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

Content

Stock Market in Bangladesh: a case study on Chittagong Stock Exchange (CSE) Child Survival in a Developing Country

21

Women Entrepreneurship Education in Economic Development Comparative study on Compensation Management Practices of Selected Securities firms in Chittagong Stock Exchange Ltd Management of Government Banking in The Third World country: a case study on Agricultural Bank-Problems and Remedies

45 54

63

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

Stock Market in Bangladesh: A Case Study of Chittagong Stock Exchange (CSE)

Mir Md. Tariqul Alam1 A.M.Shahabuddin Chowdhury2 Abu Hanifa Md. Noman Bin Alam3
1 Department of Business Administration, Premier 2 Chittagong, Deparment of Business

University

Administration, International Islamic University 3 Chittagong, Deparment of Business Administration, International Islamic University Chittagong,

Correspondence: Mir Md. Tariqul Alam Department of Business Administration 1/A, O.R. Nizam Road, Prabartak Circle, Panchlaish Chittagong Bangladesh Tel:+88(031) 656917(103) Fax:+88(031) 657892 Cell: +8801676848032 E-mail: tariqultvi@gmail.com Web: http://www.puc.ac.bd/

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 a mere coincidence that almost all the developed nations exhibit a strong secondary market. 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 market trends in terms of market capitalization, market liquidity, market concentration, number of 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 of Bangladesh till not stable. We conclude that Bangladesh stock market is still at an early stage of its growth and stock market size is small. [Key words: Stock market, growth,turnover, capitalization.]

Abstract
4

Introduction Stock market can perform well to meet the continuous financial needs of business enterprises, if there exists a congenial environment for boosting confidence of both stock market operators and investors (Ahmed et al, 1996). The growth and development of stock 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 more confident 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). 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 comparatively lower 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 of Bangladesh stock market growth To identify various indicators of Bangladesh stock market growth. To recommend some guidelines to ensure stable market growth considering the current performance of the stock market of Bangladesh.

of key indicators are used for the analysis of the collected data. History of Bangladesh Stock Market in

Data and Methodology Research methodology of the study was focused both on qualitative and quantitative study. Primary and Secondary both types data 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 structured questionnaire. 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

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 1971 to 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 to control 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 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.
Market Capital 65,222.8 71,262.0 97,587.0 224,923.0 233,075.0 323,368.0 753,950.0 1059,530. 0 1887,177. 0 2275,558. 0 39,868.3 34,984.9 19,152.1 53,181.1 64,834.8 65,069.3 322,820.1 667,964.7 1475,300.8 687,967.5 Turnover Price Index 817.79 822.34 967.88 1,971.31 1,275.05 1,321.39 2,535.96 2,309.35 3747.53 5582.33

Table-01: Trading Operation in Dhaka Stock Exchange (Amount in million Tk.) Year No. of listed Securities 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (March) 249 260 267 256 286 310 350 412 415 437 11 08 14 02 22 12 14 12 18 06 IPO Issued Capital 33,454.3 35,203.0 46,055.0 49,532.0 70,313.0 118,437.0 214,470.0 372,156.0 522,099.0 566,584.0

Source: Bangladesh Economic Review, 2010 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. 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. p 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 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 was 8,692.75 at end of 2008.

Table -02: Trading Operation in Chittagong Stock Exchange Year No. of Listed Securities 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (March) 177 185 196 198 210 213 227 238 217 226 09 09 10 03 16 06 13 12 18 06 29,652.7 31,079.9 41,967.6 46,978.7 55,519.3 69,378.4 89,173.9 121,603.2 155,124.9 177,603.9 IPO Issued Cap. (In ml taka) Market Cap. (In ml taka) 56,363.5 60,467.7 85,312.3 215,010.8 219,942.8 270,510.7 612,580.0 807,684.0 1470,807.0 1862,988.5 1,479.62 13,586.1 6,688.6 17,551.3 14,042.7 15,893.1 52,590.3 99,803.7 162,562.6 60,737.3 1,836.87 1,841.14 1,642.78 3,597.70 3,378.68 3,724.39 7,657.06 8,692.75 13,181.37 16,193.99 Turnover (In ml taka) Price Index

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 As on 30th June 2009 Total number of listed securities Total issued capital of all listed companies (in millions) Total capitalization (in million) All Share Price Index 2520.20 3747.53 10477.67 13,181.37 Market 443 457,94 0 As on 31st Dec. 2009 415 522,099 Chittagong Stock Exchange As on 30th June 2009 245 142,470 As on 31st Dec. 2009 217 155,124.9

1,241,340.0

1887,177

974,950.0

1470,807.0

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 was 3747.53 and 13,181.37 Indicators of Market Growth and Trend of Market Performance of CSE
Table - 04: Stock market size Year Total Market Capitalization (in million taka) 2002 2003 2004 2005 2006 2007 2008 2009 131,730 182,899 439,934 453,018 593,879 1,366,530 1,708,765 3,357,984

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 we examine all these above mentioned indicators to evaluate the growth pattern of Bangladesh stock market mainly of CSE.

GDP (million taka)

Market Capitalization to GDP (%)

2,732,010 3,005,800 3,329,730 3,707,070 4,157,280 4,724,770 5,458,220 6,147,950

4.82 6.08 13.21 12.22 14.28 28.92 31.53 54.61

Descriptive Statistics of Market capitalization to GDP Mean Standard deviation Skew ness Minimum Maximum 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 20.71 16.78 1.30 4.82 54.61 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 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mean SD Coefficient of Skew ness Market Capitalization (million tk) 60,468 85,312 215,011 220,353 267,501 612,479 807,875 1,470,807 2,983,929 GDP (million tk) 2,732,010 3,005,800 3,329,730 3,707,070 4,157,280 4,724,770 5,458,220 6,147,950 6,905,710
p

Market Capitalization to GDP (%) 2.15 2.8 6.07 5.61 6.44 12.00 14.80 23.92 43.20

12.99 13.24 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 market capital in the total is also

increasing. It has reached almost half of the total market capital in the year 2008.

Table -06: Market capitalization in CSE, its growth and as a % of total (2002-2008)
Market Capitalization (in million taka) 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mean SD Skew ness 60,468 85,312 215,011 220,353 267,501 613,175 807,875 1470,807 1862,989 Growth of Market Capitalization (%) 7.28 41.09 152.03 2.48 21.40 129.22 31.75 82.05 102.88 63.35 55.02 .51

Year

CSE MC as % of total capitalization

9.14 8.68 48.87 48.60 45.27 44.87 49.76 43.80 -

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 Chart -01: Market capitalization in CSE
2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0
02 03 04 05 06 07

growth in market capitalization was 152.03% in the year 2004. In the year 2008, the secondary market experienced a steady rate of growth.

(in million)

M C kt. apitalization

08

09 20

20

20

20

20

20

20

20

Y ear

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
Year

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 Number of Companies listed Dhaka Stock Exchange 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (March) 249 260 267 256 286 310 350 412 415 437 Chittagong Stock Exchange 177 185 196 198 210 213 227 238 217 226

Source: Bangladesh Economic Review, Chittagong Stock Exchange, Dhaka Stock Exchange and Securities and Exchange Commission (Annual Report and quarterly review), various issues.

20

10

Chart -02: Forecasted listed co. under CSE

30 0
Liquidity The ability of the market to buy or sell securities is termed as liquidity. According to (Agarwal, R, N, 2000) two measures are generally used to measure liquidity. They are turnover (total value traded) in the stock market as a ratio of:
Table -08: Turnover and GDP Turn over (in million taka) 13,586 6,689 17,551 14,043 15,893 52,590 99,804 162,56 3 60,737 Annual Growth (%) -9.17 -50.53 120.39 -5.90 18.64 216.56 92.53 66.88 2.64 As a % of GDP 0.49 0.22 0.44 0.37 0.39 1.11 1.86

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 (March)

20 5

(i)

GDP; and Stock capitalization. market

(ii)

The second measure is also called turnover ratio. High turnover ratio is associated with low 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.

20 0

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.

Listed Co.

Descriptive Statistics Mean SD Coefficient of Skewness Minimum 56.18 86.35 .78 1.35 -50.53 216.56 0.22 2.64 0.94 0.88

10 5

Maximum

Source: CSE Portfolio

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
Table - 09: Market capitalization and Turnover Year Market Capitalization (in million taka)

smooth; there is a marked fluctuation in the value traded to GDP ratio over the years 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.

Turnover (in million taka)

Ratio of Turnover to Market Capitalization

2002 2003 2004 2005 2006 2007 2008 2009 Mean SD Coefficient of Skewness Source: CSE Portfolio

60,468 85,312 215,011 220,353 267,501 613,175 807,875 1470,807

13,581 6,719 14,808 13,933 16,530 52,328 100,747 162,563 10.22 5.43 1.97

22.46 7.88 6.89 6.32 6.18 8.53 12.47 11.05

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

S.N 1 Category No. of Securities Listed No. of trading days No. of securities traded Market Capitalization In million taka 5. Total Turnover Value In million taka 6. Turnover Volume (shares 000) 332,534 308,901 330,662 652,254 972,811 133878 2129129 2004 198 2005 210 2006 213 2007 227 2008 238 2009 217 2010 225

2. 3.

271 185

263 191

231 202

237 217

238 177

244 -

244 -

4.

215,011

220,353

267,501

613,175

807,875

1470807

2983929

14,808

13,933

16,530

52,328

100,747

162019

340929

8.

No. of companies declared cash dividend Indices CSE All Share Price Index (CASPI) CSE 30 Index CSCX

135

161

113

116

92

28

72

9.

3,598 3,466 ----6.07 18.65 6.87 3.23

3,379 3,159 2,348 5.61 15.67 6.37 4.35

3,724 3,342 2,432 6.44 14.31 6.19 4.25

7,657 6,935 4,921 12.00 22.83 8.53 2.00

8,692 7,566 5,680 14.91 19.00 12.47 2.61

13181 10306 8560

23449 20988 15156

10. 11. 12. 13.

Market Cap. To GDP (%) Market P/E ratio Turnover ratio (%) Dividend

Yield Index #All Share Price (%) 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 sec

Table-11: Share of Market Capitalization (%) Year 2006 2007 2008 2010 Banking 52.7 56.94 43.14 33.14 Other 4 largest sectors 32.53 29.68 38.15 28.95 Total 85.23 86.62 81.29 62.09

Source: Portfolio, Chittagong Stock Exchange 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.

