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Meridian Finance to scale up business with new products from next year

CEO shares company plan with the FE


Jubair Hasan | November 07, 2018 00:00:00


Irteza A. Khan

Meridian Finance & Investment Limited (MFIL) has planned to scale up its deposit portfolio starting from 2019 through introducing more need-based products.

The company, which came into operation in December, 2015, will start setting up more sales offices and touch points, and will offer lucrative financial offers to create more entrepreneurs in the country.

Managing Director (MD) and Chief Executive Officer (CEO) of the non-bank financial institution (NBFI) Irteza A. Khan shared the company's plan with the FE in an exclusive interview recently.

To cope with the challenges ahead, he said, the MFIL already developed a team of dynamic workforce with installation of updated technology to ensure quick service delivery.

"The journey of a new NBFI is not easy at all. But, by the grace of almighty, we've done extremely well. We've no NPL (non-performing loan) thanks to regular monitoring of our valued borrowers," he said.

The total portfolio of the MFIL reached Tk 4.50 billion in 2017. Of the amount, the total deposit stood at Tk 3.50 billion, including Tk 2.0 billion of Fixed Deposit Receipt (FDR) by various financial institutions, while institutional and individual deposits holding the remaining part.

In April last, the finance ministry issued a notification allowing private banks and NBFIs to get up to 50 per cent of the government, semi-government and autonomous bodies' fund.

"MFIL is one of the 14 NBFIs where the public fund can be deposited. The government analysed various criteria like NPL and credit rating to oversee strength and weakness of the institutions before taking the decision," he said.

He said the MFIL was recognised as A-rated credit institution for the last two consecutive years.

Talking about the cost of fund, he said that it has become a challenge for the NBFIs to manage funds because of the higher expense of finance. "That's why we took the strategy to expand our deposit portfolio to lessen dependency on costly bank borrowing," he said.

Highlighting the importance of developing bond market, he said the NBFIs in other countries borrow money from the bond market, but the ones here have to depend on banks and retail deposits for not having such a market.

Terming retail deposit far better than the bank borrowing, he said the rate of interest in bank finance often changes whereas retail deposit rate does not switch over immediately.

"Whenever we fix a term loan that is fixed until it is matured. That's why we're planning to expand deposit portfolio in a large scale from next year," he said.

Mr. Khan said the MFIL opened touch points in Dhaka, Chattogram, Gazipur and Bogura in less than three years. "We decided to open two more sales offices in 2019 in line with our plan to scale up deposit portfolio in a massive way," he said.

At the same time, the company will accelerate its branding-related activities, which the NBFI believes would help increase deposits.

"We'll be coming up with a basket of many diversified products in the coming days," he said, adding that it will focus more on products like accommodation, mortgage financing, apartment financing, group or joint construction, SME, car loan and commercial vehicle in particular.

When asked how long it would take to disburse fund to the lenders, he said that the MFIL replies in only three days of the submission of required documents whether it would finance.

"Within seven working days, the borrower will get the fund if everything is ok," he added.

Of the total portfolio, 50.48 per cent goes to industries followed by trade and commerce (13.77 per cent), agriculture (12.67 per cent), housing (12.25 per cent) and transport and aviation (5.21 per cent).

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