International Journal of Computer and Business

8/6/2019 International Journal of Computer and Business

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International Research Journal of Computer and Business Vol. 1 Issue 8

www.irjcb.org

Chief Editor

Professor Dr. Samsul Islam ChowdhuryDepartment of Business and EconomicsUniversity of West Virgina Tech, USA.

Executive Editor

Dr. Mir Mohammad Azad, USA

Editorial Board

Peer selected based on expertise and submitted papers

Published by

International Research Journal of Business and Computer

Printed by

Price:

To be decided

Copyright @2001 by irjcb
http://www.irjcb.org/http://www.irjcb.org/


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Message from the editor

Welcome to International Research Journal of Computer and Business.

It is our pleasure to introduce the new journal. In modern world computer and business are sointegrated like real industry even in academic field, therefore we decided to combine both fieldincluding academician, researchers, industrial expert to share and update the field.

Boards of reviewer are selected based on submitted papers and journal is going to publish monthly.

Chief Editor

IRJCB


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Content

Performance of Stock Market of in Developing Country: a case study on Chittagong 5

Stock Exchange (CSE)

Enterprise Resource Planning for Business Improvement 23

Women Entrepreneurship Education in Economic Development 26

Management of Government Banking in The Third World country: a case study 40

on Agricultural Bank-Problems and Remedies

Assessment of Gap of Consumers right in Real Life: An Empirical study 60

Comparative study on Compensation Management Practices of Selected Securities 76

firms in Chittagong Stock Exchange Ltd


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Performance of Stock Market of In Developing Country:

an empirical study on Chittagong Stock Exchange (CSE)

Authors:

Mr. Mir Md. Tariqul Alam.

Mr. Abu HanifaNoman Bin Alam

Mr. A.M. Shahabuddin Chowdhury

Abstract:

A strong and well-structured secondary market is the focal point of capital market,which bears paramount magnitude in the economic development of a country. It is not amere coincidence that almost all the developed nations exhibit a strong secondarymarket. It is perceived to act as the medium of transactions between interested parties.This paper focuses on the growth of Bangladesh stock market over time. The markettrends in terms of market capitalization, market liquidity, market concentration, numberof listings, market turnover were considered. The study finds that key indicators are

significantly correlated. The findings of the study suggest that growth of stock market ofBangladesh till not stable. We conclude that Bangladesh stock market is still at an earlystage of its growth and stock market size is small.

[Key words: Stock market, growth, turnover, capitalization.]

Introduction:

Stock market can perform well to meet the

continuous financial needs of business

enterprises, if there exist a congenial

environment for boosting confidence of

bothstock market operators and investors

(Ahmed et al, 1996). The growth and

development ofstock market in a market

economy largely depends upon the creation of

enabling environment for boosting up

investors confidence. By providing liquidity

of shares and diversified instruments the

secondary market contributes in increasing

market capitalization. Investors become moreconfident and exert a positive impact on the

Gross Domestic Product (GDP) of our

country. Neighboring countries such as India

has market capitalization of more than 75% of

their GDP. In contrast Bangladesh capital

market is comparatively lower than India with

54.61% of the GDP. To make the secondary

market effective we should address two

important aspects which act as determinants of

stock market effectiveness. Volatility and

market efficiency are two important features

which will ultimately determine the

effectiveness of the stock market in economic

development (Hassan M K et al., 2000).


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Literature review:

Capital market is recognized as a vehicle for

rapid economic development through

mobilization of available resources in a

country (Ahmed S, 2005). Though

industrialization has picked pace in

Bangladesh almost three decades back, capital

market has failed to attract the entrepreneurs

as the key source of capital, which has usually

been occupied by the banking system since

beginning (Islam et al., 2010). That is why

Bangladesh capital market has comparativelylower market capital as percentage of GDP in

the region but now it is increasing. The capital

market in Bangladesh received significant

boost in last year. All share price indexes, turn

over as well as market capitalization,

improved substantially. However, the market

lacks reflection of company fundamentals and

the possibility of price manipulation in the

market through insider trading cannot be ruled

out (Simu T.H, 2009). Investors in Bangladesh

became increasingly interested in equity

markets because many entrepreneurs look for

requirements from the equity markets for

many reasons and DSE & CSE play an

integral role in the pace of industrialization of

the country (Akhter S et al, 2005). Demirguc-

Kunt and Levine (1996), Singh (1997) and

Levine and Zervos (1998) find that stock

market growth plays an important role in

predicating future economic growth in

situations where the stock markets are active.

The proponents of stock markets emphasize

the importance of having a "developed" stock

market in enhancing the efficiency of

investment. A well-functioning stock market is

expected to lead to a lower cost of equity

capital for firms and allow individuals to more

effectively price and hedge risk (Bepari M.K

&Mollik A, 2006). The market capitalization

of emerging market countries has more than

doubled over the past decade growing from

less than $2 trillion in 1995 to about $5 trillion

in 2005 (Yartey, 2008). As a percentage of

world market capitalization, emerging markets

are now more than 12 percent and steadily

growing (Standard and Poor, 2005).Measuring efficiency and performance level of

stock market needs some indicators and this

study used some yardstick to understand

market efficiency and performance.

Objectives of the Study:

The main objective of the study is to identify

the performance and efficiency of stock

market in Bangladesh and the specific

objectives are:

To investigate the pattern ofBangladesh stock market growth

To identify various indicators ofBangladesh stock market growth.

To recommend some guidelines toensure stable market growth

considering the current performance of

the stock market of Bangladesh.

Data and Methodology:

Research methodology of the study was

focused both on qualitative and quantitativestudy. Primary and Secondary both types data


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were used in this study. Secondary data were

collected for the period 2001 to 2010. Data are

collected from various issues of annual report

of Securities and Exchange Commission

(SEC) of Bangladesh, Quarterly Review of

SEC, Monthly Review of Dhaka Stock

Exchange (DSE) and Chittagong Stock

Exchange (CSE), Bangladesh Economic

Review, Statistical Year Book of Bangladesh,

Website of DSE, CSE, and SEC Bangladesh.

Interview techniques were used to collect

primary data through semi structuredquestionnaire. Few executives of CSE,

Investor, and executives of brokerage house of

CSE were interviewed based on convenience

sample method to understand real scenario of

the stock market of Bangladesh.

Descriptive statistics, correlation matrix, and

trend equation of key indicators are used for

the analysis of the collected data.

History of Stock market in Bangladesh:

The stock exchange in Bangladesh was

incorporated in April 1954 as the East Pakistan

Stock Exchange Ltd. However, formal trading

in the Exchange did not commence until 1956.

The Exchange remained suspended from 1971to 1975 due to the liberation war. After

liberation, the Exchange opened up in 1976

with only 9 listed companies. As of June 1999,

the Exchange has 210 listed companies with

230 listed securities and a market

capitalization of 1,046 million US dollars. As

in most other developing countries, the capital

market in Bangladesh has a relatively recent

beginning. It is gradually evolving as an

economic institution in response to the internal

requirements of a fledgling modern economy,

which has emerged as a result of economic

development and industrialization efforts.

Bangladesh is still a predominantly

agricultural economy. However, the

industrialization process over the last three

decades since independence has diversified the

economic base of the country at least to some

degree. The second stock exchange of the

country, the Chittagong Stock Exchange(CSE)

was established in April 1995.In order tocontrol operation of the stock exchanges and

trading of stocks of listed companies, the

government of Bangladesh established the

Securities and Exchange Commission of

Bangladesh on 8th June, 1993 under the

Securities and Exchange Commission Act,

1993 .The mission of the SEC is to protect the

interests of securities investors, develop and

maintain fair, transparent and efficient

securities markets, ensure proper issuance of

securities and compliance with securities laws.

The country's capital market showed a mixed

performance in 2009. Stock prices showed

significant upturn during the first half while

the second half witnessed downward

movement. Different monthly average price

indexes at Dhaka Stock Exchange (DSE) and

Chittagong Stock Exchange (CSE) lost

grounds although the daily average turnover

improved showing some fluctuations in 2008.

