LOAN
MANAGEMENT
OF
Swastik
Multipurpose Co-operative Society Ltd.
Narayangarh-3,
Chitwan
By:
UMESH CHANDRA BHATTARAI
T.U. Registration No.: 7-2-241-332-2004
Symbol No.: 4870
A FIELDWORK REPORT
Submitted To:
In partial of the
requirement for the degree of Bachelor of Business Studies
Narayangarh, Chitwan
June, 2007
Faculty of Management
Ref. No. Date: ………..
RECOMMENDATION
This is to certify that the fieldwork assignment report:
Submitted by:
UMESH CHANDRA BHATTARAI
T.U. Registration No.: 7-2-241-332-2004
Symbol No.: 4805
Entitled:
LOAN
MANAGEMENT
OF
Swastik Multipurpose
Co-operative Society Ltd.
Narayangarh-3,
Chitwan
has been prepared as approved by this department in the prescribed
formal of the Faculty of Management. This fieldwork report is in the form as
required by the Faculty of Management. Tribhuvan University .
It is forwarded for examination.
Report Advisor Programme Incharge
Name: Mr. Rajkumar Poudel Name:
Mr. Bhim Narayan Adhikari
Sign: Sign:
Date: Date:
Internal Evaluation Sheet
We have conducted the Internal Evaluation Examination of the Report.
Submitted by:
UMESH CHANDRA BHATTARI
Entitled:
LOAN
MANAGEMENT
OF
Swastik Multipurpose
Co-operative Society Ltd.
Narayangarh-3,
Chitwan
And found the fieldwork report to be the original work of the student
in written according to the prescribed format. We recommended the fieldwork
report to be accepted as partial fulfillment of the requirement for Bachelor Degree
in Business Studies.
Internal
Evaluation Committee
Member (Report Advisior)
Member (Programme Incharge)
Date:
ACKNOWLEDGEMENT
A basic knowledge about the research technique is
required for the students of non-graduate level. In order to fulfill this need,
T.U. has prescribed a fieldwork assignment report for the students of BBS 3rd
year level.
First of all I would like to express my thanks to Mr.
Raj kumar Poudel, our subject teacher, for his significant help and guidance in
course of preparing this report. I also like to express my thanks to whole Swastik Multipurpose Co-operative Society
Ltd.' Family for providing this relevant data and information and also
thanks to all other teachers of this college for their Co-operation.
At last but not least, let me express heartily thanks to
my friend Mr. Umesh Babu Bishural for efficient computer setting and attractive
layout of this report.
Thank
you,
UMESH
CHANDRA BHATTARAI
BBS 3rd Year
Narayangarh, Chitwan
Table of Contents
|
|
Acknowledgement
|
|
List
of Tables
|
|
List
of Figures
|
|
Abbreviation
|
|
Chapter -I
|
Page
No.
|
1. Introduction
|
1-5
|
1.1 General Background
|
1
|
1.2 Literature Survey
|
2
|
1.3 Purpose of study
|
3
|
1.4 Problem of Study
|
4
|
1.5 Hypothesis
|
5
|
1.6
Limitation of
the Study
|
5
|
2. Research Methodology
|
6-11
|
2.1 Research Design
|
6
|
2.2 Method of Analysis
|
7
|
2.3 Tools Used
|
9
|
2.4 Fieldwork Procedure
2.5 Chapter Scheme
|
7
11
|
3. Presentation and Analysis of Data
|
12-18
|
3.1 Presentation of Data
|
12
|
3.2
Analysis of
Data
|
17
|
4. Summary, Conclusion and
Recommendation
|
19-20
|
4.1 Summary
|
19
|
4.2 Conclusion
|
19
|
4.3 Recommendation
|
20
|
|
|
|
|
Bibliography
|
|
|
Appendix
1
|
|
|
Appendix
2
|
|
|
List of Table
|
||
Table No.
