This study is an effort to examine the effectiveness of SME loan of Rupali Bank Limited (RBL) through the adequacy, utilization and repayment of credit, profitability of SMEs and impact of loan among the borrowers. One hundred SME borrowers of the RBL in Mirpur area of Dhaka North City Corporation were randomly selected out of which 25 were from each of hotel and restaurant, beauty parlor, readymade garments and construction shop. Both tabular and econometric techniques were used to analyze the collected data. The study revealed that the construction shop owners’ saving were more satisfactory compared to other SMEs because of good earning capability. The adequacy and time requirement for getting loan were satisfactory which reflected RBL’s urge and sincerity to work in favor of small and medium entrepreneurs of the country. SME borrowers were found conscious about purposive utilization of loan money and their repayment performance was more or less satisfactory. Considering all SMEs together, impact of SME loan on family income was ranked the highest. Readymade garments’ cost was largest while it was lowest for the construction shop to obtain loan from the bank. Profitability of SMEs was moderate and the relationship between credit and profitability reflected the valuable contribution of credit in SME business. Corruption at loan sanctioning, lower productivity and contraction of market demand for the product were the major problems of SME financing. The RBL needs to apply flexible formalities and lower rate of interest for SME loans in order to bring effective impact among the borrowers.

Keywords: SME loan, loan adequacy, utilization, repayment, profitability, effectiveness

Credit is an important factor for triggering agricultural growth when it is utilized properly. This study aimed at examining the credit utilization pattern and repayment behavior of the farmers using cross sectional data of 80 farmers belonged to five different villages under Mirpur Upazila of Kushtia district in 2009. Respondents were grouped into small, medium and large farm size and analysis was done accordingly. The study revealed that the lion’s share of loaned money was utilized productively which indicated borrower’s positive attitude towards productive utilization of credit in the study area. Overall loan recovery scenario was found to be quite satisfactory. Self-consciousness and hope of getting future loan were reported by most of the borrowers as major factors of timely loan repayment. Econometric result shows that respondents’ education, farm size and household income were statistically significant contributing factors towards loan repayment behaviour of the respondents.

Keywords: Farmer’s behaviour, credit, loan utilization, repayment