Compared with last month of previous year ,

the monthly average of all share price index

(DSI), DSEG, and DSE20 declined by 14.1

percent, 12.1 percent, and 8.3 percent


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respectively in December 2008. These indexes

declined rather sharply during July-December

2008. The liquidity situation of the capital

market improved in 2008 compared with the

previous year. The daily average turnover

stood at Tk. 2.8 billion in 2008 which was Tk.

1.4 billion in 2007. The monthly average

turnover reached to its peak in October 2008

with a daily average of Tk. 4.2 billion and the

lowest was observed in January 2008 with a

daily average of Tk. 1.5 billion.

Secondary Market Scenario:

The highlights of Bangladesh secondary

market is given below. The share price index

in Dhaka Stock Exchange (DSE) shows a

increasing trend with a downfall in the year

2005.

Table-01: Trading Operation in Dhaka Stock Exchange(Amount in million Tk)

Year No. of listed

Securities

IPO Issued

Capital

Market

Capital

Turnover Price

Index

2001 249 11 33,454.3 65,222.8 39,868.3 817.79

2002 260 08 35,203.0 71,262.0 34,984.9 822.34

2003 267 14 46,055.0 97,587.0 19,152.1 967.88

2004 256 02 49,532.0 224,923.0 53,181.1 1,971.31

2005 286 22 70,313.0 233,075.0 64,834.8 1,275.05

2006 310 12 118,437.0 323,368.0 65,069.3 1,321.39

2007 350 14 214,470.0 753,950.0 322,820.1 2,535.96

2008 412 12 372,156.0 1059,530.0 667,964.7 2,309.35

2009 415 18 522,099.0 1887,177.0 1475,300.8 3747.53

2010

(March)

437 06 566,584.0 2275,558.0 687,967.5 5582.33

Source: Bangladesh Economic Review, 2010

The number of securities (including mutual

fund and debentures) listed with the DSE

increased to 437 by March 2010 from 350 of

June 2007. By the march 2010, the issued

capital of listed securities stood at Tk.

566,584.0 million, which is 52.24 percent

higher than that of 2008.

Up to March 2010, market capitalization of

securities stood at Tk. 2275,558.0 million.

General share price index of the DSE stood at

5582.33 in March 2010, which was 2,309.35

in 2008. The number of securities listed with

the CSE reached 226 as in march 2010 from

217 as in 2009. By the march 2010, the issued

capital of listed securities stood at Tk.

177,603.9 million which is 46.05 percent


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higher compared to that at the end of 2008. As

of march 2010, market Capitalization of

securities reached Tk. 1862,988.5 million.

General share price index of the CSE reached

16,193.99 as on March 2010, which

was8,692.75 at end of 2008.

Table -02: Trading Operation in Chittagong Stock Exchange

Year No. of listed

securities

IPO Issued Cap.

(In ml taka)

Market Cap.

(In ml taka)

Turnover

(In ml taka)

Price

Index

2001 177 09 29,652.7 56,363.5 1,479.62 1,836.87

2002 185 09 31,079.9 60,467.7 13,586.1 1,841.14

2003 196 10 41,967.6 85,312.3 6,688.6 1,642.78

2004 198 03 46,978.7 215,010.8 17,551.3 3,597.70

2005 210 16 55,519.3 219,942.8 14,042.7 3,378.68

2006 213 06 69,378.4 270,510.7 15,893.1 3,724.39

2007 227 13 89,173.9 612,580.0 52,590.3 7,657.06

2008 238 12 121,603.2 807,684.0 99,803.7 8,692.75

2009 217 18 155,124.9 1470,807.0 162,562.6 13,181.37

2010 (March) 226 06 177,603.9 1862,988.5 60,737.3 16,193.99

Source: Bangladesh Economic Review, 2010

The billboard below shows the condition of the secondary market during last two quarters of the year

2008.

Table -03: Secondary market Billboard

Dhaka Stock Exchange Chittagong Stock Exchange

As on 30h

June

2009

As on 31st

Dec.

2009

As on 30h

June

2009

As on 31st

Dec.

2009

Total number of listed securities 443 415 245 217

Total issued capital of all listed

companies (in million)

457,94 0 522,099 142,470 155,124.9

Total Market capitalization 1,241,340.0 1887,177 974,950.0 1470,807.0


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(in million)

All Share Price Index2520.20 3747.53 10477.67 13,181.37

Source: (SEC Quarterly report and CSE Portfolio; July-Sep 2009, and Jan -March 2010)

The market billboard shows that the number of

listed securities reached to 415 in DSE and

217 in CSE. Issued Capital at DSE and CSE

amounted tk. 522,099 million and tk.

155,124.9 million respectively. Market

Capitalization reached at tk. 1887,177 million

and tk. 1470,807.0 million at the end of year in

DSE and CSE whereas the price index was3747.53 and 13,181.37

Indicators of Market Growth and Trend of

Market Performance of CSE:Literatures

provide no unique measure of indicators of

stock market development. Broadly used

indicators of stock market growth are market

size in terms of market capitalization,

liquidity of the market, degree of listing,

volatility in the market. In this study weexamine all these above mentioned indicators

to evaluate the growth pattern of Bangladesh

stock market mainly of CSE.

Stock market size:

Table - 04: Stock market size

Year Total Market Capitalization

(in million taka)

GDP (million tk) Market Capitalization

to GDP (%)

2002 131,730 2,732,010 4.82

2003 182,899 3,005,800 6.08

2004 439,934 3,329,730 13.21

2005 453,018 3,707,070 12.22

2006 593,879 4,157,280 14.28

2007 1,366,530 4,724,770 28.92

2008 1,708,765 5,458,220 31.53

2009 3,357,9846,147,950

54.61

Descriptive Statistics of Market capitalization to GDP

Mean 20.71

Standard deviation 16.78


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Market capitalization ratio equals the value of

listed shares divided by GDP. In terms of

economic significance, the assumption behind

market capitalization is that market size is

positively correlated with the ability to

mobilize capital and diversify risk on an

economy wide basis (Agarwal 2001). La

Porter et al. (1997, 1998) used the market

capitalization to GDP ratio as an indicator of

market development.

Above table shows the size of Bangladesh

stock market. Market Capitalization ratio has

increased from 14.28% in 2006 to 54.61% in

2009. Then the stock market experienced a

sudden growth in market capitalization in the

next two years, 28.92% in 2007 and nearly

31.53% in 2008.

Table -05 : Market Capitalization of CSE as a % of GDP

Year

Market Capitalization

(million tk) GDP (million tk)


to GDP (%)

2002 60,468 2,732,010 2.15

2003 85,312 3,005,800 2.8

2004 215,011 3,329,730 6.07

2005 220,353 3,707,070 5.61

2006 267,501 4,157,280 6.44

2007 612,479 4,724,770 12.00

2008 807,875 5,458,220 14.80

2009 1,470,807 6,147,950 23.92

2010 2,983,929 6,905,710 43.20

Mean 12.99

SD 13.24

Coefficient of

Skew ness 1.76

Source: Authors calculation from various issues of Bangladesh Economic Review, Statistical Year

Book of Bangladesh, DSE and CSE (main board) and Securities and Exchange Commission (Annual

report and quarterly review).

The CSE market capitalization showed a huge

growth in 2008. The share of CSE marketcapital in the total is also increasing. It has

reached almost half of the total market capital

in the year 2008.

Skew ness 1.30

Minimum 4.82

Maximum 54.61


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Table -06: Market capitalization in CSE, its growth and as a % of total (2002-2008)

Year Market Capitalization

(in million taka)

Growth of Market

Capitalization (%)

CSE MC as % of total

capitalization

2002 60,468 7.28 9.14

2003 85,312 41.09 8.68

2004 215,011 152.03 48.87

2005 220,353 2.48 48.60

2006 267,501 21.40 45.27

2007 613,175 129.22 44.87

2008 807,875 31.75 49.76

2009 1470,807 82.05 43.80

2010 1862,989 102.88 -

Mean 63.35

SD 55.02

Skew ness .51

Source: (CSE Profile, portfolio)

From the table it has been observed that

market capitalization has a tendency to grow

up over the passage of time. The highest

growth in market capitalization was 152.03%

in the year 2004. In the year 2008, the

secondary market experienced a steady rate of

growth.