|
Title
|
Page
No.
|
|
|
|
1
|
Investment of loan in
various sectors
|
13
|
2
|
Recovery of loan from
various sectors
|
14
|
3
|
Interest received in
various sectors
|
15
|
4
|
Amount due to recover in
various sectors
|
16
|
List of Figures
|
||
Figure No.
|
Title
|
Page
No.
|
|
|
|
1
|
Research Designing
Procedure
|
7
|
2
|
Bar diagram of investment
of loan in various sector
|
13
|
3
|
Bar diagram of Recovery of
loan from various sector
|
14
|
4
|
Interest received in
various sectors
|
15
|
5
|
Bar diagram of interest
received in various sectors
|
16
|
6
|
Pie chart Amount due to in
various sectors
|
17
|
Abbreviation
|
|
|
|
|
|
SMCSL
|
Swastik Multipurpose
Co-operative Society Ltd.
|
Rs.
|
Rupees
|
Ltd.
|
Limited
|
T.U.
|
|
%
|
Percentage
|
B.B.S
|
Bachelor of Business Study
|
B.S
|
Bikram Sambat
|
|
Chapter – I
Introduction
1.1
General Background
Swastik Multipurpose Co-operative Society Ltd. was
established in 2058-04-25 BS. It is located in Narayangarh-3, Chitwan. Its main
objective is to collect the money in small amount from the people and utilize
that money for different purposes like household, industries, education,
agriculture etc.
Main method of deposit collection is daily saving,
monthly saving, child saving and periodic savings. The collected money from that
different method is provided as loan for different individual and non
individual purpose among those members.
Swastik Multipurpose Co-operative Society Ltd. is
legally established and registered to perform the functions of cooperative
organization. There were initially 47 members during its established. New
gradually the no. of members has increased to 483 with 192 men. This
cooperative is continuously collecting money and providing loan to its members.
It is operating under the rules and regulations of the organization.
In the contest of developing counting like Nepal these is
great importance of co-operative society. It helps the weaker section of
community for their social and economic enlistment. It collects the little
money saver and provide the users who gives the return of that saving. From
that process investors and users both got benefits at last directly or
indirectly government/nations got advantages. A co-operative society is mainly
focused for the poor and weaker section of community.
1.2
Literature Survey
As we know that the commercial banks is an important
business which plays great role in this business world. The background
highlights the Nepalese Banks in the various ways above literature survey, Highlights
the review of various article books legal documents and research works.
According to Nepal Company Act 2031, "A
Commercial banks refers to such bank which deals in money exchange, accepting
deposits, advancing loan and commercial transaction except specific banking
related to co-ordination agriculture industry and other objectives."
According to U.S. law," Any institution
offering deposit subject of withdraw on demand and making loans of commercial
or business nature in bank."
1.3
Purpose of the study
The purpose of this field work report
is to introduce Swastik Multipurpose Co-operative Society Ltd., Narayangarh which
help to promote business, agriculture and industrial especially in Chitwan's
area periphery of Bharatpur, Gaidakoat. Certain word is done with special
motive, without any target. It cannot active its destination. Preparation of
this fieldwork report has also same objectives. Purpose of this fieldwork
report is to have experience of actual work in real job of own cementation
area for the students of BBS 3rd year. But it has also some specific
purpose with are as follows.
1.
To
evaluate the loan lend and recovery amount in different fiscal year.
2.
To
study about the investment and recovery system of Nepal Bank Limited, in different
sector of loan.
3.
In
this competitors days, how the bank has investing and recovering last years and
these year.
4.
To
know about rules of bank, interests rates and needs of documents while
investing.
5.
To
know about the mobilization of the collected fund from the individuals.
6.
To
know about the loan invested and collected by the firm.
7.
To
know about the difficulties faced by the firm and individual in the process of
loan mobilization.
1.4
Problems of
study
Problems
of study are as flows:-
1.