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

Table -12: Market Concentration: turnover by largest 4 sectors and largest sector in the CSE. Concentration measures Turn over by the largest 5 sectors (%) Turnover by the largest sector (% ) 2006 83.59 46.88 2007 78.78 50.41 2008 72.02 19.84 2010 67.18 33.56

Source: Portfolio, Chittagong Stock Exchange

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 CSE All Share Price Index Growth rate (%) Mean SD Range Coefficient of Variation Maximum Minimum Quarter 1 16193.99 Quarter 2 18116.05 0.11869 Quarter 3 20729.79 0.14428 19622.20 3156.59 2719.20 16.09 % 23448.99 16193.99 Quarter 4 23448.99 0.13117354

Source: Portfolio, Chittagong Stock Exchange Table - 14: The changes in CSE-30: 2010 Index CSE-30 Growth Rate (%) Mean SD Range Coefficient of Variation Maximum Minimum Quarter 1 11017.18 Quarter 2 14963.63 0.35821 Quarter 3 16602.88 0.10955 15895.47 4131.34 4395.29 25.99 % 20998.17 11017.18 Quarter 4 20998.17 0.26473058

Source: Portfolio, Chittagong Stock Exchange

Table -15: The changes in CSCX: 2010 Index CSCX Growth Rate (%) Mean SD Range Coefficient of Variation Maximum Minimum Source: Portfolio, Chittagong Stock Exchange Quarter 1 10600.93 Quarter 2 11694.38 0.10315 Quarter 3 13335.95 0.14037 12696.9075 1987.923051 1820.42 15.65674989 15156.37 10600.93 Quarter 4 15156.37 0.13650471

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
Table -16: Descriptive Statistics Mean Listed Co. Turnover Market Capitalization Turnover to Capitalization 210.5 47839.8 467562.75 10.22

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 bivariate correlation.

Std. Deviation 17.30 55845.58 481111.20 5.43

N 8 8 8 8

Turnover to GDP

.94

.88

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 Market Capitalizatio n .952** .001 .955** .001 .955** .001 .120 .798 .995** .000 -.109 .816 .945** .001 .188 .686 1 Turnover to Capitalizatio n -.326 .476 .120 .798 -.109 .816 1 Turnover to GDP .826* .022 .995** .000 .945** .001 .188 .686 1

Listed Co. Listed Co. Pearson Correlation Sig. (2-tailed) Turnover Pearson Correlation Sig. (2-tailed) Market Capitaliz ation Pearson Correlation Sig. (2-tailed) .858* .013 .952** .001 -.326 .476 .826* .022 1

Turnover .858* .013 1

Turnover Pearson to Correlation Capitaliz Sig. (2-tailed) ation Turnover to GDP Pearson Correlation Sig. (2-tailed)

* Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed).

Conclusion & Recommendation From the study of evaluating the growth and performance of Bangladesh stock 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, turnover 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 stock exchange by SEC Unusual behavior money market; of the

References Agarwal (2001), Stock Market Growth and 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. Akhter S, Misir A, and Ahmed S (2005), Capital markets development in Bangladesh the status of DSE, Pakistan journal of social science, 3(8):10021006. 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.

Lack of investment opportunity in the industrial sectors; Limited number of stock of Govt. owned company; Demand of the share is higher than the available supply; Lack of awareness about stock market behavior of small investors; Profit making motives of institutional investors. Lack of govt. initiative to control unusual 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.

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, American Economic 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 (20082009) DSE portfolio, various issues (20022010) CSE Bazaar Paricroma, various issues (2002-2010) CSE portfolio, various issues (20022010) CSE profile, various issues (2002-2010)

CHILD SURVIVAL IN A DEVELOPING COUNTRY: A STATISTICAL ANALYSIS

Abstract This study utilizes data extracted from the 2007 Bangladesh Demographic and Health Survey (BDHS-2007) to investigate the predictors of child survival (age under 5 years) in a developing country like Bangladesh. The cross-tabulation and Coxs proportional hazard model techniques have been used to estimate the predictors of child survival in Bangladesh. Parents education, occupation of father, region, type of toilet facility, access to mass media, breastfeeding status, birth order, birth spacing with previous child, age of mother, age at first marriage and antennal visit during pregnancy have been found significant effect on child survival by both cross-tabulation and Coxs proportional hazard techniques. Finally, these findings suggest that an increase in parents education, breastfeeding to child, encourage bearing in child at age of mothers 2034 years, marrying to legal age and improving health care services, which could in turn raise child survival and decrease child mortality in Bangladesh.

Md.Musa Khan1 Mohamed Nazmul Hoq2 Md. Emdad Hossian3 1Department

Administration,

of Business Administration, International

Islamic University Chittagong, International of

2Department
Islamic Business

of Business University

Chittagong, Department

Administration,

International Islamic University Chittagong.

Correspondence: Md. Musa Khan Department of Business Administration, International Islamic University Chittagong, 154/A, College road, Chittagong4203, Bangladesh Tel: +88(031)610085 Fax:+88(031)610307 Cell: +8801717025142 E-mail: musa_stat@yahoo.com Web: http://www.iiuc.ac.bd/

KEY WORDS: Neonatal; Post-neonatal; Mortality; Survival; Bio-demographic; Antenatal.

Introduction The study of child mortality becomes one of the most important researches of the developing countries including Bangladesh. According to UN Population Fund (2010) the total population of Bangladesh is164.4 millions whereas the area is only 1,44,000 km2,which represents that Bangladesh is one of the most densely populated country in the world. Despite general improvements in the mortality, particularly

conditions [7-12, 62]. Thus identification of the factors, which produce these differentials, is important to policy makers in their efforts to improve child survival. Socio-economic factors that have typically been examined in relation to differential child survival in developing countries include parental education (particularly that of mother), place of residence, fathers occupation and household economic condition[18-20]. A large part of the differentials observed appear to have been explained by the educational status of the mother [13,21-23] who is directly responsible for care and health of her offspring. However, increasing concern has recently been placed upon the environment in which children belong. For example, source of drinking water, toilet facility and electricity in the household are related to the social or economic condition of individual familiar and to the prevalence of various types of childhood diseased sickness. Recently, many of the demographic surveys in developing countries have been designed to collect information on this households environmental condition. Mothers demographic factors that have typically been examined in relation to the differential of child survival in developing countries [17,24-27]. Age of mother, birth order, birth interval and sex of child, which were the demographic characteristics, is relation to differential child survival.[15,12,15,16]

infant and child mortality over the last three decades in Bangladesh, the level of infant or child mortality remains markedly high. Infant mortality dropped to about 52 per thousand live births in the 2007 Bangladesh Demographic and Health Survey (BDHS) from about 87 in the 1993 -1994 BDHS and child mortality dropped to about 14 per thousand
live births in the 2007 BDHS from about 50 in the 1993-1994 BDHS [61]. Though such a reduction appears encouraging these national figures may mark large differentials in the risk of death that children of various sub groups of population are exposed to the decline in mortality may be attributed to the governments efforts to implement a public health programme, including the immunization of children. Successive five-year national development plans have been emphasizing reductions infant and child mortality with varying targets. Some of the differentials are due to social and economic

In Sir Lanka, the survival probability during the first 10 years of life was significantly lower in household with no toilet facility [66] Toilet facility as well as sources of drinking water appeared important determinants of infant mortality in urban Nepal [28,29]. In Egypt, the provision of piped water to the dwelling was associated with higher survival probability during early childhood ([38]. In rural Bangladesh, DSouza and Bhuiyan [22] those mortality rate ages 1-4 years in households with inadequate latrine 35% higher than in the households possessing such facilities. In a developing country like Bangladesh were the level of child mortality is high as judged by the standard of developing nation a study of factors influencing child mortality is of considerable relevance to planners and policy makers for the overall improvement of child survival and health. Analysis of the cross-sectional relationship between national life expectancies and national income per capita of the developing countries revealed the factors exogenous to life styles and economic development have had a major impact on mortality trends during the twentieth century [5356]. An examination of the situation in the Asia-Pacific region including Bangladesh also revealed a positive relationship between per capita Gross National Product (GNP) and life expectancy at birth [57-59. Findings from the same study also suggested that for Indonesia, Pakistan, Papua New Guinea, and Bangladesh the national level of economic

development would lead one to expect lower levels of mortality than those observed if economic development were the only determinant, while for China and Sri Lanka a higher levels would be expected. This indicates the presence of contributory factors other than level of economic development in the mortality situation in those countries. There is no doubt that both economic factors and modern technology have had impacts on mortality decline in the developing countries during the recent past. Perhaps there are limits to the achievement of one in the absence of the other. It is believed that only after a nation in economic development crosses a certain threshold can health programs become fully effective to improve the mortality situation. There might also be a ceiling beyond which the impact of public health measures taper off and any further gains depend on catch up growth in the economic field, including positive changes in personal behavior patterns [35-37]. For Bangladesh, better survival for urban children was also observed in nation wide studies conducted during the seventies. One such study was the Bangladesh Retrospective Survey of Fertility and Mortality (BRSFM), where a substantially higher child mortality rate was observed for rural than urban areas [14]. On the basis of Bangladesh Fertility Survey (BFS) data, a similar tendency of higher child mortality among rural children was reported by many investigations ([4,30,31,33,34,39,40]. With this in view an attempt was made to

investigate the effect of selected socio-economic, demographic and environmental factors on child survival in Bangladesh. Using World Fertility Survey (WFS) data from 28 countries of Africa, America, and Asia, [32] reported lower under-five mortality among urban (metropolitan) than rural children. A similar picture of favorable mortality situation during childhood for urban residence was also reported for Latin American Countries ([6]. An analysis of covariates of Sri Lankan childhood mortality revealed a better survival for urban children than for those residing in rural and estate areas ([47-57].However, when the efforts of other variables like parental education, age of mother at birth facility were controlled, the pattern of urban-rural differentials was reversed ([60]. This indicated that the urban-rural differences might have been medicated through the other variables included in the analysis. The review of literature of child survival shows that a number of variables are affecting child survival. However, the predictors of child survival are changing through time since the facilities and awareness are changing day by day. Hence, it is necessary to identify the segment of population where programmers need strengthen in order to achieve the goal for increasing child survival. Objective of the study In this study, an attempt has been made to examine the predictors of child survival in Bangladesh. The

specific objectives of the study are to identify the factors, which are increasing child survival and to suggest viable strategies to increase child survival in Bangladesh. Materials and methods This study uses data extracted from the 2007 Bangladesh Demographic and Health Survey (BDHS-2007), which conducted during the period from 24 March to 11 August 2007, on behalf of the Government of Bangladesh by National Institute for Population Research and Training (NIPORT), with funding from the United States Agency for International Development (USAID)/Dhaka. The description of the survey can be found elsewhere (Sabir et al., 2009). The sampling frame for the survey considered all households in Bangladesh from which a nationally representative sample of 10,819 households was selected; 10,461 were occupied. Of the households occupied, 10,400 (99.4%) were successfully interviewed. In these households, a total of 11,178 ever-married females aged less than 50 years were identified as eligible for individual interview. Of them, 10996 females (or 98.4%) were successfully interviewed. Among the 10996 ever-married females, the numbers of urban and rural respondents are 4151 (37.75%) and 6845 (62.25%), respectively. The sample had been taken 5 years prior to BDHS-2007 survey. A total of 6150 children, under-five years age have been selected in the study of whom 361 (5.87%) has already dead and 5789 (94.13%) have still surviving at date of survey. The associations between child survival

and selected explanatory variables have been tested by applying crosstabulation analysis. The crosstabulation analysis is an important in first step for studying the relationship between child survivals
with several characteristics. However, such analysis fails to address child survival predictors completely because of ignoring other covariates. Hence, Coxs proportional hazard model has also been adopted in order to estimate independent effects of each variable while controlled for others. Cox proportional hazard analysis has carried out for the child according to the age at survived. This analysis has considered all the covariates that have found significant in cross-tabulation analysis.

the insight variation of that particular type of variables. The distribution of child survival by socio-economic, bio-demographic and health care variables is shown in Table-1. Among socio-economic variables, parents education has a positive strong relationship with child survival. The results indicate that the child survival rate is lowest (92.9%) for the children of illiterate mothers and highest (95.4%) for the children whose mothers education level is secondary and above. It is clear that the child survival rate increases with the increase of mothers education. Like mothers education, fathers education also plays significant role on child survival. Fathers education level regards as a valid proxy of income and wealth status of the household in Bangladesh. It is likely that higher educated people belong to higher economic class. The child survival rate is highest (96.1%) for the children whose fathers education level is secondary and above and lowest (92.7%) for children whose fathers are illiterated. This result depicts that child survival moderately increases as father education increases. Therefore, it may be concluded that child survival rate is high for the children whose parents are educated. The highest child survival rate (95.1%) has found among the children whose mothers are rich and lowest (93.5%) for the mothers who are poor. Nevertheless, currently working status of mother has no significant effect on child survival. Fathers occupation is one of the important socio-economic characteristics of child survival. The child survival rate is highest (95.2%) for the children whose fathers occupation is business and lowest (93.3%) for the children of agriculture father.