Chart -01: Market capitalization in CSE


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0

200000

400000

600000

800000

10000001200000

1400000

1600000

1800000

2000000

2002

2003

2004

2005

2006

2007

2008

2009

2010

Year

(inmillio

n)

Mkt. Capitalization

Number of listed companies:

The second indicator of market size is the

number of companies listed. The rationale of

including this measure is that as the number of

listed company increases, available securities

and trading volume also increases. The table

below shows the number of listed companies

in both exchanges.

Table -07: Number of listed companies in DSE and CSE

Source: Bangladesh Economic Review, Chittagong Stock Exchange, Dhaka Stock Exchange and Securities and

Exchange Commission (Annual Report and quarterly review), various issues.

Year Number of Companies listed

Dhaka Stock Exchange Chittagong Stock Exchange

2001 249 177

2002 260 185

2003 267 196

2004 256 198

2005 286 210

2006 310 213

2007 350 227

2008 412 238

2009 415 217

2010

(March)

437 226


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Chart -02: Forecasted listed co. under

CSE

Forecasted Co. of CSE

0

50

100

150

200

250

300

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year

ListedCo.

Co. Actual

Co. Forecasted

Liquidity:

The ability of the market to buy or sell

securities is termed as liquidity. According to

(Agarwal, R, N, 2000) two measures aregenerally used to measure liquidity. They are

turnover (total value traded) in the stock

market as a ratio of:

(i) GDP; and(ii) Stock market capitalization.

The second measure is also called turnover

ratio. High turnover ratio is associated withlow transaction cost. It also denotes the degree

of activity on a stock market. The turnover

ratio gives the total value of shares traded in

relation to the size of the market.

Turnover to GDP equals total value of shares

traded on the stock market divided by GDP.

The total value traded ratio measures the

organized trading of equities as a share of

national output .The total value traded/GDP

ratio complements the market capitalization

ratio. Together, market capitalization and total

value traded/GDP inform us about market size

and liquidity. Table shows the liquidity

situation of Bangladesh stock market in terms

of total value traded to GDP ratio. The ratio

has increased form an insignificant number

(0.49) in 2002 to 2.64 % in 2009. Mean value

of 0.94 with a standard deviation of 0.88 for

the ratio imply that the increase is not even

smooth; there is a marked fluctuation in the

value traded to GDP ratio over the years.


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Table -08: Turnover and GDP

Year Turnover

(in million taka)

Annual Growth

(%)

As a % of GDP

2002 13,586 -9.17 0.49

2003 6,689 -50.53 0.22

2004 17,551 120.39 0.44

2005 14,043 -5.90 0.37

2006 15,893 18.64 0.39

2007 52,590 216.56 1.11

2008 99,804 92.53 1.86

2009 162,563 66.88 2.64

2010 (March) 60,737 - -

Descriptive Statistics

Mean 56.18 0.94

SD 86.35 0.88

Coefficient of Skewness .78 1.35

Minimum -50.53 0.22

Maximum 216.56 2.64

Source: CSE Portfolio

Turnover to Market capitalization of the CSE

is 22.46 in the year 2002 and decreasing

turnover results is declining ratio up to 2006

and afterwards 2007 turnover to market

capitalization is increasing but rate of

capitalization is higher than rate over turnover

increasing till 2009.


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Table - 09: Market capitalization and Turnover

Year Market

Capitalization(in

million taka)

Turnover

(in million taka)

Ratio of

Turnover to


2002 60,468 13,581 22.46

2003 85,312 6,719 7.88

2004 215,011 14,808 6.89

2005 220,353 13,933 6.32

2006 267,501 16,530 6.18

2007 613,175 52,328 8.53

2008 807,875 100,747 12.47

2009 1470,807 162,563 11.05

Mean 10.22

SD 5.43

Coefficient

of Skewness

1.97

Source: CSE Portfolio


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Table -10: Comparative Market Performance of CSE 2004-2010

S.N

.

Category 2004 2005 2006 2007 2008 2009 2010

1 No. of Securities

Listed

198 210 213 227 238 217 225

2. No. of trading days 271 263 231 237 238 244 244

3. No. of securities

traded

185 191 202 217 177 - -

4. Market

Capitalization

In million taka

215,011 220,353 267,501 613,175 807,875 1470807 2983929

5. Total Turnover

Value

In million taka

14,808 13,933 16,530 52,328 100,747 162019 340929

6. Turnover Volume

(shares 000)

332,534 308,901 330,662 652,254 972,811 133878 2129129

7. Average Daily

Turnover

In million taka

54.64 52.98 71.56 221 423.3 664.01 1397.25

8. No. of companies

declared cashdividend

135 161 113 116 92 28 72

9. Indices

CSE All Share Price

Index (CASPI)

CSE 30 Index

CSCX

3,598

3,466

-----

3,379

3,159

2,348

3,724

3,342

2,432

7,657

6,935

4,921

8,692

7,566

5,680

13181

10306

8560

23449

20988

15156

10. Market Cap. To

GDP (%)

6.07 5.61 6.44 12.00 14.91

11. Market P/E ratio 18.65 15.67 14.31 22.83 19.00

12. Turnover ratio (%) 6.87 6.37 6.19 8.53 12.47

13. Dividend Yield (%) 3.23 4.35 4.25 2.00 2.61


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#All Share Price Index is calculated on weighted average method.

Source: Chittagong Stock Exchange Profile & Portfolio Oct- Dec 2010

Market concentration:

It can be measured by looking at the share of

market capitalization accounted for by the large

stocks or large sectors. These large stocks are

seen as the leading 3 to 5 firms in the market

(Maunder et al. 1991). In many economies only

a few companies dominate the stock market

(Bundoo 1999). High concentration is not

desirable as it can adversely affect liquidity, and

it is common to find a negative correlation

between concentration and liquidity. To measure

the degree of market concentration, we compute

the share of market capitalization by largest 5

(Banking, Energy, Textiles & Clothing, Leasing,

and Eng. & Electrical) sectors, turnover by the

largest 4 sectors and by the largest banking

sector.

Table-11: Share of Market Capitalization (%)Banking Other 4 largest sectors Total

2006 52.7 32.53 85.23

2007 56.94 29.68 86.62

2008 43.14 38.15 81.29

2010 33.14 28.95 62.09

Source: Portfolio, Chittagong Stock Exchange

Turnover by the largest 5 sectors decreased from

83.59 % in 2006 to 67.18 % in 2010 whereas,

the turnover by the banking sector decreased

form 46.88 % in 2006 to 19.84% in 2008 and

again increased at 33.56% in 2010. Overall, the

Bangladesh stock market remains highly

concentrated to the banking sector in terms of

market capitalization and turnover but it is

decreasing and spread in different sectors which

is positive for stock market.

Table -12: Market Concentration: turnover by largest 4 sectors and largest sector in the CSE.

Concentration measures 2006 2007 2008 2010

Turn over by the largest 5 sectors (%) 83.59 78.78 72.02 67.18

Turnover by the largest sector (% ) 46.88 50.41 19.84 33.56



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Index in Stock market performance:

Stock index is a parameter for judging stock

market performance. It reflects the changes in

prices of securities as well as value of securities.

CSE determines three stocks indices-CSE All

Share Price Index, CSE-30 Index, CSCX Index.

