Comprehensive study on the procedures and analysis employed by IDLC Finance PLC in determining the eligibility and loan approval for corporate clients

Abstract

This internship report has been written as part of my degree requirements for the Bachelor of Business Administration (BBA) program at BRAC Business School, BRAC University. As mandatory component of the degree completion, students are required to fulfill a three-month internship at a legitimate institution to gather experience, knowledge and expertise that can help provide insight to prepare the report presented. This internship report is organized into three sections. The first section provides an overview of the internship period, outlining the responsibilities and day-to-day activities of an intern under corporate division, and challenges encountered. It also includes constructive suggestions aimed towards improving the practices of IDLC Finance PLC’s internship program. The second section offers a detailed organizational analysis of IDLC Finance PLC as a leading non-banking financial institution in Bangladesh. It begins by discussing the company’s primary ethos along with the vision, and mission statements followed by an in-depth examination of its departmental functions. The management practices are assessed with a focus on leadership practices and recruitment planning done by the human resource department, while the marketing function is analyzed using the STP (Segmentation, Targeting, Positioning) framework and the marketing mix (Four Ps). To examine the financial aspect of the company, a thorough five-year analysis where done based on their annual report along with ratio analysis. At the conclusion of the section, an assessment of IDLC’s competitive stance conducted within the financial sector through Porter's Five Forces, SWOT analysis, and GAP analysis. The third and last section is the project which explores the procedures of corporate client acquisition and the loan approval process used within IDLC Finance PLC. It examines the responsibilities of relationship managers and associate relationship managers in acquiring clients. Also expands on the structured procedures required to get loan approval. The section includes a case study approach of a hypothetical corporate client, using altered data based on actual financial data to provide legitimacy to assess the financial and operational activities a company. Key elements such as CIB (Credit Information Bureau) reports, liability exposure with other financial institutions, and the DSCR (Debt Service Coverage Ratio) are analyzed to showcase the credit assessment process employed by IDLC Finance PLC. Lastly, the loan approval process is explained through its three-tier structure, involving the Credit Risk Management department, the Credit Evaluation Committee, and the Board of Directors. The report concludes by identifying process limitations and providing detailed improvement alternatives. It presents two projects to develop a database system and revamp the existing loan approval service (OCAS). A cost-benefit analysis is done reflect the beneficial outcome of implementing the projects. Thus offering quantified recommendations that can make the processes more efficient and effective.