Variables Education of mother; Education of father; Economic status; Currently working status of mother; Occupation of father; Type of place residence; Region, Religion; Type of toilet facility; Sources of drinking water; Access to mass media; Breastfeeding status; Birth order; Birth spacing with previous child; Age of mother; Age at first marriage; Sex of child; Place of delivery ;Antenatal visit during pregnancy.

Results and discussion In this section, we examine the predictors of child survival. Child survival reflects a countrys level of socio-economic development and quality of life. Bangladesh has witnessed a large decline in child mortality during the last three decade. The child survival varies according to socio-economic, bio-demographic and health care characteristics of the population concerned. There are many predictors of child survival in a particular group of variables and it is necessary to analysis to analyze them separately in order to get the idea about

Table 1: Distribution of Child Survival According to Selected Variables

Selected Variables

Number of Children Alive Dead

Total

Percentage of Alive

Chi-square (2)

Education of Mother Illiterate Primary Secondary + 1706(29.5%) 1661(28.7%) 2422(41.8%) 131(36.3%) 112(31.0%) 118(32.7%) 1837(29.9%) 1773(28.8%) 2540(41.3%) 92.9% 93.7% 95.4%

12.820***

Education of Father Illiterate Primary Secondary + Economic Status Poor Middle Rich 2341(40.4%) 1078(18.6%) 2370(40.9%) 163(45.2%) 75(20.8%) 123(34.1%) 2504(40.7%) 1153(18.7%) 2493(40.5%) 93.5% 93.7% 95.1% 0.157 2068(35.7%) 1506(26.0%) 2215(38.3%) 163(45.2%) 109(30.2%) 89(24.7%) 2231(36.3%) 1615(26.3%) 2304(37.5%) 92.7% 93.3% 96.1%

27.386***

6.649**

Currently Working Status of Mother

No Yes

4405(76.1%) 1384(23.9%)

278(77.0%) 83(23.0%)

4683(76.1%) 1467(23.9%)

94.1% 94.3%

Occupation of Father Agriculture Business Service Others 1288(22.2%) 1335(23.1%) 676(11.7%) 2490(43.0%) 93(25.8%) 68(18.8%) 36(10.0%) 164(45.4%) 1381(22.5%) 1403(22.8%) 712(11.6%) 2654(43.2%) 93.3% 95.2% 94.9% 93.8% 5.587** 103(28.5%) 258(71.5%) 2107(34.3%) 4043(65.7%) 95.1% 93.6% 28.099*** 749(12.9%) 1201(20.7%) 1225(21.2%) 681(11.8%) 917(15.8%) 1016(17.6%) 42(11.6%) 74(20.5%) 60(16.6%) 33(9.1%) 50(13.9%) 102(28.3%) 791(12.9%) 1275(20.7%) 1285(20.9%) 714(11.6%) 967(15.7%) 1118(18.2%) 94.7% 94.2% 95.3% 95.4% 94.8% 90.9% 6.839*

Type of Place of Residence Urban Rural Region Barisal Chittagong Dhaka Khulna Rajshahi Sylhet 2004(34.6%) 3785(65.4%)

Religion uslim Non-Muslim 5279(91.2%) 510(8.8%) 331(91.7%) 30(8.3%) 5610(91.2%) 540(8.8%) 94.1% 94.4%

0.106

Type of Toilet Facility Open Latrine Sanitary Latrine Others 3457(59.7%) 1428(24.7%) 904(15.6%) 223(61.8%) 70(19.4%) 68(18.8%) 3680(59.8%) 1498(24.4%) 972(15.8%) 93.9% 95.3% 93.0%

6.355**

*** Significant at 1%, ** Significant at 5% and * Significant at10%

Table-1 : (Continued)

Sources of Drinking Water

Pond/River/Others Tube-well/Pipe Access to Mass Media No Access 2200(38.0%) 155(42.9%) 2355(38.3%) 93.4% 5005(86.5%) 784(13.5%) 308(85.3%) 53(14.7%) 5313(86.4%) 837(13.6%) 94.2% 94.7%

0.375

3.500**

Having Access

3589(62.0%)

206(57.1%)

3795(61.7%)

94.6%

Breastfeeding Status Never Breast feeding 11 months 12-23 months 24 months Birth Order 1 2-3 4
+

1782.610*** 130(36%) 197(54.6%) 27(7.5%) 7(1.9%) 179(2.9%) 1563(25.4%) 1717(27.9%) 2691(43.8%) 27.4% 87.4% 98.4% 99.7% 11.545***

49(0.8) 1366(23.6%) 1690(29.2%) 2684(46.4%)

2500(43.2%) 1902(32.9%) 1387(24.0%)

137(38.0%) 123(34.1%) 101(28.0%)

2039(33.2%) 2623(42.7%) 1488(24.2%)

95.3% 93.3% 93.2% 30.452***

Birth Spacing With Previous Child 23 months 24-35 months 36 months Age of Mother <20 years 20-34 years 818(14.1%) 4356(75.2%) 67(18.6%) 265(73.4%) 885(14.4%) 4621(75.1%) 92.4% 94.3% 1686(29.1%) 1258(21.7%) 2845(49.1%) 154(42.7%) 70(19.4%) 137(38.0%) 1840(29.9%) 1328(21.6%) 2982(48.5%) 91.6% 94.7% 95.4%

6.963**

>34 years

615(10.6%)

29(8.0%)

644(10.5%)

95.5%

Age at First Marriage 14 years 15-17 years 18 years Sex of Child Male Female 2929(50.6%) 2860(49.4%) 189(52.4%) 172(47.6%) 3118(50.7%) 3032(49.3%) 93.9% 94.3% 1.375 0.420 2298(39.7%) 2246(38.8%) 1245(21.5%) 160(44.3%) 143(39.6%) 58(16.1%) 2458(40.0%) 2389(38.8%) 1303(21.2%) 93.5% 94.0% 95.5% 6.623**

Place of Delivery Home Hospital/Oth ers 4784(82.6%) 1005(17.4%) 307(85.0%) 54(15.0%) 5091(82.8%) 1059(17.2%) 94.0% 94.9%

Antenatal Visit During Pregnancy No At least one time 2810(48.5%) 2979(51.5%) 281(77.8%) 80(22.2%) 3091(50.3%) 3059(49.7%) 90.9% 97.4% 116.684***

*** Significant at 1%, ** Significant at 5% and * Significant at10%

Table 2: Coxs Proportional Hazard Analysis of Child Survival

95% Confidence Interval of Exp()

Variables

Upper Limit Odds Ratio [Exp()] Lower Limit

1.00

1.036

1.199

Education of mother
(Illiterate) Primary Secondary and above

1.115***

1.151***

1.058

1.253

Education of father (Illiterate) Primary Secondary and above 1.00 1.109** 1.028 1.187

Reference category is marked by parenthesis

***

Significant at 1%, ** Significant at 5%, * Significant at 10%

The child survival of urban area is higher (95.1%) than the rural area (93.6%). Among six administrative divisions, the child survival is highest (95.4%) in Khulna division and lowest in Sylhet division. Types of toilet facility and access to mass media have found positive statistical significant effect on child survival. Place of delivery, sources of drinking water and religion have no significant effect on child survival. Among the bio-demographic variables, breastfeeding status has found with significant effect on child survival. The rate of child survival is highest (99.7%) for the children whose mothers are currently breastfeeding in 24 months and above and lowest (27.45%) for the children whose mothers are not currently breastfeeding. Among the total survivals, (43.2%) survivals is found for first birth, (32.9%) and (24.0%) survivals are found in the birth order 2-3 and 4+ respectively. From the percentage of child survival, it is clear that child survival decreases steadily with birth order. The child survival rate is found highest ((95.3%) for first birth orders children and lowest (93.2%) for 4+ birth orders children. The decrease in child survival rate with birth order may reflect a more intense competition faced by higher birth order children in terms of caregivers time, medical resources and nutritious food while children needed. Birth spacing with previous child is found significant effect on child survival. The child survival rate are found (91.6%), (94.7%) and (95.4%) for birth interval with previous child, below 23 months, 24-35 months and 36 months and above respectively. These results depict that the child survival rate increases gradually with birth spacing with previous child. The highest rate (95.5%) of child survival is found for the children whose mothers age is 35 years and above and lowest

(92.4%) for the children of below 20 years mothers. Age at first marriage is an important predictor of child survival. Age at first marriage of mothers at 18 years and above is found the highest (95.5%) child survival and lowest (93.5%) for the children whose mothers marital age below 15 years. Sex of child has no significant effect on child survival. The maternal health care services variables have strong indirect influence in increasing child survival, because the mothers who sought antenatal care during pregnancy are well aware about utilization of existing health facilities and they can properly utilize such facilities when needed for their child. The result reflects that the child survival rate is found higher (97.4%) the children whose mothers receive at least one time antenatal check during pregnancy than the children whose mothers do not receive (90.9%) antenatal check during pregnancy. Table-2 presents the odds ratio and confidence interval of odds ratio for child survival. In the odds ratio, asterisk sign indicate significant variables. The significant variables are found in crosstabulation analysis have been considered as the covariate of Coxs proportional hazard model. This model is applied to identify the important factors of child survival. Since a considerable of children are still surviving at the time of interview and sothat they are considered as censored cases because their true durations of surviving can not be observed. For this purpose, the dependent variable, age at child less than five years is dichotomized by assigning the value 0 for death child and the value 1 for alive child. The child survival is significantly 1.115 times and 1.151 times higher for the children whose mothers having primary, secondary and

higher education as compared to the children of mothers who have no education. In the same way the child survival is found 1.109 times and 1.096 times more likely than the children whose fathers having primary, secondary and higher education respectively as compared to the children of father who have no education. These results clearly indicate that the child survival is increasing with increasing of parents education and it is also found that parents education has significant effect on child survival. This result may due to fact that child survival is mainly affected by environmental factors and educated parents may be more conscious to the environment where child grow up. Fathers occupation is found significant effect on child survival. The child survival is higher 1.113 times and 1.123 times and lower 0.059 times for the children whose father engage in business, service and others job respectively as compare to the children whose father engage in agriculture. This may be due the fact a service father may be higher educated and he provide better advantage (food, nutrition and health facilities) to his child than others fathers. Socioeconomic status and place of resident are important characteristics for child survival [41-46] but in this analysis, these variables have no effect on child survival. Administrative divisions are found partial significant effect on child survival. Child survival of Chittagong, Dhaka and Sylhet divisions are found 1.099 times, 1.144 times and 1.096 times more likely to compare with child survival of Barisal division. Type of toilet facility is found significant association with child survival. The child survival is found 1.240 times and 1.058 times higher for the children whose use sanitary latrine and others toilet respectively as compare to child who use open latrine. Access to mass