Table -13: The quarterly changes in CSE All Share Price Index: 2010

Index Quarter 1 Quarter 2 Quarter 3 Quarter 4

CSE All Share Price Index 16193.99 18116.05 20729.79 23448.99

Growth rate (%) 0.11869 0.14428 0.13117354

Mean 19622.20

SD 3156.59

Range 2719.20

Coefficient of Variation 16.09 %

Maximum 23448.99

Minimum 16193.99


Table - 14: The changes in CSE-30: 2010


CSE-30 11017.18 14963.63 16602.88 20998.17

Growth Rate (%) 0.35821 0.10955 0.26473058

Mean 15895.47

SD 4131.34

Range 4395.29

Coefficient of Variation 25.99 %

Maximum 20998.17

Minimum 11017.18


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Table -15: The changes in CSCX: 2010


CSCX 10600.93 11694.38 13335.95 15156.37

Growth Rate (%) 0.10315 0.14037 0.13650471

Mean 12696.9075

SD 1987.923051

Range 1820.42

Coefficient of Variation 15.65674989

Maximum 15156.37

Minimum 10600.93


From the above table, it has been found that

stock index has changed quarterly at varying

degrees, including ups and downs in share prices

and securities over the periods. The changes in

stock index over the period have increased

consistently.

Analysis and Discussion:

The study on performance of stock market in

Bangladesh conducted on the basis market

capitalization, market liquidity, market

concentration, number of listings, market

turnover and market index for the last 8 years

from 2002 to 2009. On the basis of performance

factors we have found descriptive statistics of

individual factors which are discussed in earlier.

On the other hand we have found combined

effects of different variable on descriptive and

bi-variant

Table -16: Descriptive Statistics

Mean

Std.

Deviation N

Listed Co. 210.5 17.30 8

Turnover 47839.8 55845.58 8

Market

Capitalization 467562.75481111.20

8


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Turnover to

Capitalization10.22 5.43

8

Turnover to GDP .94 .88 8

Table 16&17 reports descriptive statistics and

correlation matrix among key development

indicators of Bangladesh stock market. Market

capitalization ratio is significantly correlated to

turnover, and turnover to GDP. Turnover also

significantly correlated to number of listed

companies, market capitalization, and turnover

to GDP, while turnover to capitalization is

negatively correlated to listed co. and market

capitalization.

Table -17: Correlation matrix among key indicators of stock market development

Listed

Co. Turnover

Market

Capitalization

Turnover to

Capitalization

Turnover

to GDP

Listed Co. Pearson

Correlation1 .858(*) .952(**) -.326 .826(*)

Sig. (2-tailed) .013 .001 .476 .022

Turnover Pearson

Correlation.858(*) 1 .955(**) .120 .995(**)

Sig. (2-tailed) .013 .001 .798 .000

Market

Capitalization

Pearson

Correlation.952(**) .955(**) 1 -.109 .945(**)

Sig. (2-tailed) .001 .001 .816 .001

Turnover to

Capitalization

Pearson

Correlation-.326 .120 -.109 1 .188

Sig. (2-tailed) .476 .798 .816 .686

Turnover to

GDP

Pearson

Correlation.826(*) .995(**) .945(**) .188 1

Sig. (2-tailed) .022 .000 .001 .686

* Correlation is significant at the 0.05 level (2-tailed).

** Correlation is significant at the 0.01 level (2-tailed).

Conclusion & Recommendation:


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From the study of evaluating the growth and

performance of Bangladeshstock market over

the last seven years in terms of some commonly

used indicators of stock market development.

Our analysis reveals that the Bangladeshs stock

market is growing in terms of market

capitalization to GDP, turn over ratio, turnover

to GDP and turnover to capitalization showed

market is not still stable enough. But there is a

chance to develop our stock market stable and

contribute to economic development of the

country. Our stock market is not stable enough

because of the following reasons:

Frequent changes in regulation of stockexchange by SEC

Unusual behavior of the money market; Lack of investment opportunity in the

industrial sectors;

Limited number of stock of Govt.owned company;

Demand of the share is higher than theavailable supply;

Lack of awareness about stock marketbehavior of small investors;

Profit making motives of institutionalinvestors.

Lack of govt. initiative to controlunusual transaction in DSE and CSE

Our stock market will grow overtime but the

stability is the important issues to the govt.,

investor, and different groups who have stake on

the stock market. So the people those are

involved in policy making level have to consider

different factors that may influence to the

performance of the CSE as well as total stock

market of the Bangladesh. Investors have to

have rational decision about investment,

regulation will not frequently changes, govt.

should have proper initiative to control and

ensure stable market growth.

References:

Agarwal(2001), Stock Market Growth an Economic

Growth: Preliminary Evidence from African

Countries,Journal of Sustainable Development in Africa

(JSDA).www.jsd-africa.com

Agarwal, R.N . (2000), Financial integration and stock

markets in developing countries: A study of growth,

volatility and efficiency in the Indian stock market,

Institute of economic Growth, Delhi, India in its series

Institute of Economic Growth, Delhi discussion Papers,

(21).

Ahmed M F, Jahur M S, Uddin MJ (1998), Evaluation of

Stock market performance in Bangladesh- A case study

of Chittagong Stock Exchange, CSE portfolio, (January

March):1.

Ahmed S (2005), Reviving the role of regulators in

Bangladesh Capital market, Pakistan journal of social

science 3(4):549-553.
http://ideas.repec.org/s/ind/iegddp.htmlhttp://ideas.repec.org/s/ind/iegddp.html


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Akhter S, Misir A, and Ahmed S (2005), Capital markets

development in Bangladesh the status of DSE, Pakistan

journal of social science, 3(8):1002-1006.

Bepari, M K &Mollik, A. (2008), Bangladesh stock

market growing? Key indicators based assessment,

online publication.

Bundoo, S. K. (1999), The Mauritius Stock Exchange:

An Assessment ,Social Sciences & Humanities and Law

& Management Research Journal, University of

Mauritius, Muritius, 5(1): 12-15

Demirguc-Kunt, A. & Levine, R. (1996), Stock Market

Growth and Financial Intermediaries: stylized Facts,

The World Bank Economic Review, 10 (2):291- 232.

Ripon K A I (2007), Stock market of Bangladesh, The

financial express, (June 18):7.

Hassan M K, Islam A M, Basher S A

(2000), Market efficiency, time varying volatility and

equity returns in Bangladesh stock market.

Islam, M.A. Ali, R. and Ahmad, Z. (2010),

Underpricing of IPOs: The Case of Bangladesh, Global

Economy and Finance Journal Vol. 3 No. 1 March2010,

Pp. 44-61.

Levine R. and Zervos S. (1998), Stock markets, bank,

and economic growth, AmericanEconomic Review,

(June):537-558.

Maunder, P., Myers, D., Wall, N. & Miller, R. (1991),

Economics Explained, 2nd edition, London:

HarperCollins.

Porter, L., Lopez-de-Silanes, R., Shlieifer, F. A.

&Vishny, R.W. (1997), Legal Determinants of External

Finance ",Journal of Finance, 54(1): 471 517.

Simu T H (2009), Reasons behind fluctuations of Stock

market in Bangladesh: A study on CSE, Unpublished

Master thesis, Department of Business Administration,

Shahjalal University Science and Technology, Sylhet-

3114.Singh A. (1997). Financial Liberalization, Stock

Markets and Economic Development, Economic

Journal,107(1):771-782.

Standard and poor (2005), Global Stock Market Fact

book 2005,New York: Standard and Poor.

Yartey, C. A. (2008), The Determinants of Stock Market

Development in Emerging Economies: Is South Africa

Different?,IMF working paper, WP 08/32.

Reports review:

Bangladesh Economic Review, various issues (2006,

2007, 2008, 2009, 2010)

Security exchange commission Annual reports, various

issues (2008-2009)

Security exchange commission Quarterly reports, various

issues (2008-2009)

DSE portfolio, various issues (2002-2010)

CSE Bazaar Paricroma, various issues (2002-2010)

CSE portfolio, various issues (2002-2010)

CSE profile, various issues (2002-2010)


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Enterprise Resource Planning for Competitive Business

World

Author:

Asadul Alam

Abstract:

Today large companies use different kind of ERP package to support their business needs.Some of these packages can be used out of box or customized. The types of ERP packagesavailable in the market include Oracle, SAP, and People Soft etc. These are implemented at

different part of organization such as Finance, Human Resource, Material Management anddifferent type industry such as oil, gas, defense, financial etc. By studying differentliteratures and case studies we tried to figure out the pros and cons

of the enterprise resource planning Software.