Lending
procedure of this bank is not satisfactory compare to other commercial banks.
2.
Loan
distribution of staffs among the department is not satisfactory.
3.
Co-ordination
of staffs among the department is not satisfactory.
4.
Interest
rate for loan and advance are low compare to other commercial bank which is
difficult to earn more profits.
1.5
Hypothesis
It is assumed
that the loan mobilization of the company is in better condition. Better loan
mobilization means that the amount collected in the co-operation are mostly
utilized as loan. We can also assume that the risk is diversified it means loan
is allocable in different and suitable sectors. Loan if provide in only one
sector may result loss to the company but if it is diversified, if loss occurs
in one sector, it can be recovered from the profit of other sectors, in the
same way the recovery of loan and interest is also assumed to be utilized in
the productive sector which provides timely and better return.
1.6
Limitation of
study
Each and every
study is followed by some limitation. This study too has some limitation which
is as follows:
1.
Time
constraint is one of the Major factors of the field study. It took more than
two weeks for the fieldwork to accomplish.
2.
The
main sources of the study are the answer given by the staffs of the organization.
The accuracy of the data collected depends upon the sources.
3.
Only
five years of data are analysis.
4.
Being
a student resources constraint is another factor that has limited the scope of
the study.
Chapter
– II
2.
Research Methodology
Methodology is
studying ways. This is important part in report writing. Researcher should be adopting
good methodology in research. Actuality methods used for the project by
research are discussed as below.
2.1
Research Design
Research
design refers to the framework of the planning of the research assignment the
research main concentrate is to give the clear and pure data. We can show the
research design procedure through the following figure:
Figure No. 1
Research Design Procedures
2.2 Method of Data Collection
It can be adopted different method to
collect the data, while studying something we have to depend on nature and
objective of relative's subject. To identify the planning of the project tow
type of data collection .they are as follow:-
A) Primary data collection
B) Secondary data collection
A. Primary data collection:-
The
originally collected data is known as primary data. in this method while
preparing report we meet with related person and get the data by interacting
with them , for the collection the primary data some available several
procedure are:
►Interview
►Visiting
with relative person
►Question
►Investigation
►Observation
►Phone
& e-mail
►Firm’s daily
book
B. Secondary data collection:-
There are many methods to collect
secondary data. It was collected from annual reports and organization’s
provided other publications and necessary data .it can be colleted indirectly.
2.3
Tool used in the process of preparing
report
The total
used in the process of preparing report is:
II. Tabulation method
III. Observation
IV. Schedules
V. Percentage method
VI. Graphical Presentation
-
Pie chart
-
Bar Diagram
-
Figure
2.4 Fieldwork Procedure
Fieldwork
procedures which are done during the data collection are as follows:
1.
Orientation
class was taken to get knowledge about the fieldwork with the help of lecture.
2.
Than
we have to select our topic in which we are going to write our fieldwork
reports.
3.
After
choosing subjects, we have to write application which must be registered in
collage.
4.
Collage
has provided us permission letter on behalf of student to collect the data form
the bank.
5.
Preparation
of question for fieldwork data collects.
6.
To
make appointment with manager of bank.
7.
Manager
has given information to the staff of concern department.
8.
Data
were collected accordingly formatted question.
9.
At
last, data were presented and analyzed.
In this way,
fieldwork report has been prepared.
2.5 Chapter
Scheme
The Chapter planning is found different ways which are
given below:
Chapter I –
Introduction
Chapter I –
Research Methodology
Chapter I –
Presentation and Analysis of Data
Chapter I –
Summary and Conclusion
Chapter – III
3. Presentation
and Analysis of Data
3.1 Presentation
of Data
It is needless to say that diagrams are more
attractive, fascinating and impressive then the numerical data, since they are
attractive they leave much lasting impression on mind. So here the data of Swastik
Multipurpose Co-operative Society Ltd. of previous 3 year is presented in
tabular form and pie and bar chart.