media is found significant effect on child survival. The child survival of having access to mass media is found 1.087 times more likely to compare with child survival having no access to mass media. Breastfeeding status of children has significant effect on child survival. The child survival is found 8.905 times, 5.488 times and 2.683 times higher for the children whose mothers currently breastfeed 11 months, 12-23 months and 24 months respectively to their children as compare to the children whose mothers are not currently breastfeeding to their children. Breastfeeding is a universal in Bangladesh, and in current analysis, it is clear that breastfeeding has significant effect on child survival. Birth order is found statistical significant effect on child survival. The child survival of birth spacing with previous child is found 1.258 times and 1.428 times significantly higher for the children of 24-35 months and 36 months birth spacing with previous child respectively as compared to the children of 23 months birth spacing. Age of mother has significant impact on child survival. The odds ratios are found 1.383 and 0.910 for 20-34 years and >34 years of mothers respectively. This implies that the child survival is 1.383 times significantly higher and 0.09 times lower for the children whose mothers age are 20-34 years and >34 years respectively as compare to the mothers age <20 years. Age at first marriage is found significant effect on child survival. The child survival is 1.319 times and 1.390 times significantly more likely to the children of mothers age at first marriage at 15-17 years and 18 years respectively as compare to 14 years. Timing of antenatal check is found significant association with child survival. The child survival is 1.871 times higher for the children whose mothers receive at least one time

antenatal check during pregnancy as compare to mothers who have not received any antenatal check during pregnancy. Conclusion This study investigates the predictors of child survival in Bangladesh. It has been utilized the national representative data from the Bangladesh Demographic and Health Survey (BDHS) -2007. Both cross-tabulation and Cox regression analysis techniques have been applied to identify the important predictors of child survival. From the anlysis several interesting decision can be made, although the analysis itself was subject to various types of problems including small sample size for survival analysis. In addition, interpretations of the findings appear to be problematic in many cases. Sometimes it is observed that logical or theoretical hypothesis are supported by the results of crude analysis (Like cross-tabulation) but are rejected as invalid when checked by those based on refined techniques such as Coxs proportional hazard model. Such a situation may be due to interrelationship between covariates. The findings suggest that parents education has been identified the most important socio-economic predictors of child survival that means child survival increase with increase in both mothers and fathers education level. The study indicates that currently working status of mother has no significant impact on child survival but in both analyses father/s occupation has played significant role in increasing child survival. Socio-economic status has found significant association with child survival by cross-tabulation analysis but it has found insignificant by Coxs proportional hazard analysis. Some

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Women Entrepreneurship Education in Economic Development

Maimuna Musarrat1 Abu Hanifa Md. Noman Bin Alam2

1 , 2 Independent researcher Department of Business International Islamic University Administration, Chittagong.

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.

Correspondence: Abu Hanifa Md. Noman Bin Alam Department of Business Administration International Islamic University Chittagong, 154/A, College road, Chittagong-4203, Bangladesh Tel: +88(031)610085 Fax:+88(031)610307 Cell: +8801678117393 E-mail: kosiralam@yahoo.com Web: http://www.iiuc.ac.bd/

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. 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 to reveal the importance of entrepreneurship education and its scope as a distinct subject in the tertiary level of education. Objectives of the study This research was mainly based on the following objectives: To present a picture of the overall situation of women entrepreneurship in South Asian regions. To evaluate the significance of education as a factor behind developing entrepreneurial capabilities

To find out the importance and prospects of entrepreneurship education in this region

Methodology The data for conducting the study has been collected 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 on

various occasions. The students also were surveyed for information related to entrepreneurship. Primary data was collected by administering written questionnaire, as well as conducting 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.
Women Entrepreneurship in South Asia Region: The following figure show women employers in developing countries:
Mal e 0.4 0.7 0.9 2.5 4.5 Female 0.1 0.4 0.3 0.8 1.1

Table 1: Employment status percentage of women and men who are employers Country Bangladesh (1995-96) Nepal (1991) Pakistan (2001-02) Sri Lanka (1998) Maldives (2000)

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 the business, 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. Findings

C o n fid e n t a b o u t s ta r tin g e n te r p r is e n o w

38% Yes No 62%

We conducted our research on different categories of people:

Category Sample Size Response (Percentage)

this statement, and corresponding percentage is as following: o o Absolutely 43% Fairly Agree 47% Neutral 10% Disagree/Highly disagree 0%

Students of Graduate studies Entrepreneurs

30

100%

o o

25

98%

From our research conducted on undergraduate students, we found that: 53% of the students at tertiary level of education wish to become entrepreneurs, while the remaining 47% prefer job to entrepreneurship.

1. From our research conducted on

entrepreneurs, we found that: 83% of the interviewed women entrepreneurs think that lack of education is a significant barrier behind developing entrepreneurship. The remaining 17% think otherwise, stating that other skills can still compensate for education.

Of these, 62% are confident about starting their enterprise with the level of education they have so far received.

67% of the students absolutely agreed with 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. 77% students think that they would require training before becoming entrepreneur, while the other 23% think they would not. Those with less education face more problems in

Importance of training

23%

Required Not required

77%

entrepreneurship than those

with higher education- level of agreement of students with

L e s s e d u c a t e d e n t re p re n e u r s f a c e m o r e p ro b le m s t h a n h ig h ly e d u c a t e d o n e s
50 45 e4 0 g3 5 a3 0 t n2 5 e2 0 c r1 5 e1 0 P5 0 A b s o l u tFe al yi r l y A g Neee u t r a lD i s a g r e eH i g h l y r A g re e D is a g r e e L evel o f A gree m en t

Training

43% 57%

Considering academic background of Entrepreneurs: o 44% of the entrepreneurs had completed up to Higher Secondary or below 22% of entrepreneurs graduate the were

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 entrep reneur s intervi ewed think that educat ion is requir ed for entrep reneur ship develo pment . 14% think it is not, while the remai ning 29% think that educat ion is not a requir ement,

but a pluspoint, for entrep reneur ship develo pment

Thos e with less educat ion face more proble ms in entrep reneur ship than those

with higher educat ionlevel of agree ment

of entrep reneur s with this statem ent, and corres pondi ng percen tage is as follow ing: o Absol ut el y 4 2 % o Fairly A gr

ee 3 3 % o Neutr al 2 5 % o Disagr ee / H ig hl y D is a gr ee 0 %

45 40 35 e g30 a t 25 n e c20 r e P15 10 5 0 Absolutely Fairly Agree Agree

Neutra

Level of Agr

Analysis our findings showed somewhat different results:

good altern ative job opport unities .

Peopl The e with reason tertiar s y Education is required for entrepreneurship behin educat d this development ion includ are e: equall y o likely Yes Contr 29% to ol No 57% becom No, but it is a plus-p oint o e v 14% entrep er reneur ti s, m althou e: gh M they os do t have jo

b p os iti o ns re q ui re a h u g e a m o u nt of ti m e to b e sp e nt at th e of fi ce . H o w e v er , o w ni n g th

ei r o w n e nt er pr is e pr o vi d es th e e nt re pr e n e ur s th e o p p or tu ni ty to h a v e c o nt ro l o v er th

ei r o w n ti m e, a n d th us al lo w in g th e m to m a n a g e th ei r ti m e ef fi ci e nt ly b et w ee n fa m il y re

sp o ns ib ili ti es , as w el l as ec o n o m ic ac ti vi ti es o Selfd e p e n d e n ce : T h e m ai n p ur p os e of e d

u ca ti o n is li b er at io n. M os t e d u ca te d p e o pl e ar e li b er al m in d e d a n d th us th e y d o n ot w

ill to b e d e p e n d e nt o n ot h er s fo r th ei r ea rn in gs . o Expre ss io n of cr ea ti vi ty : S o m e e nt re pr e n

e ur s/ st u d e nt s a d d e d th at th e y w is h e d/ w is h to e x pr es s th ei r cr ea ti vi ty th ro u g h e nt re pr

e n e ur sh ip . o Shrink in g jo b o p p or tu ni ti es : S o m e st u d e nt s ar e c o n ce rn e d th at w it h th e ri

si n g n u m b er of e d u ca ti o n al in st it ut es , a n d th er e b y gr a d u at es , m os t of th e jo b se ct or s

ar e b ec o m in g c o m p et iti v e. T h us , a su it a bl e jo b pl ac e m e nt m ig ht n ot b e a v ai la bl e fo r th

e m , le a vi n g e nt re pr e n e ur sh ip as th e b es t al te rn at iv e. o Com m u ni ty se rv ic e: St u d e nt s fr o m di

ff er e nt p ar ts of th e w or ld e x pr es se d th ei r in te nt io n to se rv e th ei r c o m m u ni ty , es p ec ia ll y w o

m e n. B ec o m in g a su cc es sf ul w o m e n e nt re pr e n e ur a n d pr o vi di n g jo b o p p or tu ni ti es fo r ca

p a bl e w o m e n w o ul d e n a bl e th e m to d o so . o Contr ol o v er e n vi ro n m e nt : S o m e st u d e nt

s e x pr es se d th ei r c o n ce rn th at a p os si bl e jo b o p p or tu ni ty m ig ht n ot pr o vi d e th e m w it h a c

o n g e ni al e n vi ro n m e nt . B ei n g w o m e n w as a re as o n th e y sh o w e d, w hi le a n ot h er re as o

n w as th e re li gi o n th e y pr ac ti ce . T h us , in th ei r e y es , b ei n g a n e nt re pr e n e ur is a b et te r

al te rn at iv e. From the above study, we have tried to create a link between education and entrepreneurshi p, keeping women as the main focus. Our study shows that though experience does count, education is still an important factor behind entrepreneurshi p. 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 entrepreneurshi p, than ever before. Benefit of E. Education Education as an aiding factor for developing entrepreneursh ip: Entrepreneursh ip education provides the knowledge and skills in areas such as marketing, organizational behavior, etc. that enable the entrepreneurs to be more successful. Though experience is an important tool, education cannot be denied as a wholeii: Educa tion may show you how to avoid pitfall s

need to claim that a major in entreprene urship will definitely turn into a successful entreprene ur, learning how to write a realistic business plan, seeing how venture capitalists actually operate and just observing successful entreprene urs in action may at least show the students of entreprene urial education some of the pitfalls and how to avoid them. Three times more likely to be selfemplo yed

Although there is no

It also found the students of entreprene urial education were three times more likely to be selfemployed, more likely to be employed full time, and less likely to work for governmen t or nonprofit entities, and to have annual incomes 27 per cent higher and own 62 per cent more assets.