.

Introduction:

There are many literature review and case study on

different journal. We chose one from each category

to figure out the ERP impact on the business.

Literature Review and Case Study:

Software is expected to reduce cost and increase

firm performance. This is observed (3, 4)

through the data of COMPUSTAT

implementation of ERP system. (8-11)

ERP offers two type of benefits-tangible and (4)

intangible benefit according to the study.

Tangible enefits include significant inventory

and personal reduction, production and order

management improvement, financial close cycle,

technology and procure management reduction.

Intangible benefits according to the study are


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visibility, new or improved process, customer

responsiveness, cost reduction, integration, and

standardization. But some firm (5-7) states (5-7)

high cost of implementation, best practice

inabilities to suite all companies needs, ERP

poses technical command and control

perspective inappropriate to some situation.

ERP particularly on economic part reduce

agency cost by bonding and monitoring cost,

decision information cost by information

processing, documentation, communication,

opportunities cost due to communication. It also

reduces external communication and operational

cost.

Firm data collected and analyzed using

COMPUSTAT indicate result before and after

(3, 4) ERP implementation by ratio of cost to

revenue there is no significant change except

employee reduction and it automate the process.

Another case study shows ERP brings panoptic

control of management over the organization but

on the other hand it empower employee which

management resisted. Both qualititative and

quantities research methodology used in the

research including a case study on hospitalworker of Singapore.

These groups finds using qualititative

methodology and quantatives methodology that

it creates more system tracking capability,

Management visibility, Peer visibility through

work flow dependency and data

interdependency. It also creates process oriented

job expansion, extended access to information,

enhanced user flexibility and reduced validation

check.

In conclusion it is mention that to be adjustable

to the organization it has to appropriate and

formally translated up to the organization.

Approach has certain standard steps to

implement ERP system according to this case

study. First of all according to the study, we

have to create business case, and then create a

budget. Sequentially we have to create

requirement documents and short list of solution

or product available in the market.

Finally we have to see the demonstration from

different vendor and call for request of proposal.The main factors we have to look in ROP are

shortest return of investment, vendor

availability, implementation partner and

references. Considering the above we have to

negotiate the contract. These are the standard

ways to select and plan the ERP system for the

organization.

CONCLUSION:

Though there is controversy about SAP

implementation benefit 70% of fortune 1000

companies already installed within the year


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2000.This project first try to stress about both

financial and organization benefits in term of

cost. Finally it on the process of most used ERP

software functional implementation with

planning phase where detail blue print and

implementation will be done on the phase.

Sample deliverable also provided with the

documentation to have sound understanding of

the project.

References:

Poston, R., Grab ski, S.,In impact of Enterprise

Resource System Planning on firm performance

International Conference on Information Systems,2000

Sia, S,K., Tang,M.,Soh,C., Boh,W,F.,Enterprise

Resource Planning (ERP) as a technology of power

or panoptic control, SIGMIS Database, 2002

Gurbaxani, V., and Whang, S. The Impact of

Information Systems on Organizations and Markets,

Communications of the ACM (34:1), 1991, pp. 59-

73.

Malone, T., Yates, F., and Benjamin, R. Electronic

Markets and Electronic Hierarchies,

Communications of the ACM (6), 1987, pp. 485-497.

Davenport, T. H. Mission CriticalRealizing the

Promise of Enterprise Systems, Boston: Harvard

Business School Press, 2000.Fryer, B. The ROI

Challenge, CFO, September 1999, pp. 85-90.

Knorr, E. ERPs Rough Waters, Upside, December

1999, pp. 209-213.

Arnold, V., Hunton, J., and Sutton, S. On the Death

and Dying of Originality in the Workplace: A Critical

View of Enterprise Resource Planning Systems

Impact on Workers and the Work Environment,

Working Paper, University of South Florida, 2000.

Harris, S. E., and Katz, J. L. OrganizationalPerformance and Information Technology Intensity

in the Insurance Industry, Organization Science

(2:3), 1991, pp. 263-295.

Simon, H. A. A Behavioral Model of Rational

Choice, Quarterly Journal of Economics (69),

February 1955, pp. 99-118.

Zmud, R. W., and Apple, L. E. Measuring

Technology Incorporation/Infusion, The Journal Of

Product Innovation Management (9:2), 1992, pp.

148-156.

Cash, J. I., and Konsynski, B. IS Redraws

Competitive Boundaries, Harvard Business Review

(64:2), 1985, pp. 134-142. Coase, R. H. The Nature

of the Firm, Economica(4), 1937, pp. 386-405.
http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81100137654&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81100640513&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81100202157&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81324488125&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81324488125&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81100202157&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81100640513&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084http://www.ezproxy.dsu.edu:2053/author_page.cfm?id=81100137654&coll=ACM&dl=ACM&CFID=14564779&CFTOKEN=23477084


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Women Entrepreneurship Education in Economic

Development

Author:

MAIMUNA MUSARRAT

Abstract

Women Entrepreneurship is an emerging issue that has gained much momentum in recent

years. Even in developing South Asian countries like Bangladesh, women entrepreneurs are

playing an important role in the economic development of their respective nations.

However, there has been little research conducted on women entrepreneurs, and thus there

is a lack of accurate data from most perspectives on this issue. It is generally assumed that

education is an important factor behind developing entrepreneurship. However, to what

extent this statement is true, is subject to thorough investigation. Added to this, arises the

question of the necessity of any special education need for potential entrepreneurs. These

are the major problems that acted as the background of this study. Thus, this report also

focuses on the major issues related with entrepreneurship, education and tries to create a

bridge between the two.Asian University for Women (AUW) is a unique university targeted

to produce next generation women leaders. Located in Chittagong, it has a blend of students


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from diverse backgrounds from all over South Asia.

Introduction:

Women are comparatively less involve business

Entrepreneurship. We tried to figure out how this

can improve with the help of formal and

entrepreneurship education in developing.

Objectives of the study:

This research was mainly based on the following

objectives:

To present a picture of the overallsituation of women entrepreneurship in

South Asian regions.

To evaluate the significance ofeducation as a factor behind developing

entrepreneurial capabilities

To find out the importance andprospects of entrepreneurship education

in this region To introduce the readers with AUW and

provide suggestions on how AUW can

integrate entrepreneurship education as

part of its curriculum

Methodology:

The data for conducting the study has beencollected from primary sources as well as

secondary sources. During the three-month

internship period, it was possible to meet various

successful women entrepreneur who visited

AUW on various occasions. The students also

were surveyed for information related to

entrepreneurship. Primary data was collected by

administering written questionnaire, as well asconducting oral interview. Secondary

information has been collected from various

articles, mostly from online sources. Different

statistical methods were used to organize the

data collected, such as charts, graphs etc.

Scope of the study:

This study reports the results of study conducted

among various women entrepreneurs, mainly

based in Chittagong, on their opinion about

education and its significance in developing

entrepreneurial capabilities. This report also tries


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to reveal the importance of entrepreneurship

education and its scope as a distinct subject in

the tertiary level of education, focusing mainly

on Asian University for Women.

Limitations of the study:

Though the staff and employees, as well as the

respondents from Asian University for Women

were most helpful and provided me with any and

every data I needed, it is still necessary to

inform that there remains many limitations ofthe study:

It must be mentioned that conductingsuch research with proper emphasis in

all necessary fields requires much more

time than the three-month period of

internship duration. Time constraint was

a major limitation.

The organization is still at its developingstage; so, much of the information

regarding the organization is yet to be

available. Moreover, the internship

experience in this organization covered

many other diverse areas, providing less

time and scope for thorough research.

The students were available after mid-April, and thus there was very little time

to collect info from the students.

Data collection was not that easy as previously thought. There is very little

information available regarding women

entrepreneurs, and moreover, these are

not availed to all. Besides, it was not

possible to get women entrepreneurs at

one place and collect information. Thus

most of the information was collected

from scattered sources.

