IPDC Finance: The transformational pioneers of NBFIs in Bangladesh
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Friday
February 03, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
FRIDAY, FEBRUARY 03, 2023
IPDC Finance: The transformational pioneers of NBFIs in Bangladesh

Panorama

Adiba Hayat
28 November, 2021, 03:25 pm
Last modified: 28 November, 2021, 04:26 pm

Related News

  • NBFIs can no longer borrow from call money market: Cenbank
  • NBFIs must give one month's notice to borrowers for hiking interest rate
  • New guidelines on filling up top posts at state banks, NBFIs
  • Default loans in NBFIs rise over Tk1,000cr in 3 months
  • IPDC participates in National SME Fair 2022 as gold sponsor

IPDC Finance: The transformational pioneers of NBFIs in Bangladesh

As IPDC turns 40 today, we take a look back at how the institution gracefully laid out the path, as a leader, of how financial institutions should work for the people and with the people

Adiba Hayat
28 November, 2021, 03:25 pm
Last modified: 28 November, 2021, 04:26 pm
Mominul Islam, the Managing Director of IPDC
Mominul Islam, the Managing Director of IPDC

In 1981, when Bangladesh was a newly independent nation that lacked footing on almost every aspect, struggling with finances was commonplace. 

The struggle was real for both the people and the state as there was relatively no industrial foreground for the country and its people to fall back on financially. What was needed was an institution that would play a pivotal role in developing the country's industrial landscape.

To address the gap, in 1981, the Industrial Promotion and Development Company of Bangladesh Limited was formed as the country's first private non-bank financial institution with the Bangladesh government, along with a distinguished group of development agencies, to help Bangladesh achieve financial independence in a shorter time frame.

In the beginning, the focus was solely on financing industrial projects until 2015. Then, Switzerland-based investor, The Aga Khan Fund for Economic Development transferred its stake to BRAC - the largest non-governmental organisation of the world and its allies. 

The company's name was changed to the IPDC Finance Limited as it shifted its focus to small and medium-scale clients instead of large, industrial ones. 

The new board of the financial institution chalked out a renewed business focus that left more room for innovation and exploration of the areas that would address Bangladesh's socio-economic and sustainability priorities. 

Since then, this groundbreaking financial institution has been leading the country's financial growth mechanisms, financing SMEs and women-led businesses for the lowest cost and the highest benefit through its multiple support projects. 

And today marks 40 years of IPDC Finance being the country's most reliable and fastest-growing financial institution.

40 years of servitude and a myriad of projects

Regarding IPDC's journey, Mominul Islam, the Managing Director of the financial institution, said, "IPDC has been playing an instrumental role in industrial development from an early stage when private commercial banks first arrived in the country. But we survived a difficult period from 2005 to 2006 when non-performing loans increased to alarming levels."

However, IPDC had managed to become one of the most efficient lenders of the country as it managed to keep its non-performing loans within one-tenth of the industry average. 

Recalling the beginning of his journey at IPDC, Islam said, "This was when I joined IPDC as the Head of Operations. Since then, we have tried to build a robust risk management framework, governance policy and recover the bad loans. The organisation has grown since then by improving the whole system."

IPDC's reliability is further strengthened by its eminent Board of Directors that include highly respectable personnel from the Government of Bangladesh, BRAC, Ayesha Abed Foundation, Bluechip Securities Limited and RSA Capital Limited, among others. 

For the last 40 years, IPDC has been striving to improve those sectors of society that often go unnoticed. To address these issues, IPDC has established many innovative projects that not only look good on pen and paper but also perform to generate maximum benefit for its users. 

This includes a five-year strategic paper that ensures change and development by realigning its focus on youth, women and other underserved areas.

IPDC currently has a project called 'Joyee' that distributes a small amount of SME loans to women entrepreneurs at the lowest interest rates to motivate more women entrepreneurs to enter the country's business zones.

"We believe that women entrepreneurs and SMEs will become a huge force in the next 10 to 15 years," said Islam.

IPDC also designed a blockchain-based supply chain finance platform 'Orjon,' which is the first of its kind in Bangladesh, to support micro and small entrepreneurs with low-cost loans. 

A similar project called 'Dana' was initiated by IPDC, which has proven to be a much-needed initiative to help the vast network of micro and small retailers across the country. 

'Dana' was designed keeping in mind accessibility and transaction-based working capital for retailers to facilitate financing in a low-cost, collateral-free and structured manner. 

