Corporate Financing, Syndication and Credit Risk Managemant

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Chapter-01
Introduction

1.1 Introduction
1.2 Importance of the study
1.3 Objective
1.4 Methodology
1.5 Limitation of the study

1.1 Introduction
Leasing is one of the fastest-growing ways of financing equipment in business today. For the last three years, the leasing industry experienced average growth rate of around 30 percent, although the market penetration remains very low range of 3-4 percent of medium term financing. With the new leasing companies and active participation of commercial banks in the leasing business, the overall competition level has increased substantially during the year. Withdrawal of initial depreciation allowance on asset in 1998 continues to adversely affect the profitability of leasing companies. However, among visible non-functioning of development financial institutions (DFIs), ailing capital market and lack of interest of commercial banks in term financing, the leasing industry remains only vibrant financial intermediaries for the medium term financing with less than 5.0 percent non-performing loans.

Lease financing, as organized in Bangladesh, operates with the following objectives: (a) to assist the development and promotion of productive enterprises by providing equipment lease financing and related services; (b) to assist in balancing, modernization, replacement and expansion of existing enterprises; (c) to extend financial support to small and medium scale enterprises; (d) to provide finance for various agriculture equipment; and (e) to activate the capital market by operating as managers to the issue, underwriters, or portfolio managers.

Leasing companies, however, face some problems in conducting their business in the country. The relatively slow growth of the demand side compared to the fast growth of the lease business is one such problem. This leads many leasing companies to operate in partial capacity. The culture of loan default that prevails in the country is also a deterrent. Leasing companies often find it difficult to raise funds through short- or long-term borrowing from money and capital markets. They are hard pressed to deal with the financial assets because of the present laws of the country, which are also not fully enforceable.

1.2 Importance of the study

Since practical orientation is an integral part of the BBA degree requirement, I was deputed by Business Studies, Chittagong University to United Leasing Company Limited to take real life exposure of the activities of the organization as a financial institution.

During my observation at ULC, I have come across with different functions of the company. From them I have gathered some information in the field of Corporate & Syndicate Financing (C&SF) and giving special emphasis on Credit Risk Management Department (CRM). I hope the report will give a clear idea about the activities and role of Corporate & Syndicate Financing of the NBFIs of the country and realization of credit risk management to reduce the risk. However, apart from that in this report different financial analysis of the company have been furnished to have an inner depth of the actual scenario.

1.3 Objective
The prime objective of the report is to provide prospective undergraduates with on the job exposure and an opportunity to apply theoretical knowledge so far received into real life situation and the objective of this report is to meet the requirement for the degree of BBA. Though the title “An Overview of Corporate financing, Syndicate financing and the Credit Risk Management Process of United Leasing Company Limited” very lengthy area, the specific objectives are as follows: * To know the role and functions of Corporate & Syndicate Financing * To study about whole C&SF procedure

* To study the importance of CRM Department
* To evaluate the decision making process of Credit risk management * To know about the probable modification can be done in the whole C&SF...
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