Women Entrepreneurship in South Asia

Region: The following figure show womenemployers in developing countries:

Table 1: Employment status percentage of women and men who are employers

Country Male Female

Bangladesh (1995-96) 0.4 0.1

Nepal (1991) 0.7 0.4

Pakistan (2001-02) 0.9 0.3

Sri Lanka (1998) 2.5 0.8

Maldives (2000) 4.5 1.1


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Sources: Bangladesh Bureau of Statistics, 1996; Central Bureau of Statistics, Population Census of Nepal,

1991; Federal Bureau of Statistics, Pakistan, 2001-02; Government of Sri Lanka, 1998; and Population

and Housing Census, Maldives, 2000.

From the above, it can be noted that although

statistics are lacking, the number of women

entrepreneurs either in absolute or relative terms

have not reached the critical mass necessary to

make an impact on the system.

The subtle manifestation of the gender

phenomenon is often reflected in the size of thebusiness, product line, growth, composition and

management, which can be seen from the profile

of women entrepreneurs described in the next

section. A typical woman entrepreneurs

enterprise is very small, in traditional

manufacturing activities, with low turnovers, a

low number of employees and no professional

assistancei.

Significance of Education:

However, not much has been done to link

education, particularly General Education, with

Entrepreneurship. Whatever data available, is

only based on the ENTREPRENEURSHIP

EDUCATION, which is a distinct field of

education, focusing on educating potential

entrepreneurs only.

However, we have tried to gather some primary

data through interviewing students, prospective

and established women entrepreneurs. Thus we

tried to create the link, focusing solely on

women entrepreneurship, and general academic

education. Different questionnaires (provided at

the Appendix) were developed and distributed

among entrepreneurs of different level and

students of AUW and other universities of

Chittagong. Thus they shared their ideas, which

helped us create the link.


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Findings:

We conducted our research on different categories of people:

Category Sample Size Response (Percentage)

Students of Graduate studies 30 100%

Entrepreneurs 25 98%

From our research conducted onundergraduate students, we found that:

53% of the students at tertiary level ofeducation wish to become entrepreneurs,

while the remaining 47% prefer job to

entrepreneurship.

Of these, 62% are confident about starting their

enterprise with the level of education they have

so far received.

67% of the students absolutely agreedwith the statement education is

required to become an entrepreneur,

while 33% fairly agreed with this

statement. However, no one disagreed,

or even showed their neutral position

about agreement on this statement.


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77% students think that they wouldrequire training before becoming

entrepreneur, while the other 23% think

they would not.

Those with less education face moreproblems in entrepreneurship than those

with higher education- level of

agreement of students with this

statement, and corresponding percentage

is as following:

o Absolutely 43%o Fairly Agree 47%

o Neutral 10%

o Disagree/Highly disagree 0%

1. From our research conducted onentrepreneurs, we found that:

83% of the interviewed womenentrepreneurs think that lack of

education is a significant barrier behind

developing entrepreneurship. The

remaining 17% think otherwise, stating

that other skills can still compensate foreducation.

Considering academic background ofEntrepreneurs:

o 44% of the entrepreneurs hadcompleted up to HigherSecondary or below

o 22% of the entrepreneurs weregraduate


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o 33% of the entrepreneurs were

post-graduates.

Of the women entrepreneurs

interviewed, 43% received training to

some degree, while the remaining 57%

did not.

57% of the entrepreneurs interviewedthink that education is required for


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entrepreneurship development. 14%

think it is not, while the remaining 29%

think that education is not a

requirement, but a plus-point, for

entrepreneurship development

Those with less education face moreproblems in entrepreneurship than those

with higher education- level of

agreement of entrepreneurs with this

statement, and corresponding percentage

is as following:

o Absolutely 42%o Fairly Agree 33%o Neutral 25%o Disagree/Highly Disagree 0%


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28

Analysis:

Before conducting this study, we assumed that

those with higher academic degrees are more

UNLIKELY to become entrepreneurs, as it may

not pay them back as much as they could earn

from their jobs. People in this region are generally

known to be risk-averse, and so they would go for

more certain ways of earning.

However, our findings showed somewhat

different results:

People with tertiary education are equallylikely to become entrepreneurs, although

they do have good alternative job

opportunities.

The reasons behind this include:o Control over time: Most job

positions require a huge amount

of time to be spent at the office.

However, owning their own

enterprise provides the

entrepreneurs the opportunity to

have control over their own time,

and thus allowing them to

manage their time efficiently

between family responsibilities,

as well as economic activities

o Self-dependence: The mainpurpose of education is liberation.

Most educated people are liberal

minded and thus they do not will

to be dependent on others for

their earnings.

o Expression of creativity: Someentrepreneurs/students added that

they wished/wish to express theircreativity through

entrepreneurship.

o Shrinking job opportunities:Some students are concerned that

with the rising number of

educational institutes, and thereby

graduates, most of the job sectors

are becoming competitive. Thus,a suitable job placement might

not be available for them, leaving

entrepreneurship as the best

alternative.

o Community service: Studentsfrom different parts of the world

expressed their intention to serve

their community, especiallywomen. Becoming a successful

women entrepreneur and

providing job opportunities for

capable women would enable

them to do so.

o Control over environment: Somestudents expressed their concern

that a possible job opportunitymight not provide them with a

congenial environment. Being

women was a reason they

showed, while another reason was

the religion they practice. Thus,

in their eyes, being an

entrepreneur is a better

alternative.


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29

Students from different majors, even otherthan those related with Business Studies

(e.g. Environmental Studies, English

Language and Literature, IT, Education,

etc), are equally willing to become

entrepreneurs.

Most students, even those withbackground of studying Business to some

degree, think they require additional

training and/or education, to gain more

insight into entrepreneurship.

Most people agreed that higher educationopens up more avenues towards success

in entrepreneurship. That is another

reason educated people are still willing to

become entrepreneurs.

Suggested subjects that would-beentrepreneurs should be taught include:

o Basic Accountingo Principles of Marketingo Entrepreneurship Developmento Business law and government

policies

o Social studies and CommunityStudies

o Supply Chain Managemento Consumer Behavior/Psychologyo Human Resource Managemento Organizational Behavioro Strategic Managemento Business Communicationo International Relationso Communicative Englisho Computer and Internet LiteracyBesides these, most entrepreneurs

emphasized that entrepreneurs and

potential entrepreneurs should be

always kept abreast with the changing

global environment.

From the above study, we have tried to create a

link between education and entrepreneurship,

keeping women as the main focus. Our study

shows that though experience does count,

education is still an important factor behind

entrepreneurship. Entrepreneurs with high

academic background tend to come up with more

innovative ideas and thus enjoy a higher rate of

success. What was interesting to find is the fact

that job is not the main priority for most educated

women. Women these days are equally (in some

cases, more) interested in developing

entrepreneurship, than ever before.

So far, our discussion has been based on general

education. Although the concept of

Entrepreneurship Education is yet to be

introduced in this region, we believe, in the

changing socio-economic scenario it has good

prospects. Our intention is to show how

Entrepreneurship Education can be an important

field of education. The following chapter is thus

dedicated to this topic.

Benefit of E. Education:

Education as an aiding factor for developing

entrepreneurship:

Entrepreneurship education provides the

knowledge and skills in areas such as marketing,

organizational behavior, etc. that enable the

entrepreneurs to be more successful. Though


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30

experience is an important tool, education cannot

be denied as a wholeii:

Education may show you how to avoidpitfalls

Although there is no need to claim that a

major in entrepreneurship will definitely turn

into a successful entrepreneur, learning how

to write a realistic business plan, seeing how

venture capitalists actually operate and just

observing successful entrepreneurs in action

may at least show the students ofentrepreneurial education some of the pitfalls

and how to avoid them.

Entrepreneurial education does seem tohave a definite cash return

But in any case, entrepreneurial education

does seem to have definite cash return on

investment. Academics from the University of

Arizona carried out a survey for the Kauffman

Foundation tracking the career progression of

graduates of entrepreneurial programs.

Admittedly, this covered the period 1985-

1999, an epoch marked, especially towards

the end, by some irrational entrepreneurial

and VC behavior. Even so, they found thatcompared to other alumni students of

entrepreneurship courses tended to make more

money and their firms to grow more rapidly.