A) Investment
of Loan
The fund collected from the individuals is invested in
different sectors. Investment in the productive sector helps to generate
employment opportunity as well as to earn a good return in the same way this
collection also helps to solve the minor economic problems of the daily life by
investing in nonproductive sectors.
Table No. 1
Investment of loan in various sectors
NRs. '000'
S.N.
|
Fiscal year sector
|
060/061
|
061/062
|
062/063
|
1.
|
Agriculture
|
430
|
510
|
580
|
2.
|
Household
|
425
|
500
|
530
|
3.
|
Housing
|
305
|
560
|
730
|
4.
|
Business
|
360
|
515
|
830
|
5.
|
Education
|
130
|
330
|
310
|
6.
|
Emergency
|
80
|
120
|
130
|
Total
|
1730
|
2535
|
3110
|
(Sources: Annual audit report
of SMCSL)
Figure No. 2
Bar diagram of investment of loan in
various sector
B) Recovery of
Loan
The loan invested is to be recovered within a specific
time.
Table No. 2
Recovery of loan from various sectors
(Rs. In '000')
S.N.
|
Fiscal year sector
|
060/061
|
061/062
|
062/063
|
1.
|
Agriculture
|
400
|
445
|
490
|
2.
|
Household
|
205
|
315
|
370
|
3.
|
Housing
|
145
|
310
|
473
|
4.
|
Business
|
310
|
470
|
635
|
5.
|
Education
|
105
|
170
|
185
|
6.
|
Emergency
|
20
|
50
|
65
|
Total
|
1185
|
1760
|
2218
|
(Sources: Annual audit report
of SMCSL)
Figure No. 3
Bar diagram of Recovery of loan from
various sector
C) Interest
received by the co-operative Ltd.
The collected deposit is invested in various sectors.
For such investment certain percentage of interest in charged. Interest rate
may be different for different purposes.
Table No. 4
Interest received in various sectors
(Rs. In '000')
S.N.
|
Fiscal year sector
|
060/061
|
061/062
|
062/063
|
1.
|
Agriculture
|
93
|
157
|
203
|
2.
|
Household
|
75
|
83
|
117
|
3.
|
Housing
|
54
|
87
|
133
|
4.
|
Business
|
81
|
141
|
231
|
5.
|
Education
|
17
|
31
|
66
|
6.
|
Emergency
|
16
|
19
|
38
|
Total
|
336
|
518
|
788
|
(Sources: Annual audit report
of SMCSL)
Figure No. 4
Bar diagram of interest received in
various sectors
D) Amount
due to receive
All of the amount invested can not be
received on a certain date due to many problems.
Table No. 5
Amount due
to recover in various sectors
S.N.
|
Fiscal year
sector
|
Rs. In
'000'
|
%
|
1.
|
Agriculture
|
185
|
8.36
|
2.
|
Household
|
565
|
25.54
|
3.
|
Housing
|
667
|
30.15
|
4.
|
Business
|
290
|
13.12
|
5.
|
Education
|
310
|
14.01
|
6.
|
Emergency
|
195
|
8.82
|
Total
|
2212
|
100
|
(Sources: Annual audit report
of SMCSL)
Figure No. 5
Pie Chart of amount due to recover
3.2 Analysis of Data
a) Investment
of loan
The amount collected from the individual
deposition is deposition is invested in different sectors; investment is done
for various purposes such as household, agriculture, business, education etc.
In the fiscal year 060/061 investment is Rs. 1730 thousand. In the same way in
2061/062 and 062/063 investment is almost increasing in every sector. In
agriculture loan was Rs. 430 thousand in 2060/061 and it is increased to Rs.