Incom e of the gradu ates higher

Controlli ng for personal characteris tics, entreprene urship education increases the income

of graduates by $12,654, the studys authors deduced. Controllin g for individual characteris tics, entreprene urship graduates working for large firms earned about $23,500 more than their counterpar ts. So, even though entreprene urship education will not necessarily make a graduate another Bill Gates , maybe that entreprene urial course may be useful in the long term. With entreprene urship education, they know more,

others (like bankers, investors, corporate customers, etc.) know what these student entreprene urs are likely to know, and the entreprene urs', their firms, and national 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.

Recommendat ions Activities already undertake n 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 Empowerme nt of Women through Entrepreneurs hip Development and Leadership: The four pillars of leadership have already been discussed by nationally and internationally acclaimed speakers.

Work shops: Acces s Acade my has alread y been condu cting

works hops where studen ts had the chanc e to intera ct with renow ned presen ters. Such a works hop was condu cted on Care er Couns eling where studen ts got a chanc e to create aware ness about choosi ng their right career.

Extra Curri cular Clubs : Stude nt

Affair s Divisi on has alread y forme d differe nt clubs where it is manda tory for studen ts to partici pate (at least 1 and at best 2). There are clubs of divers e interes t group s, includ ing busine ss club where studen ts can intera ct about their ideas on formi

ng a new ventur e. Conclusion Entrepreneursh ip 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 entrepreneurs, is changing. More educated women are being involved in entrepreneurshi p in the recent days. Education cannot be denied as a significant factor behind entrepreneurshi p. 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 entrepreneurshi p. Entrepreneursh ip 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. References http://en.wikip edia.org/wiki/E ntrepreneurship http://siteresour ces.worldbank. org/PGLP/Res ources/Entrepr eneurship_Oct 17.doc Understanding entrepreneurshi p: Developing indicators for international comparisons and assessments, OECED, STD/CSTAT, 2006

The Global Entrepreneursh ip Monitor (GEM) 2006 Report on Women and Entrepreneursh ip, Babson College, and London Business School, 2007 OECD, Enhancing Womens Market Access and Promoting Pro-poor Growth, Promoting ProPoor Growth, Private Sector Development, Chapter 5, 2006. DEVELOPIN G WOMEN ENTREPREN EURS IN SOUTH ASIA: ISSUES, INITIATIVES AND EXPERIENCE S by ShaliniSinha Trade and Investment Division, UNESCAP, Bangkok, Thailand

Copyright UNESCAP 2005 Ibid.. http://www.12 3eng.com/foru m/viewtopic.ph p?p=18304 State of World Population 2005: Journalists Press Kit [http://www.un fpa.org/swp/20 05/presskit/fact sheets/facts_ge nder.htm] http://en.wikip edia.org/wiki/E ntrepreneurship _education
Economist Intelligence Unit 2007. "Can business schools entrepreneurs?" MBA, 17/04/2007 create Which

[http://www.ict seminar.org/Ne tgrowth/ICTW orkshop/] Ibid. http://www.edi india.org/ Ibid. http://www.em iindia.org/ http://www.safeer.i nfo/index1.html

Comparati ve study on Compensat ion Manageme nt:Practice s of Selected Securities firms in Chittagong Stock Exchange

s A d m in is tr at io n, In te rn at io n al Is la m ic U ni

A . M S h a h a b u d d i n C h o w d h u r y D e p a rt m e n t o f B u si n e s s A d m i n is tr a ti o n , I n t e r n a ti o

A . M . S h a h a b u d d i n C h o w d h

u r y
1

v er si ty C hi

1
D e p ar t m e nt of B u si n es

tt a g o n g

C o rr e s p o n d e n c e :

n a l I sl a m i c U n i v e r si t y C h it t a g o n g , 1 5 4 / A , C o ll e g e r o a d , C h it t a g o n g 4 2 0 3 , B a n

g l a d e s h T e l: + 8 8 ( 0 3 1 ) 6 1 0 0 8 5 F a x : + 8 8 ( 0 3 1 ) 6 1 0 3 0 7 C e ll : + 8 8 0 1 9 1 1 2 2 4 5 2 1 E m

a il : a m s _ ii u c @ y a h o o . c o m W e b : h tt p :/ / w w w .i i u c . a c . b d /

A b s t r a c t
T h e i n c r e a s i n g c o m p e t i t i v e n e s s o f t h e l a b o u r m a r k

e t a n d t u r n o v e r o f e m p l o y e e s h a d r e s u l t e d i n n i g h t m a r e i n c o m p e n s a

t i o n p l a n n i n g . T h e p e r f e c t c o m p e n s a t i o n s y s t e m p r o v i d e s p l a t f o

r m f o r h a p p y a n d s a t i s f i e d w o r k f o r c e . T h i s m i n i m i z e s t h e l a b o r t u

r n o v e r t o o . A s a t i s f i e d e m p l o y e e i s a p r o d u c t i v e e m p l o y e e a n d c a r

e s h o u l d b e t a k e n t h a t t h e y a r e f a i r l y p a i d f o r t h e i r w o r t h i n t h e o r g

a n i z a t i o n . M o s t o f t h e o r g a n i z a t i o n p a y l o w s a l a r y a n d t h e o u t p u t

i s s l o w f r o m e m p l o y e e s h a n d . H o w e v e r , e m p l o y e e s f r o m t o p g r a

d e d s e c u r i t i e s p a y h i g h w h i c h i n l o n g r u n k e e p e m p l o y e e s a n d s e r v i c

e s t a n d a r d s a r e a l s o g o o d w h i c h i n l o n g r u n i n c r e a s e p r o f i t a b i l i t y

o f t h e o r g a n i z a t i o n . I f m a n a g e r s f o l l o w t h e s e g u i d e l i n e s , t h e i r

p a y r e l a t e d c o m m u n i c a t i o n w i t h e m p l o y e e s w i l l r e s u l t i n c l a r i t y

a n d r e s p e c t . I n a d d i t i o n , t h e y w i l l a v o i d t h e m i s u n d e r s t a n d i n g a n

d r e s e n t m e n t t h a t r e s u l t s f r o m a v o i d i n g t h i s c r i t i c a l i s s u e .

e y w o r d : C o m p e n s a ti o n m a n a g e m e n t, C S E ]

Introduction Compensation Management is an integral part of the management of an organization. Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. It may achieve several purposes assisting in recruitment, job performance, and job satisfaction. It is a tool used by management for a variety of purposes to further the existence and growth of the company. It may be attuned according to economic scenario, the business needs, goals, and available resources. To be effective, the managers must appreciate the value of competitive

pay, their human resources, and have an investment view of payroll costs. Problem Statement: Todays smart companies not only want to hire quality people but they want to keep them cost effectively and efficiently. For this it is necessary to build a high employee satisfaction, motivation, and commitment by providing them several facilities. And this can be done by a effective compensation management. But there are a lot of things that can go wrong when developing an effective and efficient compensation management. 1. Dynamism in labor market.

[
K

2. High employee expectation. 3. Poor or limited budget of the organization. Thus inappropriate compensation management can neither satisfy employees nor reduce the cost of the organization. Finding the differences between compensation practices is considered to be an important element of profitable relationship with employees Objective the Study of

To know the differe nce in compe nsatio n manag ement practi ce at select ed Securi ties firms in Chitta gong stock excha nge To recom mend some sugge stions to overc ome such proble ms.

through faceto-face conversation with the officials of selected Securities firms. Questionnaire was used Data collected from 60 selected securities firm located at CSE. The major sources of secondary data that used in the report are Articles, Books, Manuscripts, CSE porikroma etc. Literature survey Byars and Rue --Compensati on refers to the extrinsic rewards that employees receive in exchange for their work. It is composed of the base wage or salary and incentives or bonuses and any benefits. Learning outcomes were also important for the teachers surveyed (Heneman and Milanowski,

The objectives are: To know the comp onents of compe nsatio n manag ement

Methodology of the Study The significant feature of the report is the use of both primary and secondary sources of data. The primary data were collected

1999), including seeing and being responsible for improvements in student performance and working collaboratively with peers. This may be rhetoric, as the actual evidence supports the hypothesis that teachers are motivated by financial rewards. While teachers in the Kentucky school-based rewards system rated school improvements as more beneficial than extra salaries in the research conducted, when teachers allocated program rewards, 98% voted to use some or all of the rewards as a salary bonus (Kelley, 1999). There was some concern in relation to goal clarity in school-wide program, meaning there would be some concern about the

motivational capacity of schools (Kelley, Heneman and Milanowski, 2002). Employees were concerned that they would not be paid the bonus upon successful completion of school-wide criteria. A striking finding in both the qualitative and quantitative data from both program sites was the low perceived probability that the bonus would actually be paid when school goals were met. (Kelley, Heneman and Milanowski,20 02).In conclusion, Kelley, Heneman and Milanowski (2002) argued, that in all models, the higher the average teacher expectancy of student results, the greater the school-based

evaluation outcomes. The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce. The sound compensation system is hallmark of organizations success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees. Compensation is a key factor in attracting and keeping the best employees and ensuring that the organization has the competitive edge in an increasingly competitive world. The Compensation Management component enables to differentiate between the remuneration

strategies and those of competitors while still allowing flexibility, control and cost effectiveness. It provides a toolset for strategic remuneration planning that reflects the organization culture and pay strategies, and it empowers line managers within a framework of flexible budget control. Compensation Management allow to control bottomline expenditures and offer competitive and motivating remuneration, be it fixed pay, variable pay, stock options, merit increases, or promotion in other words, total compensation. Compensation includes topics in regard to wage and/or salary programs and structures, for example, salary

ranges for job descriptions, merit-based programs, bonus-based programs, commissionbased programs, etc. Components of compensation Basic wages:These refer to the cash component of the wage structure based on which other elements of compensation may be structured. It is normally a fixed amount which is subject to changes based on annual increments or subject to periodical pay hikes. Wages represent hourly rates of pay, and salary refers to the monthly rate of pay, irrespective of the number of hours put in by the employee. Dearness allowance: The payment of dearness

allowance facilitates employees and workers to face the price increase or inflation of prices of goods and services consumed by him. Incentives: Incentives are paid in addition to wages and salaries and are also called payments by results. Incentives depend upon productivity, sales, profit, or cost reduction efforts. There are: (a) Individual incentive schemes, and (b) Group incentive programmes. Bonus: It can be fixed percentage on the basic wage paid annually or in proportion to the Busines profitability. Reward s Non-monetary strategy strategy benefits:These benefits give psychological satisfaction to

employees even when financial benefit is not available. Such benefits are: (a) Recognition of merit through certificate, etc. (b) Offering challenging job responsibilities , (c) Promoting growth prospects, (d) Comfortable working conditions, (e) Competent supervision, and (f) Job sharing and flexi-time.

upon the targets achieved, companies may pay a commission on a monthly or periodical basis.

fixed in advance of the profits. Skills Gap Analysis -Identifying businesscritical skills in the organization, locating potential gaps (today or in the future) in these areas, and putting in place plans to fill or avoid these gaps. Rather than taking a reactive approach, and filling your organizations existing workforce gaps, address the issue today by developing your talent before those gaps occur.

Fringe benefits:Fringe benefits may be defined as wide range of benefits and services that employees receive as an integral part of their total compensation package.