They were also more likely to work for high-

tech companies and to be instrumental in new-

product development.

The study found that after controlling for

personal and environmental factors,

entrepreneurship education increased the

probability of being involved in a new

business venture by 25 per cent

Three times more likely to be self-employed

It also found the students of entrepreneurial

education were three times more likely to be

self-employed, more likely to be employed

full time, and less likely to work for

government or non-profit entities, and to have

annual incomes 27 per cent higher and own

62 per cent more assets.

Income of the graduates higherControlling for personal characteristics,

entrepreneurship education increases the

income of graduates by $12,654, the studys

authors deduced. Controlling for individual

characteristics, entrepreneurship graduates

working for large firms earned about $23,500

more than their counterparts. So, even though

entrepreneurship education will not

necessarily make a graduate another Bill

Gates, maybe that entrepreneurial course

may be useful in the long term. With

entrepreneurship education, they know more,

others (like bankers, investors, corporate

customers, etc.) know what these student

entrepreneurs are likely to know, and the

entrepreneurs', their firms, and national


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31

economy are better off for their taking the

time to learn how to do it right.

This study indicates that entrepreneurial education

is important in many ways to create successful

entrepreneurs and also to keep them running on

profit.

Recommendations for Asian University for

Women

Activities already undertaken by AUW:

The Student Affairs Department of Access

Academy of Asian University for Women have

already conducted various programs for

incorporating leadership skills and entrepreneurial

capabilities among its students:Guest Speakers:

Renowned guest speakers from all over the world

have been invited to speak on various topics that

would benefit the students. So far, topics such as

Empowerment of Women through

Entrepreneurship Development and

Leadership: The four pillars of leadership

have already been discussed by nationally and

internationally acclaimed speakers.

Workshops: Access Academy hasalready been conducting workshops

where students had the chance to interact

with renowned presenters. Such a

workshop was conducted on Career

Counseling where students got a chanceto create awareness about choosing their

right career.

Networking: AUW has strong networkwith other organizations. Chittagong

Women Chamber of Commerce and

Industries is such an organization, where

students

were invited to visit and have directinteraction with established entrepreneurs.

Extra Curricular Clubs: Student AffairsDivision has already formed different

clubs where it is mandatory for students

to participate (at least 1 and at best 2).

There are clubs of diverse interest groups,

including business club where students

can interact about their ideas on forming a

new venture.

Student Government: Students ofAccess Academy of Asian University for

Women also formed Students

Government through direct election

among students. The purpose of this

election is to create a structured and

systematic channel for respectful, honest,

and open communication between the

student body and the Access Academys

administration. It is also expected that

student government will give students a

direct role in educational and social

opportunities, incorporating leadership

qualities among them.

Conclusion:

Entrepreneurship is a trend in the recent days for

women all over the world. Women of the

developing countries of South Asia are also

keeping in pace with this trend. The general

impression that educated women are not potential


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32

entrepreneurs, is changing. More educated women

are being involved in entrepreneurship in the

recent days. Education cannot be denied as a

significant factor behind entrepreneurship.

General education provides the confidence and the

innovativeness for becoming an entrepreneur.

However, entrepreneurs would be more efficient

and succeed at a higher rate, if provided with

education focused on entrepreneurship.

Entrepreneurship Education is a growing trend

worldwide as a distinct field of education. Yet to

be introduced with an equal emphasis in South

Asia, it can be a highly potential field of study.

AUW, being a unique university can be the

pioneer in introducing and promoting

Entrepreneurship Education.

References:

www.asian-university.org

http://en.wikipedia.org/wiki/Entrepreneurship

http://siteresources.worldbank.org/PGLP/Resources/En

trepreneurship_Oct17.doc

Understanding entrepreneurship: Developing indicators

for international comparisons and assessments,

OECED, STD/CSTAT, 2006

The Global Entrepreneurship Monitor (GEM) 2006

Report on Women and Entrepreneurship, Babson

College, and London Business School, 2007

OECD, Enhancing Womens Market Access and

Promoting Pro-poor Growth, Promoting Pro-Poor

Growth, Private Sector Development, Chapter 5, 2006.

DEVELOPING WOMEN ENTREPRENEURS IN

SOUTH ASIA: ISSUES, INITIATIVES AND

EXPERIENCES by ShaliniSinha

Trade and Investment Division, UNESCAP, Bangkok,

Thailand

Copyright UNESCAP 2005

Ibid.

Ibid

Ibid.

Ibid.

Ibid.

http://www.123eng.com/forum/viewtopic.php?p=1830

4

State of World Population 2005: Journalists Press Kit

[http://www.unfpa.org/swp/2005/presskit/factsheets/fac

ts_gender.htm]

http://en.wikipedia.org/wiki/Entrepreneurship_educatio

n

Economist Intelligence Unit 2007. "Can business schools create entrepreneurs?"

Which MBA, 17/04/2007

[http://www.ictseminar.org/Netgrowth/ICTWorkshop/]

Ibid.

http://www.ediindia.org/

Ibid.

http://www.emiindia.org/

http://www.safeer.info/index1.html
http://www.safeer.info/index1.html


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33

Management of Government Banking in The Third World

country: a case study on Agricultural Bank-Problems and

Remedies

Authors:

Dr. Md. Nurul Alam

Dr. Zahrurl Alam

Mrs. Sharmeen Ahmed

Abstract

Bangladesh Krishi Bank (BKB) consistently has pursued the policy of expansion and growth of

branches. But it is advocated that its performance is not highly satisfactory. There might be

many reasons behind it. Among them, the problems involved in management might be a major

one which needs to be identified. This paper aims at identifying the problems involved in

management at operative level of the BKB. The study reveals that BKBs performances is

plainly satisfactory but it is facing a lot of problems relating to management which are overdue

loan, lack of investment opportunity, lengthy and cumbersome procedure in obtaining loan,

competition with the non-government organizations (NGOs),lack of proper borrower selection,

in- adequate legal authority in taking action against the defaulters, lack of co-operation from

government officials, lack of supervision, economic crisis of the borrowers, loan remission

culture, shortage of manpower, undue local political pressure and interference, lack of good

communication, illegal interference by the superior officer and lack of cash holding capacity,

etc. To improve the present performance of the BKB problems mentioned above should be

removed and in this regard suggested recommendations may be accepted and implemented.

1.1 Introduction:


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Agriculture is the main stay of Bangladesh

economy. About 20.80 percent of Gross Domestic

Product (GDP) comes from agriculture and agro

related industries (Bangladesh Bank Annual

Report 2008-09, p. 195). More than 80percent of

the total population of Bangladesh lives in the

villages (Population Censes 1991) and a vast

majority of them depend directly on agriculture

and related activities for their livelihood. Besides,

about 48.1 percent of the total labor forces of the

country are engaged in agriculture (Bangladesh

Economic Review, 2008, p. 83). These facts

clearly emphasize the importance of agricultural

sector in the economy of the country. But so far

this important sector has been suffering from

dearth of capacity both for development and for

inputs. With the introduction of seed based

technology in agriculture that requires more and

more purchased inputs, the need for credit

becomes more acute. But only about 25 percent of

the requirement is being supplied by the

institutional sources of credit (The Two Year Plan

1978-80, p.146). The vast majority of the farmers

need credit to purchase agricultural inputs such as

seeds, fertilizer, insecticides and irrigation and

agricultural equipment. They need credit for

payment of wages also. The transfer of traditional

agriculture into modern high productive

agriculture increases the requirement of credit

(The First Five Year Plan 173-78, p.169). The

introduction of modern methods of agriculture has

greatly increased the demand for credit.

Responding to the increasing demand for credit, in

addition to the credit disbursed by the Bangladesh

Krishi Bank (BKB) and the Bangladesh Samabaya

Bank Ltd. (BSBL), the Government of

Bangladesh launched a special agricultural credit

program in 1977 with a national target to disburse

taka 100 crore. In addition to BKB, six

Nationalized Commercial Banks (NCBs)

participated in the program.