510 thousand in 061/062 and to Rs. 580 thousand in 2062/063. In the same way
loan for household, housing and business sector is also increasing in FY
2062/063 than that of FY 2060/061 and FY 2061/062. Loan for education in
decreased in FY 2062/063 than of FY 2061/062. Demand for loan in same emergency
case is also increased here in there three fiscal years.
b) Recovery of
loan
It is clear from the data that recovery
of loan is also increasing in each year. In the fiscal year 2060/061 Rs. 1185
thousand is recovered which is 68.49% of loan invested. In the same way in
fiscal year 2061/062 Rs. 1760 thousand is received which is 69.42% and in
2062/063 Rs. 2248 thousand is recovered which is 71.31% of loan invested. Loan
of agriculture purpose is satisfactorily received of previous three years and
loan for emergency purpose can not be received satisfactorily.
c) Interest
received by Co-Operative Ltd.
Interest earning rate is increasing each
year. In FY 2060/061 Rs. 336 thousand interest was received which is 19.42% of
invested amount in the same way in FY 2061/062 and 2062/063 also Rs. 518
thousand and Rs. 788 is received which is 20.43% and 25.33% of loan invested
respectively. In average from the agriculture sector most interest is received.
d) Amount due to receive
Here amount due of aggregate of three years is given.
In three years from the agriculture sector most little amount is due to receive
whereas from the emergency is due to receive.
Chapter - IV
Summary and conclusion
4.1 Summary
Swastik Multipurpose Co-operative Society Ltd. was
established in 2058 BS. with the objective of mobilization of the small savings
of the individual. This survey is based upon the study of loan management of
the Co-operative. These data about the investment and recovery of loan,
investment, interest received in loan, are collected for the easy and effective
study of the Co-operation.
4.2 Conclusion
From the above presentation and analysis of data we
concluded that fund collected is utilized in proper way. But the invested money
is mainly invested in non-productive sector such as housing, household,
education etc. If that was utilized in other sectors which can generate income
from that or create employment opportunity in the society would be better. Even
though the invested money is satisfactorily returned back and interest is
earned.
4.3
Recommendation
¨
To increase in
the investment of loan, delay in recovery must be eliminated.
¨
For the social
and economic development of the country most of the investment should be done
in productive sector.
¨
Since the
Co-operative's earning is only interest it should be collected in time.
¨
Co-operative can
create a separate department of loan management.
¨
Co-operative
should be investing in portfolio basis.
¨
Co-operative
should give training their staff to improve working capacity
¨
New technology
should be adopting to serve the customer fast.
¨
Co-operative
should attract to customer in low interest and high interest in deposits.
Bibliography
1.
Ahuja, B.N. (1992), "Dictionary
of Management ", Academic-India Publishers, New Delhi
2.
Bhandari, Dilli Raj. (2003), "Banking and Insurance: Principle & Practice", Utsav
Books & Stationers, Kathmandu
3.
Bhattarai, Pramod (2004), "The Nepalese Financial System", Asmita Books Publishers
& Distributors, Kathmandu
4.
Dahal, Bhuvan and Sarita Dahal (2002), "A Hand Book to Banking", Asmita Books and Stationary, Kathmandu
5.
Joshi, Padam Raj (2004), "Fundamentals of Financial Management", Asmita Books
Publishers & Distributors, Kathmandu
6.
Shrestha, M.K. (1990), "Financial
Companies in Nepal ",
Investment Management Training and Research
Center , Kathmandu , Nepal
7.
Shrestha Manohar K., Dipak B. Bhandari (2004), "Financial Markets and
Institutions", Asmita Books Publishers & Distributor, Kathmandu
Appendix
Some
of the questions that will be guiding these research activities in the field
are as follow:
1.
How many member or share holders in the
organization?
2.
When was the organization established?
3.
How many people are employed?
4.
How many shareholders are investing in
this co-operative?
5.
What are the objectives of the
institution?
6.
What are the problems faces by the
organization?
7.
What is the expected civilization in
the coming future towards the society?
8.
Can you provide me income statement,
balance sheet?
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