Prime Bank committed to tailoring banking solutions specifically for CMSMEs
In an interview with The Business Standard, M Nazeem A Choudhury, deputy managing director of Prime Bank PLC, discusses how the organisation is empowering small enterprises to achieve their goals through innovative lending products, provides strategies for reducing the funding discrepancy between urban and rural SMEs, and how the bank aims to further support SMEs in the future
Prime Bank joined the SME Finance Forum in 2020. How has this partnership helped the bank support small businesses since then?
Since joining the SME Finance Forum in 2020, Prime Bank has greatly enhanced its support for small businesses. The platform provides employees with access to continuous learning materials and regular webinars, helping them stay ahead of industry trends and implement global best practices tailored to our local context.
We are proud to share that Prime Bank has been honoured with the "SME Financier of the Year - Asia" award as an honourable mention for the past three consecutive years at the Global SME Finance Awards.
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What can banks do to reduce the loan discrepancy between urban and rural SMEs?
Banks can reduce the loan discrepancy between urban and rural SMEs by expanding their reach in rural areas. This can be achieved through alternative acquisition channels, such as agent points, sub-branches, and partnerships with NGOs and microfinance institutions.
Additionally, digitising lending processes can make it easier and more efficient to provide loans to rural SMEs.
Would you elaborate on your most innovative and popular SME loan products? How do these products make Prime Bank different from other lenders?
Prime Shahaj is one of Prime Bank's flagship lending products for SMEs, designed to be an easy, unsecured loan solution. It offers loans up to Tk100 lakh without requiring collateral and ensures quick processing, with disbursement taking just seven to nine days.
Currently, Prime Shahaj constitutes 35% of our MSME loan portfolio. This product distinguishes Prime Bank from other lenders by providing accessible, efficient, and supportive financial solutions for small and medium enterprises, empowering them to grow and succeed.
How does Prime Bank's Islamic lending scheme for MSMEs work? How can Shariah-based principles be applied to MSME lending?
Prime Bank's Islamic lending scheme for MSMEs offers a comprehensive range of products designed to meet their funded investment, trade support, and non-funded needs, all while adhering to Shariah-based principles.
The bank provides six investment products under this scheme, ensuring compliance with Islamic finance guidelines. This approach empowers MSMEs by offering ethical and interest-free financial solutions tailored to their specific business requirements.
Prime Bank has a product dedicated to supporting start-ups. How many start-ups have you lent to so far? What criteria do you look for when lending to start-ups?
Prime Bank's dedicated product, Prime Start-up, supports start-ups with unsecured term loans up to Tk50 lakh and secured loans up to Tk1 crore. We look for businesses with innovative ideas and strong potential for growth.
Our loans can be used for various needs, including working capital, asset acquisition, business expansion, and other legitimate business requirements. We offer an attractive interest rate of 4%, aiming to empower new enterprises to achieve their goals.
Financing is the first hurdle that you are helping small enterprises to overcome. But they have other barriers — lack of skills, management and market links. How are you helping them overcome those hurdles to become viable and repay your loans?
We help small enterprises overcome various barriers by ensuring effective fund utilisation, providing continuous monitoring and follow-up, and enhancing financial literacy programs. These efforts aim to improve their skills, management, and market links, enabling them to become viable and profitable, which in turn helps them repay our loans on time.
What percentage of your loan portfolio do SMEs constitute? Do you have any plans to increase that further? If so, how?
Currently, SMEs constitute approximately 13% of Prime Bank's total loan portfolio. To increase this share, we are committed to tailoring banking solutions specifically for CMSMEs. We have introduced a comprehensive range of products covering transactional services, deposits, funded and non-funded loans, and trade support. Our streamlined, system-based loan procedures and digital banking solutions like digital nano loans aim to simplify operations and boost productivity for CMSMEs.
We have also expanded our nationwide presence with dedicated relationship managers and fortified our risk management and credit administration frameworks. Looking ahead, Prime Bank plans to further empower SMEs through initiatives like Digital Nano Lending, offering automated loan approvals based on credit scores, and introducing digital supply chain finance solutions to better support SMEs as distributors and suppliers.