At present, the main sources of credit in

agriculture are four State owned Commercial

Banks (SCBs previous name NCBs) namely

Sonali, Janata, Agrani and Rupali Bank, two

specialized banks namely Bangladesh Krishi Bank

and RajshahiKrishiUnnyan Bank (RKUB),

Bangladesh Samabaya Bank Ltd. (BSBL), and

Bangladesh Rural Development Board (BRDB).

BKB have the largest share in annual

disbursement of agricultural and rural credit. In

FY 2009 BKB alone disbursed around 51.86% of

the total disbursement ofagricultural credit

(Bangladesh Bank Annual Report 2009-10).

Amongst the institutional sources mentioned

above ,BKBs overall importance in the financial

sector can be understood by the fact that it covers

about 60% of the total institutional loans extended

to agriculture and related activities of the country

( GOB & The Would Bank 1983). Moreover,

BKB plays an important role in mobilization of

the countrys scattered savings and in creating

employment opportunities for the unemployed

people of the country.

But it is advocated that the performance of the

BKB is not highly satisfactory. The amount of its

overdue loans is gradually increasing. There

might be many causes contributing to this

performance of the BKB. Among these, problems

of management might be a major one. Many

researches have been done on financial

institutions covering performance, profitability


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35

and productivity. But there is a dearth of research

attempting to interpret the problems of

management. This gap of research stimulated the

authors to undertake a study to know the problems

of management of the BKB, more especially the

problems of its operative level. It is expected that

the findings of the study may help the concerned

policy- makers to look into the aspect in its real

perspective.

1.2 Objectives of the Study

The main objective of the present study is toidentify the problems involved in management at

operative level of the BKB. The specific

objectives of the study are:

i) To show the management pattern of the BKB;

ii) To review the business scenario of the BKB;

iii) To identify the problems involved in

management at operation level of the BKB;

and

iv) To suggest some remedial actions to overcome

the same.

1.3 Methodology of the Study

The study is based upon the information collected

from both primary and secondary sources. The

data collected from secondary sources were

required to fulfill the objectives of management

pattern and business scenario of the BKB. The

secondary data were collected by way of

consulting various documents such as BKB Order

1973, Bangladesh Bank (BB) annual reports of the

BKB, Annual reports and annual consolidated

statements of deposits, statement of loan

disbursement, statement of loan recovery and

overdue loans prepared by BKB Chittagong

Divisional Office. For the remaining objectives,

data were collected from a carefully designed

sample survey. For this purpose, first of all the

BKB branches operating in Chittagong district

were divided into three categories viz. higher,

medium and lower disbursement categories

according to the amount of loan disbursement

during the FY 2008-2009. Then it was planned to

select a few BKB branches in the equal

representation from all the categories having

locational advantage for easy contact with the

people. On the basis of these criteria, nineteen

BKB branches comprising nearly 30% of the total

branches located in Chittagong district was

purposively selected. After selecting the branches,

nineteen managers, nineteen second officers and

nineteen field officers of the selected BKB

branches were interviewed. All the managers, the

second officers and the field officers of the

selected nineteen branches were interviewed

separately to know their independent views about

their problems with the help of interview

schedule. Every schedule contained both closed

and open-end questions. During the interview, the

authors themselves fill up the questionnaire. The

data processing work included editing and manual

tabulating of the surveyed data. Editing was done

to ensure whether the interview schedules were

fully and correctly completed and that the facts

recorded were consistent with one another. The

editing work was done by the authors themselves.


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Tabulation was done manually and simple

statistical tools like mean, standard deviation,

range and percentages were computed for

analyzing the data making more meaningful to the

readers.

2. BKB: An Overview

2.1 Legal Status & Nature of Business

Bangladesh Krishi Bank (BKB) was established

as a fully government owned bank under the

Presidential Order No. 27 of 1973. It is infact, the

successor of former Agricultural Development

Bank of Pakistan (ADBP) that was established in

1961 by the merger of Agricultural Development

Finance Corporation (ADFC) established in 1952

and Agricultural Bank of Pakistan (ABP)

established in 1957. After liberation ADBP

became Agricultural Development Bank of

Bangladesh (ADBB) and subsequently renamed

as the Bangladesh Krishi Bank in April, 1973.

The vision of the BKB is to ensure real economic

development of the country through providing

necessary loan facilities to the farmers in

developing and expanding agriculture and agro-

based activities and to the entrepreneurs of agro-

based and cottage industries in order todiversification and commercialization of

agricultural products and for strengthening rural

economy. The authorized and paid up capital of

the bank was Tk. 15,000 million and Tk. 9000

million respectively as on 31 March, 2010

(Activities of Bank and Financial Institutions

2009-10, p.213). The responsibility of the BKB

affairs and overall business operation and

administration are vested with the Board of

Directors. The Board of Directors consists of 11

members including chairman. BKB is authorized

to perform normal banking functions such as

accepting deposits, borrowing money, issuing and

selling bonds/debentures etc. BKB is the second

largest financial institution in Bangladesh which

has 952 branches and 10078 employeesupto 31

March, 2010 throughout the country (Ibid). There

are about 3188 thousand loanees throughout

Bangladesh under different loan portfolios (BKB:

Annual report 2008-09, p. 16). Available statistics

indicate that loan provided by the BKB for

different purposes increased from year to year and

stood at Tk. 6955 core in 2010. BKB provides

loans to individuals and corporate bodies related

to production of crops, Purchase of irrigation

machinery and agriculture equipment,

development of horticulture, pisciculture and

animal husbandry (Ibid, p. 37). In addition, BKB

has launched a good number of special poverty

alleviation and micro-credit programs, which

include: credit program towards landless and

marginal farmers, beef fattening program,

Shawnirvar credit program, development project

for small farmers and landless labour, South Asian

poverty alleviation program, UN capital

development program, employment generation

project for village women, BKB-NGO micro-

credit program, poverty alleviation program

through goat rearing, credit program for cow

rearing of the women, special micro-credit

program for the development of handicaps, micro-

enterprise development for the monipuri credit

program and special credit program for Rakhain


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37

community lived at Coxs Bazar district (Ibid, p.

19). The principal activities of the BKB is to

provide credit to landless persons and persons

having lands who are engaged in agricultural and

other income generating activities to help increase

agricultural output and to remove poverty from

the country by improving socio-economic

conditions of the poor people and also accepting

money on deposit, borrowing money for the

purpose of the banks business from Bangladesh

Bank (BB) and providing professional counsel to

landless clients regarding investment in small

trade and cottage industries.

2.2 Objectives of the BKB

BKB was established to provide credit facilities to

the farmers and persons engaged in cottage

industries with a view to increasing and

improving both agricultural and industrial

production. In transacting its business, the bank

acts on commercial consideration but gives

preference to the credit needs of the small

farmers. However, the main objectives of the

BKB are:

i) To provide credit facilities and technical

consultations to the persons who are engaged in

agriculture and agro-based economic development

by increasing national production.

ii) To perform all the transactions including

general transactions and raise saving to

formulate capital of its own and to invest this

capital for national progress.

iii) To promote cottage and other allied industries

in rural and urban areas.

iv)To assist farmers in adopting appropriate

technologies under the banks

supervision.

v) To earn a normal profit for meeting the

operational expenses.

vi) To create employment opportunities for

solving the problems of unemployment of

the country.

2.3. Management Pattern of the BKB

According to the BKB Order, 1973 (Presidential

Order No. 27 of 1973), the responsibility of theBKB affairs and overall business operation and

administration were vested with the Board of

Directors. Initially the Board of Directors of the

BKB consisted of 7 directors including the

Managing Director as Chairman, four officials -

one each from the Ministry of Agriculture and

Forest, the Ministry of Fisheries and livestock and

the Bangladesh Bank and two non-officialsnominated by the Ministry of Finance. In April,

1981 the government of Bangladesh decided to

separate office of the Chairman and Managing

Director to appoint a non official director as

Chairman of the board whereas the managing

director remained the chief executive of the bank.

Accordingly the BKB Order, 1973 was amended.

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