Right now they are focused on easier & flashy car loans, home loana, heavy rated FDR deposits, leasing of buses, trucks, cabs, human haulers, vans and proliferated small shop financing covered by very lucrative ‘SME financing.’ Where is the industry here? In worst, IPDC started a vague credit card business (club royal) to enjoy rebated hotel, dinner, spa being a pioneer industrial promoter! IIDFC posted a big outdoor ad on Birdem-PG foot over bridge at Shahbagh to take ‘car loan, home loan from them. Wow! Now pushing someone to buy a car, a flat, a tv, a fridge is called ‘industrial financing.’ Dear finance student/academicians, please redefine your terminology.
Another word that needs to be illustrated is ‘SME’. A very popular, repeatedly uttered term in round tables & editorials. I found no substantial long road in Dhaka city without miscellaneous shops. It is termed SME by our ‘industrial promoters.’ In the name of SME some are doing only retailing, some are writing editorials, some are writing articles in never read journals to become professors from lecturers, some are building capacity like IFC-SEDF, some are disbursing loans to almost micro credit level. CitiNA in commission business, SCB in credit card, HSBC in salary account, BRAC in SME, Dhaka Bank in Car Loan, DBBL in ATM. So country is going to be industrialized soon! Thanks to old fashioned uttara, islami, pubali, ab, agrani. At least you are in ‘industry somewhat.’
Worst consequence of this proliferated consumer financing business are- emergence of enjoying more than you can afford, traffic jams, extra fuel consumption by upper segment at the cost of public, social imbalance, frustration from jealousy, idle money breeds money thoughts (what IPDCs slogan), less interest to value adding business specially in manufacturing & service and as a whole weakening/stagnant real economy but sprouted consumerism that make inflation ultimately an eventuality.
Note: the writer is not against consumer financing business. But he wants an appropriate naming of your organization, equilibrium between industrial & personal financing by FIs.
-Azad A. Kalam