Few economic peers are going digital as rapidly as Bangladesh. Even in this disruptive context, 25-year-old Prime Bank is a stand out. A bank that is, in the words of chief executive Rahel Ahmed, “moving faster than technology.”
Prime Bank’s downtown HQ certainly fits the bill. Its open floor plan, cavernous high-ceilinged rooms, chic coffee bars and futuristic furniture feel more like a Silicon Valley campus than a representative of the banking establishment.
The real buzz, though, is the recently launched PrimeDiGi platform, an app that includes the nation’s first-ever digital savings account and has all the associated credible cybersecurity bells and whistles.
As Ahmed explains it, Bangladesh, like peers in developing Asia, is working to harness the so-called fourth industrial revolution with world-class know-your-customer safeguards. PrimeDiGi, in this regard, is the core of the bank’s strategy to stay at the forefront of an industry evolving at blistering speed.
There are myriad ways Prime is innovating. It introduced a real-time business to provide enhanced trade and cash-management options to corporate customers. Yet the real tasks, as Ahmed sees it, are “keeping pace with the country’s digital growth” and exploring “the untapped potential of the digital landscape of Bangladesh.”
To win a bigger share of the local market, Prime is constantly enhancing its self-service banking channel Altitude.
Recent initiatives include more digital payment options, e-loans, e-credit and nano-lending to reach the poorest of the poor.
Prime is also raising its tech game to woo a young population anxious to move up the wage ladder.
At present, 60% of Bangladesh’s population is between 15 and 45 years old. By 2025, it will make up an estimated 66%. The needs and interests of this demographic are evolving in sync with the nation’s 8% growth.
Of PrimeDiGi users, for example, 95% are between 18 and 45. This reach means Prime is well positioned to help Bangladesh increase financial inclusion through digital means. Yet it also ups the pressure on Ahmed’s programming and coding teams to ensure that “faster than technology” is a corporate way of life and not just a marketing slogan. Given Prime’s keen focus on the digital world, there is every reason to bet on its continued leadership.
Best bank for SMEs
|Arif Khan, IDLC Finance|
Starting with its first dedicated SME branch in the northern Bogura district back in 2006, IDLC has been doing its bit to strengthen the Bangladesh economy’s foundations from the ground up.
All too often, developing-nation governments give outsized importance to the top-down economy – to corporate giants that make headlines abroad. It is SMEs, though, that drive the lion’s share of growth and create jobs – and Arif Khan, who has run IDLC since March 2016, is well aware of this.
Khan’s raison d’être is “financing happiness,” he says.
Yet his team is financing inclusion even at a time of declining private-sector credit growth, as seen over the last year. Despite the global trade war, IDLC in 2019 delivered an impressive 8.3% year-on-year jump in portfolio growth. Its total SME portfolio rose to $448 million, from $410 million in 2018. In fact, November 2019 saw the highest-ever monthly disbursement of $27.6 million. Overall last year, the client base grew 10.3%.
“To us,” Khan says, “these numbers present a fascinating tale of success and inspire us to achieve greater heights. We are committed to expanding our presence across the country and provide impeccable service” by “establishing ourselves as a data-driven and efficiently run organization.”
Mohammad Jobayer Alam, head of the SME division, is particularly bullish on thinking small to reap big rewards.
“It’s the very small segment that we are targeting,” he explains, whereas most other financial institutions in Bangladesh are turning elsewhere.
One deterrent: credit risk management requirements can be quite onerous and resource intensive, so IDLC built its own credit-scoring system in conjunction with the IFC and Crisil, an Indian analytics firm.
It allows IDLC to push into the under-served market for loans of between $2,500 and $17,000. This range is too high for traditional microfinance operations, but too low for conventional banks. In 2019, IDLC disbursed $15.1 million in very small enterprise (VSE) financing.
What’s more, IDLC is managing to expand into under-served businesses with minimal blowback. Its non-performing loan ratio is 2.9%, well below the industry average of 11.9%, and it boasts a 1.4% return on assets, versus the industry average of 0.7%. Not bad for an operation that thinks small.