Commissions: Commission to Profit Managers and Sharing: employees may be based on the Profit-sharing sales revenue is an agreement or profits of the by which company. It is employees always a fixed Non-financial receive a share, percentage on rewards the target achieved. For Employee benefits taxation purposes, commission is Market again a taxable component of survey compensation. Pay The payment Total Pay level of commission structur remunerati and as a component e of commission on relativities is practised heavily on target Job rotation based Performance sales. pay Depending

Improved performanc e

Performance management

Employee development

LBF LTD.

16000

4 months

Festivals -2, incentive -2 and performance bonus

MEENHAR SECURITIES Ltd.

10000

do

Festivals -2 and performance

ROYAL CAPITAL LTD

8500

do

Festivals -2 and performance

GREEN DELTA FINANCIAL SERVISES LTD RASHID INVESTMENT SERVICES LTD PHP STOCKS & SECURITIES LTD

8000

3 months

Festivals -2 and performance

8000

do

Festivals -2 and performance

Figure: Total Compensation Process Findings on objectives and questionnaire: No of years established organization. Age Below 1 year 1-5 year 6-10 year Total F 9 12 39 60

10000

4 months

Festivals -2 and performance

MD. SAHIDULLAH SECURITIES LTD

8000

3 months

Festivals -2 and performance

TIMES SECURITIES LTD.

8000

Do

Do

Description:- From the table it was found that below 1 year only 15% firms started and 6-10 years 75% firms started their operations.

SWIFT CAPITAL MANAGEMENT LTD

8000

Do

Festivals -2 and performance

UNITED FINANCIAL TRADING CO. LTD.

8000

Do

Festivals -2 and performance

SAR SECURITIES LTD

Comparative analysis on compensation management of selected firms of CSE.

8000

Do

Festivals -2 and performance

SECURITIES Firms

Monthly salary

Maternity leaves

SUBVALLEY SECURITIES LTD

8000

Do

Festivals -2 and performance

GLOBE SECURITIES LTD.

8000

4 months

Festivals -2 and performance

MUTUAL TRUST BANK SECURITIES LTD.

9000

Do

Summary findings

of

SALTA CAPITAL LTD.

8000

Do

TOTAL COMMUNICATION LTD A.A.Securities Ltd

8000

Do

8000

Do

PFI Securities Ltd

8000

do

T.K.Securities Ltd Mutual Trust Bank securities

9000 9000

Do Do

Most the organi zation s are payin g tk 8000 as salary. Only Lanka bangle securit ies pay much Tk 16000 initiall y. Gratui ty has not paid in most of the compa nies except Lanka bangla securit ies. No specia l faciliti es for salary in case of treatm ent of

emplo yees while doing work. Mater nity leaves most of the organi zation are payin g 3 month s and good organi zation s are provid ing 4 month s LAN KAB ANG LA SECU RITIE S LTD., MEE NHA R SECU RITIE S LTD., ROY AL CAPI TAL LTD, GLO BE SECU RITIE S

LTD, PHP SECU RITIE S LTD. Job enviro nment is better for LAN KAB ANG LA SECU RITIE S LTD., MEE NHA R SECU RITIE S LTD., ROY AL CAPI TAL LTD but other select ed compa nies are good. Lanka Bangl a Securi ties ltd has paid incent ive

bonus other than two festiva l bonus and perfor mance bonus. Howe ver, other respon dent securit ies firms are provid ing only festiva l bonus. Recommendat ions To develop and operate a compensation system that promotes fair treatment, an organization should consider compensation strategies, such as: a) The firms should recogni ze the worth and

value of employ ees knowle dge, skills and experie nce and the n reward employ ees contrib utions. b) The firms should promot e employ ees continu ed acquisi tion and upgrad ing of knowle dge and skills. c) The firms should design compe nsation plans that succes sfully compet e within establis

hed labor market s. d) Aligni ng compe nsation of all employ ees with objecti ves and goals on the organiz ation. e) The firms should provid e a compe nsation packag e that enhanc e current lifestyl es and longteam protect ion for employ ees and their depend ents.

f) For gratuity payment, a gratuity fund is to be created to deposit

the relevant amount every year. g) Salary during treatment: During the period of treatment, employer should pay full salary for the period of their stay in hospital or half of their salary if they have undergone treatment at home. However, if the period of such treatment exceeds three months, the employer is not obliged to pay the salary. Conclusion Compensation Management is an integral part of the management of demands of the employees and competitive salaries offered by multinational companies had almost resulted

the organization. Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. It may achieve several purposes assisting in recruitment, job performance, and job satisfaction. It is the remuneration received by an employee in return for his/her contribution to the organization. The increasing competitivenes s of the labor market and turnover of employees had resulted in nightmare in compensation planning. Apart from this, the growing in a compensation war in certain industries Jobs are accepted or rejected based

in part on starting salary and the opportunity for future increases in pay. Employees compare their pay to that of others in the same line of work.The role of different components of the compensation is very important as the role of the compensation components can differ. Also equitable financial compensation is, of course, essential to building and nurturing an organization of outstanding people, unique vision, values, and goals of their organization. Also Welldesigned compensation programs are a valuable strategic asset in shaping a design firms future and aligning its members for success.

References DeCenzo, D. A., & Robbins, S. P. (2008). Human Resource Management (Third Edition ed.).New Delhi: Prentice Hall of India. Agrawal, D. G. (2057).Dynami cs of Human Resource Management in Nepal. Kathmandu: M.K. Publishers. Compensation & Compensation Management http://www.geo cities.com/wilf ratzburgcompe nsation.html http://www.di. net/articles/arc hive/effective_ compensation_ strategic_firm Components of Compensation Sarah L. Fogleman, Creative compensation, Kansas State University.

Chittagong Stock Exchange http://www.cse bd.com

http://www.hrguide.com Compensation and salary survey

Management of Government Banking in The Third World country: a case study on Agricultural Bank-Problems and Remedies
Dr. Zahrul Alam2 Mrs. Sharme en Ahmed
3

Dr. Md. Nurul Alam1

Faculty of

Business Administrati on, Chittagong University, 2 Department of Management Studies, Chittagong University, 3 Faculty of Business Administrati on, Chittagong University,

Correspo ndence: Dr. Zahrul Alam Departm ent of Manage ment Studies Chittago ng Universit y, Chittago ng 4331, Banglade sh Tel: +88(031) 2601141 Ext 4285 Fax: +88(031) 726310 E-mail: zahurul _cu@ya hoo.com Web: http://w ww.cu.a c.bd/

Abstra ct
Bangla desh Krishi Bank (BKB) consiste ntly has pursued the policy of expansi on and growth of branche s. But it is advocat ed that its perform ance is not highly satisfac tory. There might

be many reasons behind it. Among them, the proble ms involve d in manage ment might be a major one which needs to be identifie d. This paper aims at identifyi ng the proble ms involve d in manage ment at operati ve level of the BKB. The study reveals that BKBs perform ances is plainly satisfac tory but it is facing a lot of proble ms relating to manage ment

which are overdue loan, lack of investm ent opportu nity, lengthy and cumber some procedu re in obtaini ng loan, competi tion with the nongovern ment organiz ations (NGOs) ,lack of proper borrow er selectio n, inadequat e legal authorit y in taking action against the defaulte rs, lack of cooperati on from govern ment officials , lack of supervi sion, econom ic crisis of the borrow ers,

loan remissi on culture, shortag e of manpo wer, undue local politica l pressur e and interfer ence, lack of good commu nication , illegal interfer ence by the superio r officer and lack of cash holding capacit y, etc. To improve the present perform ance of the BKB proble ms mention ed above should be remove d and in this regard suggest ed recomm endatio ns may

be accepte d and implem ented.

1.1 Introduction 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) program.

participated

in

the

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 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 to identify 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 20082009. 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. 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 to diversification 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 loaners 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, microenterprise development for the monipuri credit program and special credit program for Rakhain 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 the BKB 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-officials nominated 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. Now Board of Directors of the BKB consists of 11 members including the chairman. BKB has adopted a three tier management for channeling credit at the rural area. The general outline of the system is: i) Top- level management- Head office

ii) Mid level managementDivisional, chief regional and regional offices; and iii) Operative level managementBranch offices. The overall management of the top level is vested with the Board of Directors headed by the chairman. Board of Directors makes the policy and gives the guidelines in keeping pace with national policy set by the Ministry of Finance, government of Bangladesh and Bangladesh Bank. The Board delegates authority for the day to day management to the Managing Director of the bank. Managing Director is assisted by the Deputy Managing Director (DMD) and General Managers (GMs). For smooth operation of the activities in the Head Office, Secretariat and three divisions have been set-up, such as DMD Secretariat, Planning and Operation division, Administration division and Audit and Accounts division. Each division is headed by a G M. The mid level, i.e. Divisional offices, Chief regional offices and Regional offices which are headed by Divisional Manager (Rank of GM), Chief Regional Manager (Rank of DGM) and Regional Manager (Rank of AGM) respectively. They act as liaison officers between the Head Office and the branches. They coordinate and monitor the activities of the branches. The management of the branches is the operative level management. A branch is headed by a Branch Manager whose designation varies with the size of the branch. In fact, branches are categorized depending on size, importance, deposits, loans and advances. The branches are concerned with deposit collection, disbursement of loan, recovery of loan in line with the policies and decisions made by the top level management. Analysis and Findings 3.0 Business Scenario of the BKB

Deposit, loans and advances, recovery of loans and advances are the main segments of business of the BKB . Segment wise business of the BKB branches operating in Chittagong district from FY2005-06 to FY 2009-10 are examined here to evaluate the operational performance of the BKB. 3.1 Deposit Performance of the BKB Deposit is the main source of fund for BKB. It keeps the pulse of the BKB on the track. In BKB such deposits are found to be of three types-current & other, savings and terms deposit. The deposit position of the branches of the BKB operating in Chittagong district from FY 2005-06 to FY 2009-10 is shown in Table # 1. Table # 1: Deposit Collected by the Branches of the BKB during FY 2005-06 to FY 2009-10
FY Deposit (in croreTk) 981 1095 1227 1354 1536 6193 1238.6 194.36 555 Increase(in core Tk) Increase in % age -114 132 127 182 555 --11.62 12.05 10.35 13.44

1536 crore. The highest deposit of Tk. 1536 crore was in FY 2009-10 which was 13.44% higher than the previous FY 2008-09. Table 1 further reveals that during the mentioned period mean deposit of the branches was Tk. 1238.6 core with a standard deviation of Tk. 194.36 crore and the range of deposit was estimated at Tk. 555 crore. In this connection, the authors may examine the actual deposit collection against the target deposit. Table 2 shows the picture:
Table #2 Actual Deposit and Target Deposit of the Branches of the BKB during Fy 200506 to FY 2009-10. FY Actual deposit (in crore Tk.) 981 1095 1227 1354 1536 6193 1238.6 Targeted deposit (in crore Tk.) 1148 1282 1226 1203 1288 6147 1229.4 100.75 % achieved over target 85.45 85.41 100.08 112.55 119.25

2005-06 2006-07 2007-08 2008-09 2009-10 Total Average

2005-06 2006-07 2007-08 2008-09 2009-10 Total Mean Standard deviation Range

Source: BKB Divisional Office ,Ctg.

Source: Consolidated Deposit Statement Prepared by BKB Divisional Office, Ctg. It is seen from the table 1 that the total deposit during the study period fluctuated between Tk. 981 crore to Tk.

