Card & Credit Card

4.3.3

Prime Bank offers MasterCard Gold Credit Card, VISA Gold Credit Card, MasterCard Silver Credit Card, VISA Classic Credit Card, and International Credit Card. Prime bank also offers debit cards. It offers Prime Bank Master Debit Card and Prime ATM Card with which one can bank whenever wherever he/she wants.

4.3.4

Locker Service

Prime Bank offers modern locker facility for safekeeping the valuables, jewellery, documents and other precious things from their customer. Its a security which many people want today. Features of locker service are: Secure and confidential service Wide availability of the locker service Available in three sizes i.e. small, medium and large Auto debited facility for your locker rental charges. Nomination facility is available for the lessee of locker service.

Background of the Bank:

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5. Dhaka Bank Dhaka Bank is one of the popular commercial Bank in Bangladesh satisfying customer needs at different times. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to channelize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country grouped together to responded to this need and established Dhaka Bank Limited in the year 1995. The Bank was incorporated as a public limited company under the Companies Act. 1994. The Bank started its commercial operation on July 05, 1995 with an authorized capital of Tk. 1,000 million and paid up capital of Tk. 100 million. The paid up capital of the Bank stood at Tk 2,659,597,763 as on March 31, 2010. The total equity (capital and reserves) of the Bank as on March 31, 2010 stood at Tk 6,036,368,754. The Bank has 54 Branches, 4 SME Service Centers, 5 CMS Units, 2 offshore Banking Unit across the country and a wide network of correspondents all over the world. The Bank has plans to open more Branches in the current fiscal year to expand the network. The Bank offers the full range of banking and investment services for personal and corporate customers, backed by the stateofthe-art technology and a team of highly motivated Professionals. As an integral part of our commitment to Excellence in Banking, Dhaka Bank now offers the full range of real-time online banking services through its all Branches, ATMs and Internet Banking Channels. Dhaka Bank Ltd. is the preferred choice in banking for friendly and personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments.

Company Profile: Dhaka BANK

Basic Information 18 | P a g e

Company Name Business Type Product/service

: : :

Dhaka Bank Banking and Financing Deposits, Loans, Debit cards, Credit cards etc Address : Biman Bhaban (1st Floor),

100, Motijheel C/A, Dhaka Year Established Company Websites Ownership type Business Chairman : : : : 1995 http://www.dhakabankltd.com Public Corporation

Mr. Reshadur Rahman

Stock Market Information

Listed in Dhaka Stock Exchange Market category Authorized Capital Paid up Capital Earning Per Share (2010) Dividend (2010) Corporate Vision:

: : : : : :

2000 A 10000 Million 3590 Million 6.31 35%B

To offer razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments.

Products:
Retail Banking:

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5.1.1

Bundled Savings Product:

Dhaka Bank Bundled Savings Product is a unique package that blends all flexibilities of a current account with the interest earning provisions of a savings account, namely Dhaka Bank Silver Account Dhaka Bank Gold Account : Initial Deposit BDT 30,000 : Initial Deposit BDT 50,000

Dhaka Bank Platinum Account : Initial Deposit BDT 1,00,000

High Interest on Daily Balance: Silver Account Gold Account Platinum Account : 7% : 7.5% : 8.5%

5.1.2

Deposit pension Scheme: Deposit Pension Scheme (DPS) is an installment-based savings scheme of Dhaka Bank for a single individual. Dhaka Bank DPS offers competitive interest rates and installments that are affordable for our Customers. The scheme offers the flexibility of tailoring the amount of monthly deposit based on monthly cash flow position. The minimum monthly deposit is BDT 500 and in multiples of BDT 500, subject to a maximum of BDT 20,000. An individual can maintain maximum 5 no. DPS accounts in a single name or in joint names, with any of your family members.

5.1.3 Salary Account Dhaka Bank has launched a special package of savings account for employees belonging to institutions with which Dhaka Bank has a corporate agreement. With this package salaried employees of these institutions enjoy interest on a daily balance. The key features of the Salary Account are:

Interest to be calculated on a daily balance basis No Periodic Service Charge 20 | P a g e

ATM Card Facility Credit Card Facility On-line Banking Facility Internet & SMS Banking Facility