Regarding 'Dana' and its successful run, Islam commented, "For any industry, the key factor for success is reaching the segments of customers that remain unserved." 

With 75 percent of approximately 1.3 million micro-merchants being unbanked, IPDC found its ground. Retailers from remote areas who were out of financial inclusion are given access to finance under the DANA platform to enrich their business. With the enhanced income and higher standard of living, clients are destined to grow unbound.

As part of its long-term plans to serve the country, IPDC plans to go beyond the numbers to create a positive impact on society and people's lives by providing affordable home loans, going beyond the prospect of megacities, supporting women entrepreneurs and SMEs, and bringing convenience at home with a vision to become the most passionate financial brand.

IPDC's strategy to serve the underserved sectors of the society and economy is not empty words. It proved to be quite a successful one over the last few years as the financial institution has grown its portfolio to over Tk4,500 crore from less than one-fifth of that amount.

IPDC's success so far has been monumental, growing twice as much relative to other financial institutions in the country. Speaking of the success story, Islam opined that time-befitting initiatives and visionary targets have helped IPDC become a leading non-bank financial institution (NBFI).

He continued, "We noticed that the real estate sector was neglected as banks and NBFIs were mostly financing homes in Dhaka and Chattogram. But we decided to finance homes outside these two cities. This led us to introduce 'Bhalo Basha,' a nationwide affordable home loan service, which we started last year."

The strategies and tactics adopted, tested and employed by IPDC Finance have acted as a torchbearer for the NBFI industry of the country. In the period of four decades, it has created a proven path of success for other financial institutions of Bangladesh to follow. 

Features / Top News

IPDC / NBFIs

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • International Monetary Fund logo : AP via UNB
    IMF sets time-bound reform agenda as it releases first tranche of loan
  • Shipped Bhola gas to cost higher, yet cheaper than spot LNG
    Shipped Bhola gas to cost higher, yet cheaper than spot LNG
  • The trio spearheading the revival of book cover designs
    The trio spearheading the revival of book cover designs

MOST VIEWED

  • The trio spearheading the revival of book cover designs
    The trio spearheading the revival of book cover designs
  • Andy Mukherjee. Sketch: TBS
    What makes India's billionaires' support special for Adani
  • While the Padma bridge in operation is changing the lives of millions in the south for the better, passenger rush to Shimulia ghat died down. Photo: Masum Billah
    How are the Shimulia ghat businesses faring after Padma bridge?
  • After so many investments going embarrassingly wrong, as was the case with Sam Bankman-Fried, perhaps tech investors’ preference for less experience will wane. Photo: Bloomberg
    Are you the next Steve Jobs? Good luck raising money in 2023
  • Infographic: TBS
    How to redirect inward remittances to formal channels
  • An elderly couple's lonely battle to save Dhaka's trees
    An elderly couple's lonely battle to save Dhaka's trees

Related News

  • NBFIs can no longer borrow from call money market: Cenbank
  • NBFIs must give one month's notice to borrowers for hiking interest rate
  • New guidelines on filling up top posts at state banks, NBFIs
  • Default loans in NBFIs rise over Tk1,000cr in 3 months
  • IPDC participates in National SME Fair 2022 as gold sponsor

Features

Andy Mukherjee. Sketch: TBS

What makes India's billionaires' support special for Adani

27m | Panorama
Photo: Rejaul Hafiz Rahi

A jackal farewell

1h | Earth
The trio spearheading the revival of book cover designs

The trio spearheading the revival of book cover designs

2h | Panorama
Six Jeep Wranglers and a special XJ Jeep Cherokee set out into the depths of Lalakhal, Sylhet for an experience of a lifetime. Photo: Ahbaar Mohammad

Jeep Life Bangladesh: A club for Jeep owners to harness the power of their vehicles

1d | Wheels

More Videos from TBS

A proper price formula can help investors to plan big

A proper price formula can help investors to plan big

16h | TBS Round Table
Rumors about Sarika that everyone thinks are true

Rumors about Sarika that everyone thinks are true

15h | TBS Entertainment
Mugging rife in Tejgaon, murder in Wari

Mugging rife in Tejgaon, murder in Wari

17h | TBS Current Affairs
What secrets are hidden behind Adani's wealth?

What secrets are hidden behind Adani's wealth?

16h | TBS Stories

Most Read

1
Bapex calls candidates for job test 9 years after advert!
Bangladesh

Bapex calls candidates for job test 9 years after advert!

2
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

3
Photo: Collected
Energy

8 Ctg power plants out of production

4
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

5
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

6
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]