From the table 2, it is evident that the deposit performance of the branches of the BKB operating in chittagong district is satisfactory. The percentage achieved over target deposit during the study period was 85.41% to 119.25% and the branches achieved their deposit target in the FY 2007-08, FY2008-09 and FY 2009-10 which was 100.08%, 112.55% and 119.25% respectively. The table also reveals that the average deposit rate over target was 100.75%.From this point of view, it can be said that the deposit performance of the BKB is satisfactory.

3.2

Loan Disbursement Performance of the BKB

BKB provides three types of loans short medium and long term loans. But the contribution of medium and long term loan is insignificant. The loan disbursement position of the branches of the BKB operating in chittagong district from FY 2005-06 to FY 2009-10 is shown in table 3.
Table # 3 Disbursement of Loan by the Branches during FY 2005-06 to FY 2009-10 BKB

range of loan disbursement during the study period was Tk. 113.38 crore and Tk. 408 crore respectively. In this connection, the authors wish to examine whether the branches of the BKB could achieve their loan disbursement target following Table 4 shows the picture:
Table # 4 Actual Loan Disbursement and Target Loan Disbursement of the Branches of the BKB during FY 2005-06 to FY 2009-10.

FY

Loan Disbursement (in crore Tk.) 471 472 521 634 879 2977 595.4 113.38 408

Increase (in croreTk) -01 49 113 245

Increase in % age --0.21 10.38 21.69 38.64

FY

Actual Loan disbursement (in Crore Tk.) 471 472 521 634 879 2977 595.4

Targeted Loan disbursement (in Crore Tk.) 428 498 515 556 683 2680 536

% achieved 110.05 94.78 101.17 114.03 128.70

2005-06 2006-07 2007-08 2008-09 2009-10 Total Mean Standard deviation Range

2005-06 2006-07 2007-08 2008-09 2009-10 Total Average

111.08

Source: BKB Divisional Office, Ctg.

Source: Consolidated Loan Disbursement Statement prepared by BKB Divisional Office, Ctg.

It is seen from the table 3 that loan disbursement by the branches of the BKB operating in chittagong district during the study period fluctuated between Tk. 471 crore to Tk. 879 crore. The highest disbursement of Tk. 879 crore was in FY 2009-10 which was 38.64 higher than the FY 2008-09. Data of table 3 also indicates that the rate of increase of loan disbursement during the period fluctuated between 0.21% to 38.64% over the previous year and the average of loan disbursement was Tk. 595.4 crore. Moreover, the same table further expresses that the standard deviation and

From the table 4, it is evident that the loan disbursement performance of the branches of the BKB operating in chittagong district is satisfactory. The average rate of disbursement to target

from FY 2005-06 to FY 2009-10 was 111.08%. The percentage achieved over target disbursement during the study period was between 94.78% to 128.70% and the branches achieved their disbursement target in each study period excluding FY 2006-07. The table also reveals that performance of loan disbursement in FY 2008-09 and FY 2009-10 is highly satisfactory. 3.3 Loan Recovery Performance of the BKB Recovery of banks loan is the main source of reinvestable fund and business development of the bank. Loan discipline calls for recycling of loanable fund through timely recovery of loans extended earlier. Poor recovery performance affects adversely the liquidity position of the banks and increases their dependence on refinance facilities. Loan recovery position of the branches of the BKB operating in chittagong district during the FY 2005-06 to FY 2009-10 is shown in Table 5.
Table # 5 loan Recovery Position of the Branches of the BKB during FY 2005-06 to 2009-10.
FY 2005-06 2006-07 2007-08 2008-09 2009-10 Total Average Standard deviation Range Loan recovery (in Crore Tk.) 405 481 481 639 935 2941 588.2 189.42 530 Increase (in CroreTk) -76 -158 296 Increase in % age -18.77 -32.85 46.32

was 32.85% in FY 2008-09 and 46.32% in FY 2009-10 compared respectively to FY 2007-08 and Fy 2008-09. Data of Table 5 also indicates that the average recovery was Tk. 588.2 core with a standard deviation of Tk.189.42 crore and the range of recovery was calculated at Tk. 530 crore. But the recovery performance of FY 2007-08 is not satisfactory. In this connection, the authors may now examine the fulfillment of the recovery target of the branches of the BKB. Table 6 presents the same. Table# 6 Actual Recovery of Loans and Targeted Recovery of Loans of the Branches of the BKB During FY 2005-06 to FY 2009-10
FY Actual Loan recovery (in crore Tk.) 405 481 481 639 935 2941 588.20 Targeted Loan recovery (in crore Tk.) 264 324 388 389 584 1949 389.8 150.90 % age achieved over target 153.41 148.46 123.97 164.27 160.10

2005-06 2006-07 2007-08 2008-09 2009-10 Total Average

Source : BKB Divisional Office, Ctg. It is evident from the table 6 that the branches of the BKB operating in Chittagong district could achieve their recovery target under the study period. The percentage achieved over target was between 123.97% to 160.10% and the average recovery rate over target was 150.90%. From this point of view, it can be said that the recovery performance of the branches of the BKB is highly satisfactory if the information provided by the BKB divisional office are correct. Here the authors may now examine the position of overdue loans of the branches of the BKB from FY 2005-06 to FY 2009-10. Table 7 presents the picture

Source: Consolidated Loan Statement Prepared by the BKB Office, Ctg.

Recovery Divisional

It is seen from the table 5 that the loan recovery performance of the branches of the BKB operating in chittagong district during FY 2008-09 and FY 2009-10 is satisfactory. The increase rate of recovery

Table #7 Overdue Loans of the Branches of the BKB. During FY 2005-06 to FY 2009-10 FY Overdue Loans (in crore Tk.) 840 864 958 1093 1209 Increase (in crore Tk.) -24 94 135 116 Increase in % age -2.86 10.88 14.09 10.61

Table # 8 Net Profit Performance of the Branches of the BKB during FY 2005-06 to FY 2009-10. FY Net Profit earned (in crore Tk.) 63 82 110 131 148 534 106.8 31.07 85 Increase (in croreTk) Increase in % age

200506 200607 200708 200809 200910

2005-06 2006-07 2007-08 2008-09 2009-10 Total Average Standard deviation Range

-19 28 21 17 85 17

-30.16 34.15 19.09 12.98

15.92

Source: Consolidate Recovery and Overdue Loans Statement Prepared by BKB Divisional Office, Ctg.

Table 7 reveals that the overdue loan of the branches of the BKB operating in Chittagong district increased from FY 2005-06 to FY 2008-09. During that time, the percentage increase of overdue loans fluctuated between 2.80% to 14.09%. But in FY 2009-10, the rate of increase of overdue loans declined which was 10.61%. From this picture it is clear that BKB is not able to perform its loan recovery function efficiently though it achieved the recovery target. Increase of overdue loans will be the main problem on the way of achieving loan disbursement target and this will make loss of the BKB. This is not a good sign. 3.4 Net Profit Performance of the BKB Net profit refers to the excess of revenue over expenditure. It acts as the index of sustainability. Although BKB emphasizes on agricultural and rural development, profit is required to keep the financial viability and sustainability. Following Table 8 shows the net profit position of the branches of the BKB operating in Chittagong district during FY 2005-06 to FY 2009-10.

Source: BKB Divisional Office, Ctg.

Table 8 shows the year wise net profit of the branches of the BKB operating in Chittagong district from FY 2005-06 to FY 2009-10. It is evident from the table that during the period of 2005-06 to 200910 trend of net profit of the BKB increased. Net profit stood at Tk. 148 crore in FY 2009-10. While in FY 200506, it was Tk. 63 crore and average increase of net profit was 15.92%. Table 8 also indicates that the average net profit figure was Tk. 106.8 crore with a standard deviation of Tk. 31.07 crore and the range of net profit was calculated at Tk. 85 crore. This picture indicates the good profit performance of the branches of the BKB operating in Chittagong district. 4.0. Problems of Management of the BKB 4.1. Problems Associated with Loan Disbursement Overdue loan is the number one problem associated with loan

disbursement of the BKB. Due to overdue loan, it is very difficult for the bank to fulfill the target of loan disbursement. Overdue loan reduces the scope for further disbursement. Because defaulters are not eligible for fresh loan. Besides, the recovery rate of overdue loan is not satisfactory and as such the bank refrains from sanctioning loan. This is considered as a serious problem by 100 percent of the respondents. (Vide Table 1 of appendix)

the borrower has to go to land revenue office. As such, the borrower takes much time to get loan and subsequently the bank can not fulfill its loan disbursement target, (This is another cause identified by 100 percent of the respondents (Vide Table 1 of appendix). Competition with the non-government organizations (NGOs) is another problem in loan disbursement. NGOs lending procedure is easier than the BKB. According to the BKBs managerial people, majority of the landless and marginal farmers being illiterate, ignorant and little informed do not take trouble to come to bank to follow certain formalities. They are so much shy that they do not want to talk face to face with the officials and the staff of the bank. Due to shortage of manpower, the bank can not communicate with tem from time to time. But the NGOs have got sufficient skilled and trained manpower who always keep communication with the poor marginal and landless farmers and also with the women. As a result, the BKBs landless and marginal farmers credit program, and also swanirvar (self-reliant) credit program do not become significantly effective. And this is also a hindrance to achieve the target of loan disbursement. This is another problem identified by 21 percent of the respondents (Vide Table 1 of appendix). 4.2Problems Associated with Loan Recovery Proper borrower selection is also a problem in loan recovery of the BKB. Selection of borrower is a very important factor. During the time of borrower selection, lending institutions need to examine the credit worthiness of the borrower in details. In many cases, due to shortage of field staff or due to shortage of time, the BKB cannot study the credit worthiness of the borrowers. As a result, the loan provided by the BKB goes to the

