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Research Proposal

Introduction

The course of Business Statistics in the MBA program of North South University requires thcompletion of a research paper on a particular problem related to the business sector. As student of this course I have to prepare one and I will work on the loan related problems faced bthe entrepreneurs of Small and Medium Enterprises (SMEs) of Bangladesh. Eventually the titof my research report will beFactors influencing the amount of SME loan approved by thefinancial institutions against the amount of loan applied by the entrepreneurs of

Bangladesh.

Rationale of the Study

SME which is the acronym of Small and Medium Enterprise is one of the most talked aboissues of present time. The government of Bangladesh wants this sector to flourish at any conow. Bangladesh Bank has released improvised SME loan policy and has opened a SMdivision during 2009. And now it is mandatory for all the banks to have a separate SME servicenter. Actually the government has realised the importance of the growth of Small and MediuEnterprises. On the other hand, SME sector has several problems that need to be understoo

Among those funding problem is the major one.

So, a study on the entrepreneurs regarding their problems related to the loan achievement whelp the government, financial institutions and even the owners of the SMEs to understand thcrucial issues.

Objective of the Study

The main objective of the study is to identify the most influential reason behind the differen between the approved and applied loan amount.

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Research Proposal

Theoretical Model

The variable of interest is the percent of loan approved against the applied amount andindependent variables are financial performance of the enterprise, reputation of the enterpriand age of the business enterprise.

Loan approved against loan applied = [financial performance, reputation, age of the enterpris

Y = [X1,X2,X3]

Here,

Y = Z1/ Z2 100= loan approved / loan applied 100

Regression Model

= b0 + b1X1 + b2 X2 + b3 X3

Here, = Percent of loan approved against the applied amountX1= Financial performance (DSCR ratio) of the enterpriseX2= Riskiness of the enterpriseX3 = Experience of the proprietor/director/partner b0 = y intercept b1 = Slope of the regression line b2 = Slope of the regression line b3 = Slope of the regression line

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Research Proposal

Hypotheses

Better the financial performance of the SMEs, the percent of loan approved to loa

applied increases. The reputation of the SMEs increases, the percent of loan approved to loan applie

increases. More the age of the enterprise, the percent of loan approved to loan applied increases.

Methodology of the Study

Research Design

It will be an exploratory research.

Sources of Data Collection

I will use both of the following sources

Primary Source : I will use one survey questionnaire Secondary Source : Annual reports of the financial institutions, articles, web sites,

newspapers and books

Data Collection Method

I will obtain necessary data for this project by making a survey on SME clients who are in a lo

contract with the financial institutions. A survey questionnaire will be circulated among thclients of a bank (Brac Bank) and a non banking financial institution (IDLC Finance Ltd.). I walso take face to face interview of few clients to get detailed information. Through email I wisend few questionnaires to the clients. Moreover, I have a plan to go for another round of face face interview of the Brac Bank and IDLC personnel.

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Research Proposal

The sample size is 20 (SME clients). 10 will be from Brac bank and rest will be from IDLCFinance Ltd.

Data Analysis

It will be done using data analysis software named SPSS. I will also use MS Excel as perequirement.

Limitations

Time and cost constraints Non availability of desired clients at the right time Difficulties in getting interviews of IDLC and Brac Bank personnel due to their busy schedules Non availability of detailed information on SME loan due organizations privacy policy Lack of Information regarding Bangladesh Bank rules and regulations

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