5.1.4 Personal Loan: Salaried individuals, professionals, and business person can apply for this loan. The loan size is Minimum BDT 5,00,000 to Maximum BDT 20,00,000 at 18% annual interest rate and 2% Loan processing fee up to 5 years.. 5.1.5 Car Loan: Car loan is for those people who want to buy new or reconditioned car but has funding shortage which can be leveled by taking extra financing like loan. Salaried individuals, professionals, and business person can apply for this loan. The loan size is Minimum BDT 5,00,000 to Maximum BDT 20,00,000 at 18% annual interest rate and 2% Loan processing fee up to 5 years. 5.1.6 Home Loan Home loan is for those people who have decided to buy a new home but have funding shortage. Dhaka bank provides home loan to those people so that they can have their extra financial source. Salaried individuals, professionals, and business person can apply for this loan. The loan size is Minimum BDT 5,00,000 to Maximum BDT 75,00,000. Tenure is 5 years to 15 years at 18% annual interest rate and 2% loan processing fee. The insurance premium will be borne and arrange for by the borrower and copy of up to- date INSURANCE POLICY will be submitted to the Bank on regular basis. Background of the Wholesale/ Retail businesses in Islampur: 6. Reza Enterprise: Reza enterprise is a Wholesale Fabrics trading organization having only an outlet in China Market, Islampur. Both the shirt and pant fabrics are it main products. Md. Shamim Rahman alone started this business in 2000 to make profit by 21 | P a g e

renting a small shop which is now been replaced by a larger one. Currently the organization is having a monthly transaction of 4.5 million Taka. Most of the trades are done on credit where cash sales are also in there. Sole proprietorship of the organization has made it act faster than other organizations. Among its associated organizations, Reza Fabrics is having the larger number of employee working. Main objective of the organization is to explore the possibilities and thus be the Leader in the market by satisfying consumer needs. Providing quality product and creating a goodwill which will help them to create strong brand equity in the market. 7. Vai Vai Fabrics: Vai Vai Fabrics is a retail partnership organization, formed by two brothers, Abul Kalam Azad and Md. Delwar Hossain. Both of them are equal partner of the business. The organization is currently operating business at Gulshanara City Market. All the retail buyers of Shadarghat and Islampur are the main market for the organization. They say Business is all about meeting new people, satisfying new customers. Retail buyers are often unknown to them. Yet it is promised to provide better quality product to make the customer purchase again. Trades are often done on credit in this organization, sometimes which also leads to bad debt losses. Satisfying customers by providing quality fabrics and helping them by giving trade credit when needed and thus creating brand equity in the market which will lead them to be renowned and increase sales or creating more profit in the future is main mission of the organization. 8. M/S Bappi Traders: M/S Bappi trader is quite popular in the area of doing its business. Trustworthiness honestly has made it popular in its arena. People are quite familiar with the name, though it is not a very much large organization. Bappi Mozumder, the business owner started the business in 2003 with a capital of 2.2 22 | P a g e

million Taka which has led the organization to see a profit of 1.5 lac Taka every month. To build a good relationship with the customers and sellers, early repayment of trade credit is very necessary, the owner says. Honesty in paying trade credit on time has made an opportunity for the organization which it has used to take further credit and invest in different areas. M/S Bappi Traders is currently trading only Gents shirt fabric items which include cotton fabric, polyester fabric, TC fabric and so forth. Maximizing profit by lowering operating costs and managing finance and getting trade credit to invest it business to create profit is its main strategy. Currently the organization is having only 3 employees which reduces the operating cost from others and the goodwill always helps them to get trade credit easily.

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Basic Information: Reza Enterprise Business Name Business Type Business line Product/service Address : : : : : Reza Enterprise Wholesale Fabrics trading Fabrics trading organization Shirt fabrics, Pant fabrics. 32 china market, Islampur, Dhaka : : : : : 10 2000 Sole proprietorship Taka 30,00,000 Md. Shamim Rahaman

Number of employees Year Established Ownership Type Opening capital Business Chairman

Trade & Market Main Markets : Islampur, Bangladesh

Organization Information Outlet size Outlet Location : : 100 square meters. Islampur, Dhaka, Bangladesh.

Mission and Vision The organization will always try to explore the possibilities and thus be the Leader in the market by satisfying consumer needs. Providing quality product and creating a goodwill which will help them to create strong brand equity in the market.

Basic Information: Vai Vai Fabrics 24 | P a g e

Business Name Business Type Business line Product/service Address

: : : : :

Vai Vai Fabrics Retail trading. Fabrics trading organization Women Fabric Wear 46 Gulshanara City Market, Islampur, Dhaka : : : : : 6 2003 Partnership organization Taka 25,00,000 Abul Kalam Azad and MD. Delwar Hossain

Number of employees Year Established Ownership Type Opening capital Business Chairman

Trade & Market Main Markets : Islampur, Bangladesh Shadarghat, Bangladesh Organization Information Outlet size Outlet Location : : 100 square meters. Islampur, Dhaka, Bangladesh.

Mission and Vision Satisfying customers by providing quality fabrics and helping them by giving trade credit when needed and thus creating brand equity in the market which will lead them to be renowned and increase sales or creating more profit in the future. Basic Information: M/S Bappi traders Business Name : M/S Bappi Traders 25 | P a g e

Business Type Business line Product/service Address

: : : :

Wholesale trading. Fabrics trading organization Gents Shirt fabrics 22 Maya Katara Market, Islampur, Dhaka : : : : : 3 2007 Sole Proprietorship Taka 22,00,000 Bappi Mozumdar

Number of employees Year Established Ownership Type Opening capital Business Chairman

Trade & Market Main Markets : Islampur, Bangladesh Organization Information Outlet size Outlet Location : : 100 square meters. Islampur, Dhaka, Bangladesh.

