Housing Finance Industry in Bangladesh

Topics: Economics, Environment, Real estate Pages: 7 (2292 words) Published: July 2, 2013
Industry Information:
Identifying Environmental Factors:

In analyzing the business environment of DBH a clear distinction is made between internal and external environmental factors.

Internal Environment: The internal environment of an organization consists of the conditions and forces that exist within the organization. Business can make changes in these factors according to the change in the functioning of enterprise. It includes various internal factors such as resources, owners/shareholders, board of directors, employees and trade unions, good will and corporate cultures. Detailed internal environmental factors of DBH are discussed below: Resources: DBH has an authorized capital of TK 200 Crores and a paid up capital of TK 100.9 Crores after the share value denomination in the year 2010. The company has six branches in Dhaka, Chittagong, and Sylhet. It has a strong employee base consisting of 149 skilled well trained employees in all the branches and it employs more than 500 deposit associates who work on commission basis. DBH believes that its best investment is in the human resources, as the Company believes that human resource is the edifice on which the company’s performance and productivity are standing on.

* Shareholders: DBH is a public limited company listed both in DSE and CSE. It has both foreign and domestic institutional share holders. The shareholding pattern is as follows:

* Board of directors: As the company has institutional shareholders such as IFC, HDFC, Delta Life Insurance, Green Delta Insurance, and Brac; the board of directors include representatives from this institutions and al well as representatives from general shareholders and foreign investors. The board is responsible for top level strategy making and providing directions to the company. They oversee operations and performance of the company and guide it on the right path for maximizing its profits.

* Organizational Culture: Organizational culture is viewed as the foundation of internal environment in an organization. Organizational culture influences the actions and behavior of the employees and the management. There is a strong organizational culture prevails in DBH and it motivates its employees to work hard for achieving its goals.

* Organizational Goodwill: DBH has established itself as the pioneer in the housing finance industry in the country. Goodwill of its institutional shareholders has also contributed toward establishing such a favorable positioning in the market. Moreover, DBH has earned highest credit rating AAA for last six consecutive years, which has helped DBH to create a better market positioning. External Environment: Those factors which are beyond the control of business enterprise are included in external environment. The external environmental factors reside outside the organization and it can lead to opportunities or threats. Moreover external environment can be classified in two types: * General environment or remote environment (Macro environment) * Industry environment or immediate operating environment (Micro environment) Detailed external environment of DBH is discussed below:

General Environment:
The general environment includes the distant factors in the external environment. The components of this environment are common in nature. Factors of general environment are political factors, economic factors, socio cultural factors, technological factors, legal factors, natural factors, and demographic factors.

* Political Factors: No matter how attractive the economic prospects of a particular country or region are, doing business there might prove to be financially disastrous if unanticipated events in the political arena lead to the loss of income-generating assets. Though political instability creates problems in the path of business for DBH, its direct effect on DBH in real terms is somewhat insignificant. But the indirect effect is quite considerable as...
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