O

D
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G
N
I
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E
V
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..

QUESTION ???.......

DO U HAVE SEEN ANY

Opportunity IN A MILKING
COW ???

RURAL MARKETING IN
BANGLADESH

1. Md. Ekram Uddin

Students I.D-27058
2. Asif Ahmed.
Students I.D-27047
3. Seikh Nazia nafiz.
Students I.D- 27065

UT
O
AB HE
TE
T
N
SE
E
PR RS

ABOUT RURAL MARKETING

- Rural marketing is a two-way marketing process.

inflow of products
outflow of products. .

Features of Rural Marketing:

. Large and scattered population
Higher purchasing capacity
Market growth
Development of infrastructure.
. Low standard of living
Traditional Outlook
Marketing Mix

RURAL MARKETING: REAL LIFE

EXAMPLES

Outflow of products
Pran

RURAL MARKETING: REAL LIFE

EXAMPLES

Inflow of products
Uniliver sunsilk

RURAL MARKETING: REAL LIFE

EXAMPLES

Pran

Why leasing is increasing globally?

Increased competitiveness for financial institutions
Increased competitiveness for suppliers and manufacturers
Significant profit margin of the "independent" leasing
companies
Attraction of lower ultimate cost or increased financial
flexibility for lessee
Tax laws benefits
Better planning for development of leasing industry

CLASSIFICATIONS OF LEASE FINANCING

EQUIPMEN
T LEASING

FINANCIA
L LEASE

OPERAT
IO
NAL

LEASE

REAL
ESTATE
LEASING

Equipment Leasing:
Equipment Leasing has been defined as a contract between a lessor and lessee for
the hire of specific assets selected from a manufacturer or vendor of such assets by
the lessee.

Real Estate Leasing:

Real estate leasing is a lease of immovable property is a transfer of a right to
enjoy such property, made for certain time, express or implied, or in perpetuity, in
consideration of a price paid or promised, or of money, a share of crop, service or
any other thing of value to be rendered periodically or on specific occasions, to the
transfer or by the transferee, who accepts the transfer on such terms.

Financial Leasing:
According to T. M. Clark, "A financial lease is a contract involving payment over an
obligatory period of specified sums sufficient in total to amortize the capital
outlay of the lessor and give some profit". Financial lease has been defined by
International Accounting Standards Committee as "a lease that transfers
substantially all the risks and rewards incident to ownership of an asset. Title may
or may not eventually be transferred."

Operating Leasing:
Operating lease involves high payments of rentals. It is a non-pay-out lease in
which the lessor's obligations include services other than the financing of the
purchase price of the leased property such as maintenance, repair, and technical
advice.

DIFFERENCE BETWEEN FINANCE LEASE AND OPERATING

LEASE

Points

Finance Leases

Operating Leases

Lessor

Lessor acts as a financing institution

Lessor purchases and leases it out to

the lessee

Specifications of
equipment

Lessee selects and acts as lessor's

agent in ordering it

Lessor purchases at its own choice

Normally long term covering the

maximum life of the

period

Short period and cancelable

asset and non-cancelable

Lessee

Lessor

Component of
rentals

Cost of equipment & interest

Cost of Equipment, interest and

maintenance chares

On renewal

Lower rental

Same rental

Type of Assets

Durable items

Consumable items

Maintenance

DIFFERENT KINDS OF LEASESSale

Leaseback:

Wet and Dry

Lease

Master
Lease

Crossborder
Lease

Direct Lease

Closed and
Open Ended
Lease

Leveraged
Lease

Hirepurchase
Lease

Fact-1
To assist the development & promotion of
productive enterprises.

WHY LEASING IN
BANGLADESH?

Fact-2
To assist in balancing, modernization,
replacement & expansion of existing
enterprises.

Fact-3
To extend financial support to small & medium
scale enterprise.

Fact-4
To provide financing for multi sector
equipment (i.e.- Agriculture, Textile, etc.)

Fact-5
To activate the capital market by operating as
issueing manager, underwritter or portfolio
manager.

NAME OF SOME LEASING FIRMS IN

BANGLADESH:
-

Bay Leasing ltd.

BD Finance Ltd.
Delta Brac Housing
finance corporation ltd.
Fareast Finance &
Investment Limited.
First Finance Limited.
IDLC Finance Ltd.
Industrial Promotion &
Development Company.
(IPDC)
Infrastructure
Development Company
Ltd.
International Leasing &
Financial Services Ltd.

International Leasing &

Financial Services Ltd.
Islamic Finance &
Investment Limited.
Lanka Bangla Finance
Ltd.
Midas Financing Limited.
Phoenix Finance &
Investment Limited.
Prime Finance &
Investment limited.
Union Capital Ltd.
Uttara Finance &
Investment Limited.

TABLE 2. LEASING CONTRACTS

Year

1986
1987
1988
1989
1990
1991
1992
1993
1994

No of leasing
Company

1
1
1
3
3
3
3
4
4

Amount (in
Million)

733
1261
1637
32026
31357
4244
4825
5887
7718

INDEX

100
172
223
276
431
579
658
803
1053

Growt
h
Rate
(%)
72.03
29.65
23.76
56.16
34.33
13.64
22.00
31.13

TABLE 3. GROWTH OF CONTRACTS

Year
1995
1996
1997
1998
1999
2000

2001
2002
2003

Contract (Tk).
(Million)
41
82
117
158
262
365

415
525
741

Growth
(%)
98.7
41.5
36
65.4
39.4
13.7
26.4
41.2

Contract (Tk).
Million)

Year

2004

1254

69.2

2005

2083

66.2

2006

2617

25.6

2007

3331

27.3

2008

4187

25.7

2009

5005

19.5

2010

6500

23

2011

7500

15

2012

Growth (%)

11291

Source: Financial Institutions Department, Bangladesh Bank

50

LEASING CONTRACTS

Leasing Executions Margin

Market Share of Leasing Firms during

2012

Name of

Lease Market Share (%)

Sl No

Leasing

in the Lease Market

Companies

2011

2012

Composite Z

Share

IDLC

29

23.4

26.2

1st

ULC

22

19.9

20.95

2nd

PLC

10

9.1

9.55

3rd

IPDC

5.1

7.05

6th

GSPFCL

6.1

7.05

4th

ILFSL

7.1

6.55

5th

OTHERS

16

29.3

22.65

Composite position

Total

100

100

100

Market share

ILFSL; 6% Others; 2%
GSPFCL; 9%
IDLC; 35%
IPDC; 9%

PLC; 12%

ULC; 27%

PROBLEMS OF LEASING FIRMS IN

BANGLADESH.
Lack of Executive Attention
and Visibility

Problem-1

Insufficient Lessor
Management

Problem-2

Insufficient Asset and

Portfolio Management

Problem-3

Ineffective and Inefficient

Leasing Operations and
Dependence on
Spreadsheets

Problem-4

Poor Controls
and Compliance
Management

Problem-5

PROBLEMS- FOR LEASING FIRMS

Cost of Fund- Higher
Branch
Access- low
Absence of Foreign
trade Operations
Less Product
Variation
Competition
with banks

PROSPECTS OF LEASING FIRMS

Tax benefit

Off balance sheet

financing
Conserves
working capital
Transfers risk of
obsolescence
Preserves debt
capacity

Serves as a hedge
against inflation

THAN
K

YOU