Best bank for CSR
The City Bank
|Mashrur Arefin, The City Bank|
When this 37-year-old institution won Asiamoney honours in the past, it was in premium services. No other local lender can compete with its priority banking division, Citygem. More recently, though, the bank led by chief executive Mashrur Arefin is impressing us with its corporate social responsibility efforts.
Year after year, Citygem rolls out new services to its 4,500-plus customer base, one certain to expand with Bangladesh’s consistently buoyant economy. The services come with all sorts of bells and whistles: VIP lounges at Hazrat Shahjalal International Airport? Check. Exclusive banking centres from Dhaka and Chittagong? Absolutely. Access to world-class medical centres and valet parking services? Most definitely.
Equally notable is how The City Bank is raising its CSR game. Take its innovative push into banking for women. The ‘City Alo’ offering boasts women-only branches and specially designed entrepreneurship courses in conjunction with North South University.
Its collaboration with the IFC sponsors financial-literacy support groups with names such as ‘Breaking up the boy’s club,’ ‘How moms make budgets’ and ‘Building resilience through inclusion.’
“Our mission on gender,” as Arefin puts it, “is to empower you by giving you financial assistance and support to expand your business or better manage your personal necessities with a reimagined banking experience.”
At the flagship City Alo branch downtown on Gulshan Avenue, clients enjoy something approaching the WeWork treatment. Women can walk in, grab a cup of coffee and decompress in the lounge-type seating area while meeting bank officers.
The bank is also supporting the Dhaka Metropolitan Police in counter-terrorism efforts and is helping to finance the government’s anti natural-calamity and relief-fund efforts. It is raising awareness of Down Syndrome risks and promoting the teaching of science, technology, engineering and mathematics classes in schools and colleges. It is supporting programmes for the holistic development of children with special educational needs, including autism.
The City Bank facilitates a laptop programme targeting the visually impaired. It distributes blankets to the poor at 102 branches countrywide. Not exactly the community you would expect a bank geared toward premium clients to service. Kudos to The City Bank for doing its part to help spread the benefits of economic growth.
Best for microfinance
The Association for Social Advancement has come a long, long way since its humble beginnings in the remote village of Tapra 42 years ago.
Founder and president Shafiqual Haque Choudhury isn’t coy about recounting how ASA was born of stark necessity after the bloody, post-independence days of the mid 1970s. The economy was in ruins, with wide-spread famine, and government institutions were incapable of stabilizing the nation. Non-government organizations stepped in to save the day.
Some key domestic ones were created – and microfinance pioneer ASA was arguably the most important of the lot. Grameen Bank may have come first, and founder Muhammad Yunus may have won a Nobel Peace Prize, but ASA’s exponential growth, pioneering spirit and promotion of microfinance wins our top honour once again.
In the last year, its network of branches grew to 3,065 from 3,045 in 2018, covering almost 90% of the nation’s communities.
The mission, as Choudhury puts it, is to “improve the life quality of the people living at the bottom of the socioeconomic pyramid and establish a society free from poverty and economic disparity.”
This means that, for all ASA’s success and innovation, there is still much work to be done.
Like most of its peers in south Asia, Bangladesh is a decidedly overbanked place. Yet the vast majority of the population lives in far-off rural and nominally urban areas with limited access to traditional bank accounts and lines of credit.
ASA is a vital bridge between its seven million clients and the fast-globalizing economy with which they are keen to interact.
In our latest review period, ASA disbursed some Tk310 billion ($3.6 billion) in loans, up from Tk284 billion a year earlier, and maintained double-digit returns on equity once again. ASA’s solid financials owe much to steady loan growth and a 99% recovery rate on outstanding IOUs.
Along with financing, ASA runs a growing roster of non-financial technical assistance programmes as varied as agriculture, education, healthcare, hygiene, physiotherapy and sanitation. Naturally, micro loans related to these and other areas are readily available.
Women entrepreneurs are a particular focus in lending programmes, of course. So are, increasingly, small companies in one of the developing world’s most promising but liquidity-starved economies.