Page 56 - IBT December 2020

CFO of the month
A Testament
of Commitment
Shamim Al Mamun elucidates the future
of the NBFI sector and iterates
LankaBangla's dedication to its
consumers through robust innovation.
Since the pandemic's
fallout, the government
has provided numerous
incentives, including
stimulus funds and
relaxing loan
restructuring policy for
the NBFI sector. How
have the initiatives
helped in overcoming the
adverse impacts of
COVID-19?
Likewise developed countries,
Bangladesh Government has
taken numerous steps to
overcome any negative economic
impact of the pandemic including:
declaring loan based stimulus
fund for export oriented, large
and CMSME sector, reduction of
AD ratio, bank rate, repo rate and
CRR rate, waiver of interest on
loans for 2 months, moratorium
on loan payments up to December
31, 2020 etc. Although most of
the incentives have been designed
for banks, NBFI sector also get
some benefits from those
initiatives like: quota of 1,000
crore from CMSME sector and of
1,500 crore from large sector’s
stimulus package, reduction of
CRR from 2.5% to 1.5%,
moratorium on loan payments up
54
Investing in CMSMEs How crucial are the can our NBFI sector adopt on its own. There should be a
adaptation and
these technologies?
separate line of business for banks
(cottage, micro, small and
implementation of fintech in
and NBFIs or NBFI should have the
Very timely question indeed. Like I
medium enterprises) is
the NBFI sector? Can you
same scope of work like banks.
said earlier, using of Fintech solution
still considered a
high-risk endeavor in our please share some of the will be the Critical Success Factor for Otherwise, NBFI cannot sustain for a
long run and aim towards
fintech solutions that
any financial institution in the near
economy. How much does
sustainable growth.
future to stay in business with
LankaBangla has
LankaBangla prioritize
Policy changes are the main support
sustainable growth. These three tools
implemented?
CMSME investment? Do
you have any programs to
afloat. Beside that development of
interrelated and these can give any
assist CMSME clients? Going forward Fintech solutions will be (Big Data, IoT and AI) are that is needed for NBFI to remain
the critical success factor for an NBFI to
The CMSMEs being high risk has survive as well as to maintain a financial institution an extra mileage vibrant bond market by overcoming
all existing hurdles is another
multiple dimensions, it depends sustainable growth as we will see over its peer organizations. NBFIs support government can do for NBFI.
that are dealing or wants to deal
massive technological evolution in next
from which point of view you are few years. As such, many of the with mass consumer and SME clients
judging CMSMEs. If one sees
exposure to a CMSME customer as businesses of banks and NBFIs will be will be benefited by exploiting these Can you elaborate on the
two deposit schemes Swasti
a standalone investment, it is taken over by Fintech based institutions tools. These tools will help a and Protiva, that
financial institution to understand
highly risky. But if you see it from in coming days. Moreover, the use of
to December 31, 2020. These Fintech helps a financial institution to the behavior and trend of consumers LankaBangla has launched
initiatives have helped the NBFI a portfolio perspective, given scale up business, to serve customers and thus the Company can offer the with life insurance
sector to some extent. As on June proper risk management practices better, to increase effectiveness and right products and services to cater coverage? What are the
30, 2020 private advance are in place it can be a pretty efficiency of business operations and the needs of consumers. Moreover, objectives behind these two
portfolio of NBFI sector stands at diversified investment as a large thus increase the bottom line. these tools will also help to render schemes? Please highlight
567.51 bn which was 575.55 bn number of the borrowers from At LankaBangla, we are in the process superior customer service and to help the benefit of the schemes
as on December 31, 2019, a various sectors and geographic of implementing many fintech risk management including for customers?
regions yields substantial
negative growth of 1.4% against diversification benefit which in solutions. We are about to launch an AI determining credit score of an Swasti and Protiva are kind of
applicant automatically, detection of
banking sector positive private
sector credit growth of 4.19% in turn reduce risk in portfolio level. based chatbot which will give fraud and error, helping clients not to Bancassurance product where the
first half of 2020. The apparent Also, from the perspective of customers instant service round the go beyond their credit limit etc. customers will get life insurance
problem of liquidity dryness for liquidity management, the clock from anywhere in the world. We It will take time for NBFI sector to coverage without paying any
the NBFI sector has not been As scope of business for banks CMSMEs can be considered as a are in the process of implementing a adopt those technologies in large due premium. The objective of these two
solved that much round the year. and NBFIs are almost the same in well-diversified laddered portfolio digital wallet for our customers to the necessity of huge capital products are to take care of our
whereby our customers can transfer
Nevertheless, the whole economy Bangladesh, competitions are of loans that has a high certainty their funds in the digital wallet from investment and requirement for customers and their beloved families
fierce although the strength of
in the event of any unhappy event.
