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Bangladesh's best bank for SMEs 2019: IDLC Finance

IDLC Finance

Arif Khan, CEO & MD, IDLC Finance.jpg
Arif Khan, IDLC Finance

Founded in 1985 under the aegis of multilateral institutions including the Aga Khan Fund for Economic Development and the IFC, IDLC Finance really found its role in life in 2006, following the launch of its small and medium-sized enterprise business. Since then, it has become Bangladesh’s most influential provider of SME services. Outstanding loans to SMEs amounted to $415 million at the end of 2018, up from $350 million in the previous year. At the end of 2018, SME lending comprised 43% of its portfolio, against 21% a decade ago.

Over the course of the review period, IDLC Finance’s client base grew 11% to 14,000.

According to diagnostic tests carried out by the IFC, it is one of the most-efficient SME lenders in Bangladesh, with a cost-to-income ratio of 39% at the end of 2018, and a non-performing loan ratio of 2.8%.

Run by managing director and chief executive Arif Khan, the bank boasts 28 dedicated SME centres dotted around Bangladesh, employing 450 staff, all of whom can take part in some or all of its 83 annual training programmes.

But it is the financial institution’s deep bench of services that really impresses. It offers everything from supplier and distributor finance to factoring and corporate finance.

An internal credit scoring system developed in alliance with the IFC and Indian analytics expert Crisil enables small business clients to gauge and minimise credit risk.

Another creditable development in recent years is Purnota, a broad suite of financial and non-financial services that targets female entrepreneurs and offers an array of services and products from unsecured loans and skills training to book-keeping and advice on how to secure operating licences across a host of industries.

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