Lack of investment opportunity is another problem in loan disbursement of the BKB. Term loans provided by the bank are security based. Any borrower intending to obtain term loan must produce evidence of land ownership in the form of mutation receipt, partition deed and up to date rent receipt. But collection of such documents is cumbersome and costly. As such no new entrepreneur comes forward for term loans and as a result, loan disbursement target is not achieved. This is reported by 53 percent of the respondents (Vide Table 1 of appendix). Lengthy and cumbersome procedure in obtaining term loan is another problem in loan disbursement. A borrower intending to take loans, especially term loan, has to offer collateral security in the form of clear title of land or building which is readily marketable. But very often it is very difficult to produce such collateral timely. In a system of joint families land is often held jointly. Loan agreement requires that each of the joint owners signs the agreement or else a partition deed with mutation of the record of rights is produced. This is by itself a lengthy and cumbersome procedure requiring repeated visits to the office of the assistant commissioner (AC) land. In addition, a rent receipt showing up to date payment of land revenue is required and for this

false people of the rural area. The false people are known as tout and they never repay the loan. Touts are reportedly in the shelter of the local political leaders of the different political parties of the country. This is why, the BKB is not able to recover loan from them. 26 percent of the respondents expressed this view (Vide Table 2of appendix) Lack of power in taking drastic or appropriate legal actions against the defaulters is one of the major problems in loan recovery. Allocation of resources in rural area is essentially a political function. It assumes greater significance in the context of Bangladesh which forces successive Government to keep the rural voters happy. Each Government of Bangladesh has used the BKB as a political instrument. But they do not cooperate strongly to recover of loan. Besides, due to social stigma as well as because of the unduly long process and long time legal actions hardly produce any concrete result. All these have tended to increase the cost of loan of the BKB. Furthermore disposal of certificate cases (cases filed under public Demand Recovery Act, 1913) takes a long time because of inadequate man power in the courts. Cases legend the due date of repayment of loan. As a result, the branch managers of the BKB are discouraged to take strong legal action against the defaulters due to want of full co-operation from the Government. 63 percent of the respondents expressed this view (Vide Table 2 of appendix) Lack of co-operation from Government officials is also a problem in loan recovery. Co-operation from the Government officials is helpful to have a good recovery of loan. But the Government officials have no directives from the Government to help BKB if required. Most of the Government officials do not extend help to BKB. 47

percent respondents stated this opinion (Vide Table 2of appendix). Lack of supervision is a general problem on the way of loan recovery. Monitoring, supervision and control of loan in every stage of loan management is an important and very essential factor to ensure the proper utilization of loan. If the utilization is not supervised, the loans tend to use the loan for immediate consumption purposes. When the loan is not invested in income-generating activities, the borrowers cannot repay it and become defaulters. 39 percent respondents expressed this view (Vide Table 2 of appendix). Economic crisis of the borrowers appears to be a crucial problem. Almost every year flood, cyclone and tidal-bore breaks out in the country. This natural calamities damage crops of the fields and floats away the cattle and various agricultural implements of the peasants. As a result, the loanee peasants suffer from economic crisis and can not repay the loan in due time. Not only this, in many time, loanee peasants do not get reasonable price of the goods produced by them. Sometimes, the sale proceeds of the goods is less than that of the cost spent behind them. As such, they are compelled to consume the sale proceeds and can not pay off their debts of the BKB. 32 percent respondents stated this opinion (Vide Table 2 of appendix). Loan remission culture is also a bar in recovery of loan. Each Government of Bangladesh wanted to keep the rural voters happy. They did it to adopt a liberal policy for agricultural credit and to declare write off and remission of loan including interest. So, in many times the Government of Bangladesh declared that loan up to a certain level need not be paid due to flood. In the year 2007 the

Government has also directed the BKB for stopping loan recovery activities in flood affected area. This type of declaration and direction by the Government breaks the loan recovery discipline. Loanees think that loan would not be repaid. They also think that it is a grant from the Government. 38 percent respondents stated this opinion (Vide Table 2 of appendix). 4.3Other Problems The Branch Managers of the BKB encounter some other problems and difficulties in running their affairs smoothly and efficiently. These have direct impact on the overall efficiency of the operative level management of the BKB. Some relevant information regarding this respect are: Shortage of manpower is the main problem in managing the affairs of the branch. Volume of work to be done is more than the capacity of the existing manpower. (100 percent of the respondents expressed this problem Table#3). Local political pressure and interference is agreat problem. The nature of interferences are as follows:(a) creating barrier in selection of loanees; (b) creating hindrance in recovery of loan from the influential defaulters; and (c) compelling the Branch Manager for providing loans to those who are not eligible. In addition, local power structure is to be satisfied; otherwise, it is really very difficult to work smoothly. 37 percent of the respondents stated this view (Vide Table 3 of appendix) Lack of good communication is another crucial problem in managing the affairs of the branch, especially in the island area. Due to lack of good communication facilities the Branch Managers and the staff of the BKB can not keep communication with their loanees

regularly. They are to go to the field on foot or by rickshaw. This is also expensive and troublesome. This problem hampers the recovery performance which has direct impact on the overall efficiency of the branch. 32 percent of the respondents stated this view (Vide Table3 of appendix). Illegal interference by the superior officer causes difficulty in running the day to day affairs of the branch. Some superior officers of the BKB are dishonest. They always try to earn in addition to their monthly salary through exercise their power on the subordinate officers. As a result, they generally come forward for recommending loans to the influential political leaders. Not only this, they press the bank staff not to recovery loan from them. As such, the Branch Manager falls in difficulties in running the affairs of the branch. 5 percent of the respondents stated this view (Vide Table3 of appendix). Lack of cash holding capacity exceeding Tk. one lakh and want of cash save volt are also problem for a Branch Manager. It has become very difficult to arrange deposit from the solvent parties due to inability of honoring cheque on demand. It is important to note that this problem was stated by the Managers of the BKB branches which are located in coastal area and these were the union level branches. 32 percent of the respondents stated this view (Vide Table3 of appendix). 5. Suggested Recommendations On the basis of previous discussions the following recommendations are suggested for solving the revealed problems and improvement of BKB management in Bangladesh.

 Due to shortage of manpower, the work of supervision is not being properly done. It is recommended that more manpower should be recruited and posted so that the investigation of each fresh loan case can be done timely and rightly. In addition, end-use of the old loan cases can be ensured by them. In short, the writers propose that the whole credit system of the BKB be made a system of supervised credit which will help check the diversion of use. Supervised credit is a must in financing the rural poor. Without close supervision, the rural poor may not be able to return the money to the bank. Supervision and follow-up ensures adequate and timely credit for specific purposes and the use of funds for the purposes for which they are granted. Effective supervision prevents miss-use of funds and keeps the borrowers aware of their obligations. Procedural complexities of lending are slowing the flow of term loan to the rural people. Bureaucratic and complicated lending procedures are eliminated so that they are more attractive and accessible to the rural people. BKB does not provide term loan without collateral. But collection of collateral is very difficult. This difficulty drives many formal borrowers to the moneylenders and compels them to contract loans at a high cost. As a result, amount of term loan disbursed by the BKB has been reduced. For increasing the amount of term loan disbursement, it is suggested that the BKB should minimize the requirements of

collateral and make loan-giving procedure more flexible. A large number of rural populations have no collateral security to offer for taking loan. This group comprising landless and land-poor (marginal farmers) has been kept mostly outside the reach of the bank on the mercy of moneylenders. But uniform socio-economic development of the country cannot be expected unless these groups are taken care of by the institutional sources of credit. It is recommended that these landless and land-poor classes should be given loan by the BKB without taking any collateral security. Policy of loan remission by the Government of Bangladesh should be stopped. Remission of loan adversely affects the repaying habit of the borrowers. It breaks down the discipline of loan recovery. Borrowers think that loan received from the BKB will not be repaid. It is a grant or relief from the Government. All types of trade union activities should be banned from the BKB. Trade union is not good for an organization. It disturbs the management and creates problems. Notices should be served in time. To remind the borrowers in time, demand notices should be issued at least one month ahead of the loans becoming due from them. Personal contract should always continue to ensure recovery of the loans. Besides, legal notices, special notices etc. are to be issued in due course. Defaulter list should be prepared within July each year and kept

up to date to facilitate making personal contact, proper monitoring and follow-up. This list should be sent to the UpazilaNirbahi Officer (UNO) requesting his help and cooperation for recovery of loans from the defaulting borrowers. It is recommended that the BKB officials should maintain constant liaison with the UNO and convince him of the importance of timely recovery of loans and recycling of the fund for carrying out lending activities by the bank. Co-operation of local Government officials is required to recover loan in time. This involves some costs. But the Branch Manager cannot entertain them even with a cup of tea officially as there is no provision for Entertainment Allowance. It is recommended that Entertainment allowance of the Branch Manager be introduced which will help getting co-operation from the government officials. Repayment position of the loanees are not so good. For better repayment, it is recommended that loanees should be rewarded through paying further more interest rate rebate and offering access to larger further loans for timely repayment and penalized through foreclosure and denial of future access to loans for defaulting. Target of sector-wise loan disbursement be fixed giving appropriate weight to the opinion of the Branch Manager concerned for achieving sectorwise loan disbursement target.

The traveling allowance rate be increased for encouraging the BKB officers and staff to go to tour frequently which will help improve loan disbursement and recovery position. Monitoring, supervision and follow-up are essential to ensure proper use and better recovery of loan. It is suggested that close supervision and follow-up should be made compulsory by the BKB to ensure proper use and better recovery of loan. Field staff should be given promotion within reasonable time to make them sincere and serious in performing their duties. Concluding Remarks BKB is a significant financial institution in agricultural and rural credit of Bangladesh. It is making positive contribution towards agricultural development of the country. Through mobilizing resources from the population of different socio-economic strata, BKB meeting the growing needs in agricultural and rural credit. The study revealed that collection of deposit, loan disbursement and loan recovery of the organization increased from year to year. But it cannot exercise its due part in this regard because of several managerial problems as focused in this study. In the light of the focused problems some concrete recommendations have been suggested. It is expected that if these recommendations are implemented, the managerial problems will be resolved and the effectiveness and efficiency of the BKB will be significantly improved in near future. References Government of the Peoples Republic of Bangladesh, Bangladesh Population

Census (1991), Dhaka: BBS, December 1972 Government of the Peoples Republic of Bangladesh, Bangladesh EconomicReview (2008), Dhaka : Ministry of Finance, March 2009 Government of the Peoples Republic of Bangladesh, The First Five Year Plan, (1973-1978) Dhaka: Planning Commission,1973 Government of the Peoples Republic of Bangladesh, Activities of bank and financial institutions (2008-2009), Dhaka: Ministry of finance, 2009 Government of the Peoples Republic of Bangladesh, The Two Year Plan (197880),Dhaka: Planning Commission,1978 Alam, Md. Nurul,(2003), Practical Management Scenario of Rural Finance: A Study of the Bangladesh Krishi Bank in Greater Chittagong District, An unpublished Ph. D. Thesis, University of ChittagongBangladesh Bank Annual Reports (different issues)

Bangladesh Krishi Bank Annual Reports (different issues) BKB 1973 Order,

Agricultural Credit in Bangladesh, PIB Press, 3 Circuit House Road, Dhaka, April 1990 Roy, Mihir Kumar and others, Role of Banks and rural Developments A Study of Some Rural Branches in Comilla, BARD,Kotbari Comilla, June 1998 Rahaman, A.H.M.Habibur, Performance of Small Industry Credit Programmes in Bangladesh Finance and Banking , Journal of Fianace and Banking Department , University of Dhaka, Vol, 2 No, 2, Dec. 1992

Annual Consolidated Statements of Deposits ,Loan Disbursement, Loan Recovery and Overdue Loans Prepared by BKB Divisional Office, ctg(2005-06 to 2009-10) Ahmed, J.U. &Hossain, M.K Achievement Dynamics of the BKB: An Analysis of Basic Variables And their Projections , Finance and Banking , Volume 1, number 1, 1991 Ali A.M.M Shawkat,

Appendix

Table 1 Problems Associated with Loan Disbursement Problems 1.Overdue loans 2.Lack of investment opportunity 3.Lengthy & cumbersome procedure 4.Competition with the non-government organizations Source: Field Survey

Table 2 Recovery Problems

Problems Associated with Loan

1.Lack of proper borrower selection 2.Lack of strong legal action taking power against the defaulters 3.Lack of co-operation from Government officials 4.Lack of supervision 5.Economic crisis of the borrowers 6.Loan remission culture Source: Field Survey

Table 3 Other Problems Associated with Operative Level Management Problems 1.Shortage of manpower 2.Local political pressure and interference 3.Lack of good communication 4.Illegal interference by the superior officer 5.Lack of cash holding capacity Source: Field Survey

ii