Building From The Core

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Khwaja Shahriar
Acting Managing Director
LankaBangla Finance Limited

Acting Managing Director of LankaBangla Finance Limited, Khwaja Shahriar has a firm grasp of the finance industry due to his stints at several commercial banks and non-bank financial institutions (NBFI). Having worked companies like BRAC Bank, AB Bank Limited, Uttara Bank Limited and GSP Finance Company Limited as well as several others, Shahriar is now set to make a difference in the industry with new and improved banking solutions through LankaBangla Finance Limited.

You’ve spent most of your career in Commercial Banks. What changes did you have to deal with when you moved from a Bank to an NBFI?
After working in commercial banks, working in NBFIs was not much of a challenge for me. Though NBFIs don’t have general banking, however, they have functions similar to commercial banking, such as lending and taking deposits. When I joined here first, the industry as a whole was not in a good shape. We have around 32 NBFIs in Bangladesh, but apart from a few companies most of the companies’ were not performing as was expected of them.
At first, with a very enlightened and supportive Board of Directors, we had to reorganize the entire organization in a way which would give us leverage to avail the opportunities in the market. Earlier our focus was geared more towards the capital market but as a financial institution, our primary goal was to focus on the core competencies such as lending and deposit taking. So we tried to recruit the right kind of people who could appropriately help our company’s growth.

What areas of the market are LankaBangla focusing on currently?
For the last 3-4 years, we’ve been focusing on building our strengths around our core competencies. That has given us the edge that we primarily needed. If one looks at the lending spectrum, we focus on areas like corporate, retail, as well as SMEs. But considering the market, we’re trying to bring our focus more towards SMEs as this particular segment remains the main engine for growth. From the risk management point of view, the SMEs are smaller in size, so that way you can diversify your portfolio and also mitigate the risks to a greater extent.

What style of leadership do you incorporate in your work throughout LankaBangla Finance Limited?
The people that we recruited in LankaBangla comprise of young individuals; these people have been the driving force for this organization. The kind of leadership that we’ve been following is very much a participatory one. Apart from our guidance, they are empowered to take decisions on their own. I personally prefer this because most organizations take the top-down approach, we however, go for the bottom-up approach. People of this new generation, believe in new ideas and innovations. At LankaBangla, we’re trying to tap into the minds of our youthful employee pool. If you look outside our company, you’ll see that our economy is also being driven by these people. So as far as where leadership is concerned, we were able to create a platform where these people can excel by unleashing their potential.

What are the challenges of operating in the financial industry in our country?
If you look at the overall economy, you’ll see that it’s in a sound position compared to what it used to be. All we need is the right structure and people to take advantage of the growth potential that are available in the market. The regulators have been really helpful in this regard. This is evident in the private sector as private sector credit growth is on the rise again. You can see it in the entrepreneurial zeal of the people, they are now more interested to avail loans so that they can make meaningful contributions to the economy. I believe that if you have a good understanding of the market, you can overcome any kind of challenges.

“Earlier our focus was geared more towards the capital market but as a financial institution, our primary goal was to focus on the core competencies such as lending and deposit taking.”

What is the competitive scenario you’re facing in this industry? How are you steering LankaBangla through this?
Although we are an NBFI it doesn’t mean that we’re competing with our peers only; banks are also our competitors. The first competition that arises is from the human resource’s side; our people have been an asset for this organization and we are facing challenges in retaining them; there’s also the cut-throat competition in terms of rates. But we believe that we’ve been able to build a competitive advantage, where we are still managing to do good business. We follow a ‘differentiation strategy’, which means ensuring more value addition in terms of services and processing. These are the things that paved the way in establishing a positive presence in the market, regardless of the competition.

What is LankaBangla doing in terms of financial inclusion for our country?
As part of the Government and Bangladesh Bank’s initiatives, we are also working towards the financial inclusion. We are trying to focus more on the SME’s. As a result, most of the branches that we’ve opened are outside Dhaka. So SME financing is one of the initiatives that we have taken, in order improve the state of financial inclusion for people in the rural areas. SME’s being the growth engine for the economy, needs financing and that happens to be one of our main focus. On the other hand, our deposit side is trying to mobilize deposits from the far-reached parts of the country, driving the national savings. We’re also complementing the bank’s efforts, especially by introducing our various deposit services. Right at the moment, we have 19 branches. By the end of this year we will hopefully have 30 branches; and most of them will be located outside Dhaka.

What other initiatives has your company taken to help with the development of the marginalized people in our society?
Our LankaBangla Foundation is dedicated to serve the cause of the marginalized people of our country. The foundation was built to address the CSR issues and for the last few years, it has been very much active. We are providing scholarships to poor but meritorious students. As a part of green banking, we’ve conducted tree plantation programs every year in various upazilas. During winter we try to reach out to the poor people under our blanket distribution program. Furthermore, we’ve also provided bicycles to female students in the rural areas so that they can commute to their schools. We’ve also donated eye equipment to some of the eye hospitals here.

What was the best leadership advice you ever received?
“Leadership is more of actions than a position. You have to think big and always believe in yourself. One has to broaden their mind to make the most of the opportunities, and once you do, you’ll be able to deliver more. This that will position you in a place from where you can lead.”

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