Credit Risk Management Of IPDC Finance
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Non-Banking Financial Institution (NBFIs) have become an important aspect for the growth of any nation’s economy. During the world recession period NBFIs in Bangladesh acted in a stringent way so that the financial systems as well as the economy cannot collapse. Today there are 29 NBFIs now contributing to the growth of national economy. IPDC Finance Ltd as the first private sector financial institution of the country has started their journey in 1981 and still they are dominating the NBFI sector as well as contributing to the prosper of economic development. Their success in this industry has inspired others to invest their capital in a profitable way. All NBFIs major product or business is to provide lease facilities to the business along with various types of loan to individual and organizations therefore a great credit risk is associated with each and every product they are offering. That is borrowers can be defaulter and will unable to repay the dues. Which can lead the NBFIs to face a great loss. To minimize this risk every institution has its own risk management policies. A number of procedures are taken to check the risks associated with their investments. This report is emphasizes on the overall credit risk management in NBFIs of Bangladesh. In this regard IPDC Finance Limited has been taken as the sample organization to discuss about the CRM process. Though very organization has its own procedure, yet all of them are bound to follow the common instructions of Bangladesh bank. There is a polished and elaborate procedure that are to be followed by IPDC in case of controlling the credit risk. The whole system has been described in a detailed manner keeping in mind the most important segments. The Credit Approval Process, needed Credit documentation, Credit Risk Grading are added to give a clear understanding of the whole system. Along with these the products & services, rules and regulation, corporate governance has been discussed also to know about the overall company.
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