Mission and Vision Maximizing profit by lowering operating costs and managing finance and getting trade credit to invest it business to create profit. Thus creating a relationship between the associate business owner and make a welfare for all.

9. Products: 9.1 Reza Enterprise:

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Reza Enterprise is a Wholesale Fabrics trading organization which have shirt and pant fabrics products. Some of the products are: Cotton Fabrics:

100% cotton shirt fabrics for those people who feel comfortable wearing cotton. Also full cotton is more comfortable in summer days. Both cotton shirt Fabrics and Cotton Pant fabrics are available Polyester Shirt Fabrics:

Polyester fabrics are for those people who want to keep a glossy image on their shirts. Polyester fabrics may not be as comfortable as cotton but still it has its market for its design and color attractiveness. Teton Cotton Fabrics:

TC fabrics are a mixture of Teton and Cotton which is for the people who want some of both Teton and Cotton. The proportion of Cotton or Teton vary in different manner 9.2 Vai Vai Fabrics Vai Vai fabric mainly does business on retail outlet thus it has variety of fabrics. Some of the products are: Three piece Fabrics: For three piece there are some wide range of fabrics are available, which may be bought by wholesale and retail Voile and Danni Voile Fabrics:

Another woman wear Fabric which maybe used for making three piece or any other dresses. Shipon Fabrics:

Quite popular fabric in that area of business which is also used for making different types of female dresses 27 | P a g e

Georgette Fabrics:

This is very much popular and has numerous sales on average. This fabric is attractive and can used in party wear. 9.3 M/S traders M/S Traders is a wholesaling business organization which genuinely sells fabrics wear for gents. Some of the products are: China Cotton:

Specialized cotton which is imported from china has a great market demand for its quality and durability. Polyester Shirt Fabrics:

Polyester fabrics are for those people who want to keep a glossy image on their shirts. Polyester fabrics may not be as comfortable as cotton but still it has its market for its design and color attractiveness. Teton Cotton Fabrics:

TC fabrics are a mixture of Teton and Cotton which is for the people who want some of both Teton and Cotton. The proportion of Cotton or Teton vary in different manner

10. Calculation and Comparison of EAR Prime bank, Dhaka Bank and Brac ban, these banks have several numbers of loans. For comparing advantage and competitiveness we have selected home

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loan and car loan to be compared. The calculations are shown in the appendix section. 10.1 Dhaka Bank Car Loan: Dhaka bank offers up to 12 lac of loan with a cost of 18% annual interest rate and 2% loan processing fee for a maturity period of 5 years. The calculated EAR is 18.36% 10.2 Prime Bank car loan: Prime bank offers up to 20 lac of loan with a cost of 17% annual interest rate and 1% loan processing fee for a maturity period of 6 years. The calculated EAR is 17.17% 10.3 Brac Bank Car Loan: Brac bank offers up to 20 lac of loan with a cost of 18% annual interest rate and 1.5% loan processing fee for a maturity period of 5 years. The calculated EAR is 17.26% 10.4 Dhaka Bank Home Loan: Dhaka bank offers up to 10 lac for home loan with a cost of 15% annual interest rate for 5 year and a processing fee of 2%. The calculated EAR is 15.31%. 10.5 Prime Bank Home Loan: Prime bank offers up to 10 lac of loan with a cost of 14% annual interest rate and 2% loan processing fee for a maturity period of 5 years. The calculated EAR 14.29% 10.6 Brac Bank Home Loan:

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Brac bank offers up to 15 lac of loan with a cost of 16% annual interest rate and 1.5% loan processing fee for a maturity period of 5 years. The calculated EAR 16.24% 11. Trade Credit: Trade credit of Islampur Fabrics industry is quite higher and frequency of credit has made it larger. Since there is a large difference between each credit transaction and it depends on the customer, we have counted the average amount. Calculated EAR is given below: 11.1 Reza Enterprise: Reza Enterprise generally provides 12lac of credit each month. The discount rate is 1/20 net30. The calculated EAR is 43.077% 11.2 Vai Vai Fabrics: Vai Vai generally provides 15lac of credit each month. The discount rate is 1/15 net30. The calculated EAR is 26.97% 11.3 M/S traders: Vai Vai generally provides 15lac of credit each month. The discount rate is 2/10 net60. The calculated EAR is 15.66% 12. Comparison between the EARs: It is seen that cost of trade credit is quite higher than the cost of bank loans. For the occurrence of home loan and car loan the banks have some competitive rate and EAR, where the Trade credit in Islampur fluctuates a lot. It depends on the customers goodwill and the willingness to take credit back from the buyer.

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13. References: 1. www.bracbank.com 2. http://www.primebank.com.bd 3. http://www.dhakabankltd.com

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4.

Appendix

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