Having successful in the country's commodity market, the Khan Bahadur Group now eyes expanding its business especially in the areas of agro products, fast-food chain, and telecommunication.
Established in 1935 by late Khan Bahadur Badi Ahmed Chowdhury, the group has investments in the sectors including rice mill, shrimp cultivation, salt production, agro machinery, cold storage, jute, construction, fuel transportation and boutique hotel.
Mayeen Chowdhury, managing director of the business group, who assumed the position in 2010 to take their family business to the next level, discussed future prospect and current operations of the group in an exclusive interview with the FE.
Talking about the current business environment in the country, he said that the future of the country is "very bright" in a sense that the government has taken many sophisticated development projects on which the international investors and donor agencies are interested.
Most of these infrastructural development projects will obviously play vital role in the growth of the economy.
Mr Chowdhury, who has longtime experience previously working in Bank of America and global investment giant J.P. Morgan where he was Operation's Team Lead in the USA, said, "As per my understanding of a financial system as an economist, too many banks and non-bank financial institutions (NBFIs) operating in the country is the first and foremost problem of the financial sector."
Bangladesh's economy doesn't have that much strength yet to sustain such a large number of financial institutions, he said.
He also said that the idea behind it was to lower interest rates but that didn't happen as there aren't enough low risk big borrowers in the market to fulfil the demands of each of the banks.
"This is causing default rates to increase as banks have no choice but to be lenient with their lending. When you combine all these factors, you'll get a high advances to deposits (AD) ratio and severe cash crunches in the banks. If this is not happening now, then it will happen soon."
However, the government's recent planning and discussion on merger of several banks is encouraging and it will increase overall strength of the economy.
Besides, suggesting legalisation of capital outflow by the central bank, Khan Bahadur Group managing director said, "Both inflow and outflow of foreign-exchange should remain open at the same time; because, real economy can only be understood by the balance of capital inflow and outflow."
Talking about loan distribution scenario by the financial organs, Mr Chowdhury told the FE that banks should play a pro-active role in its investments instead of collateral-based lending to the businesses.
The focus on collateral-based lending can be reduced by introducing credit score or grading-based Credit Information Bureau (CIB) report.
The group established Shah Makhdum Modern Rice Mills Ltd in Rajshahi district in 2011. The company distributes parboiled white rice, long-grain rice, aromatic and other Bangladeshi varieties under the brand name 'KB Rice'.
These smaller quantity packaged rice has been introduced to the larger department stores for the last several years but KB Foods is the first one to take it to the street corner shops in almost all neighbourhoods across the country.
Talking about recent ups and downs of rice price and unstable market situation, the group's managing director said that price of any product depends on supply and demand.
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