has benefited from government banks and NBFIs are totally of cash flow with very low any bank or credit card and pay any individual Company specially for LankaBangla will pay all the
initiatives. Despite COVID-19, different. Usually the cost of fund concentration risk. In aggregate dues of LankaBangla or any DPS those NBFIs who are not dealing with premium to insurance companies on
major economic indicators of of NBFI is higher than bank as this business model with high payment or even can place a deposit. consumer and SME business by that behalf of customers.
inflation, exchange rate, GDP NBFI has to collect public deposits risk-adjusted return, exposure to We are also working on online approval much. “SWASTI” is a unique savings plan
growth, export and remittance at a higher rate than bank and a CMSMEs can be considered as a systems whereby an application for any However, at the Company level, few with dual benefit for customers.
growth, reserve money etc. are sizeable funding of NBFI comes sound investment strategy. consumer loan will be approved by the NBFIs may adopt these soon. Under this scheme nominee(s) will be
rising well. from Bank at a high rate. Due to At LankaBangla we are increasing system at the quickest possible time by LankaBangla will plausibly be the eligible to get full maturity value in
our exposure to CMSMEs as a
this, the lending rate offered by using machine algorithms and big data. first NBFI who will adopt all of these case of death or permanent disability
What are the challenges NBFI is also higher than in banks. prioritized strategic agenda; we We are also thinking to exploit block technologies as we are the only credit (accidental) of the Account Holder at
have proper infrastructures,
that the NBFI sector faces Higher lending rates discourage chain technology for fostering our card issuer NBFI in Bangladesh and any time for any reason (including
in terms of competition good customers to take borrowing product, people, and processes in supply chain financing business. we firmly believe exploitation of COVID-19).
place to increase our CMSME
against the banks? What from NBFI. Therefore, NBFI is Besides these we have already made tie these technologies will give us an “Protiva” is for the new generation to
can be done to overcome experiencing increasing NPL day portfolio aggressively. Coming up with most of the digital payment extra boost in our consumer business explore new horizons. It is a
days, we will increase our touch
them? by day. To solve this problem, the solution providers so that our especially in the credit card segment. specialized deposit scheme with life
From the experience of other cost of fund of NBFI must be point across the country to cater customers can pay at their convenience. insurance (including COVID-19)
to CMSME specially Cottage and
countries, Bank and NBFIs have reduced so that lending rate of We have already transformed our credit What are the legal and coverage free of cost. The minor
different lines of business and do NBFI comes closer to the rate Micro segments. We have a special card software and implemented regulatory challenges that account holder under this scheme
program named “SHIKHA”
not compete with each other offered by banks. TranzWare which will help the Company remain for the NBFI sector? will be eligible to get full maturity
rather work as supplementary Bond market development is designed for women entrepreneurs to capture Big Data and serve the What kind of government value in case of death or permanent
in CMSME segments which offers
institutes. Usually bank finances inevitable for survival and customers in a better way with the right support is the industry disability (accidental) of the legal
for short term tenure and NBFI sustainable growth for NBFIs as both loan and deposit products to products and services. seeking to overcome the guardian at any time for any reason.
women entrepreneurs. Under loan
finances for long term tenure and this is the only long term source hurdles? We encourage customers to take
bank is dependent on public for NBFI that is less costly. Classic products, women entrepreneurs How can the use of Legal and regulatory challenges of an these schemes as it will give them
are getting loans on relatively
deposit especially for short to example is NBFCs of India who technologies such as Big Data, NBFI is the limitation in its scope. free life insurance coverage and will
medium term while NBFI takes source their major fund from bond easy terms and under deposit IoT, and AI change the way Like I said earlier NBFI has to give their family a financial support
products, women are getting
long term fund at reasonable rate market and cost of bond is less NBFI(s) operate? How soon compete with banks on an uneven in the event of any unprecedented
especially from bond market. than the public deposit higher rates than normal deposit field as NBFI cannot do many things accident.
customers.