Mohammad Masuduzzaman | Bangladesh Bank (original) (raw)
Papers by Mohammad Masuduzzaman
Australian Academy of Business and Economics Review (AABER), 2019
Workers' remittances (WRs) are the cash inflows in foreign exchange coming from abroad into their... more Workers' remittances (WRs) are the cash inflows in foreign exchange coming from abroad into their home country. It is a prime root of foreign exchange earnings and these large inflows of remittances have vast effects to the economy. Migration plays a critical role in the economy in two main ways: First, by shirinking unemployment and second, by supplying remittance inflows for the country. Among South Asia, Bangladesh is a lower-middle-income country. In spite of a number of problems, the country is moving forward over time. Its overseas employment consists of professional, skilled, semiskilled , and less-skilled labor forces. In every year, near about two million young people are added to the labor force (BBS, 2013). However, the country lacks the ability to create sufficient jobs to absorb them. The country's population increased from 71 million in 1976 to 161 million in 2018 while the total working population or labor forces (age group-20-54) augmented to 91.44 million in 2018 from 31.73 million in 1976 (World Bank, 2019). Figure 1 presents the increasing trends of population and labor force of Bangladesh. This huge number of workforce needs to be absorbed in employment to make certain their involvement in the economic advancement of the country as well as to improve their standard of living. Migration of a huge number of labor force results higher remittance inflows in the country. It is notable that inflow of remittances is increasing over the years in Bangladesh which plays a significant role in the advancement of the migrant families and the country as well. Thus, remittances turn into an essential aspect for the socioeconomic progress of Bangladesh. It has a significant role to maintain a favorable balance of
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Australian Academy of Accounting and Finance Review (AAAFR), 2019
In many countries, it is widely viewed that small- and medium-sized enterprises (SMEs) are very p... more In many countries, it is widely viewed that small- and medium-sized enterprises (SMEs) are very promising sector. They not only contribute to productivity but also create employment opportunities for the mass people. In spite of their significant role in output growth and generation of employment, they often face difficulties in bank
finance for expanding their economic activities. For the sake of developing SMEs, Bangladesh Bank, the central bank, Bangladesh Bank initiated some special schemes to provide better formal financial services for them. However, on the ground of widespread belief that SMEs had been diverting loan into unproductive sectors,
Bangladesh Bank (2016) adopted a comprehensive investigation to find causes of high growth of such loans and its economic impact through a field survey of 451 enterprises financed under banks and non-banking financial institutions (NBFIs) in 2012. For further analysis with a view to finding out the relationship between production and SME financing, we use a sub sample of 310 enterprises of that survey data for the period 2009–2011 and introducing a finance variable into the neoclassical production function, we estimate three production functions — for all SMEs, Manufacturing, and Business SMEs with panel data regression model. From the estimated equations, we find that financing in SMEs contributes positively to output basically sales of SMEs. The results suggest that output is very sensitive to bank financing to the SMEs in industrial sector than those in the business
sector. For this reason, banks and NBFIs should prioritize to provide loans to the SMEs in the industrial sector which can contribute more productivity and thus economic growth.
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Thoughts on Banking and Finance, 2018
This study examines the contributions of bank loans to Small and Medium Scale Enterprises (SMEs) ... more This study examines the contributions of bank loans to Small and Medium Scale Enterprises (SMEs) in employment generation in Bangladesh. This is because the sector serves as a catalyst for employment generation, poverty reduction and economic development as well. The aim of this study therefore; is to find out the relationship between employment and SME Financing. Using panel data analysis with a sample of 310 enterprises for the period 2009-2011, the paper shows that SME loans has a positive impact on employment generation.
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Journal of Islamic Economics, Banking and Finance, 2018
SMEs in Bangladesh have been giving priority in lending in their crucial contribution to the coun... more SMEs in Bangladesh have been giving priority in lending in their crucial contribution to the country's GDP. However, Bangladesh Bank, the central bank, conducted a field survey in 2012 to find out the impact of huge expansion of loans in 2010. Results of that survey show small sized and/or manufacturing enterprises contribute the most in productivity and employment generation. However, while considering efficien-cies of SMEs with a distinction between financing from conventional or Islamic banks through Data Envelopment Analysis (DEA) with a sub sample of 283 enterprises from that survey data for the period 2009-2011 and one output variable (sales) and four input variables (capital, loans, expenditure and manpower), we find that almost the same technical efficiencies of SMEs financing under two types of banks-conventional (0.241) and Islamic (0.243). However, some slight differences of efficiencies of SMEs financed under two types of banks are observed while considering the size, sector and region where they are producing. These slight differences come from the concessional lending, access to finance and monitoring and supervision.
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Thoughts on Banking and Finance, 2017
This paper examines the significant role of investment in the economic growth process of Banglade... more This paper examines the significant role of investment in the economic growth process of Bangladesh. The study revisits empirically the impact of investment on economic growth. The study applies Ordinary Least Square (OLS) Method for using data from FY1983 to FY2017 period to investigate the responsiveness of investment to GDP growth. The key finding of the study depicts that there is a positive relationship between investment and economic growth in Bangladesh. The results enable us to estimate the desired level of investment to achieve a target for GDP growth. It also reveals that there is a gap of investment to achieve a targeted level of growth in Bangladesh and suggests to increase investment gradually to the desired level.
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Thoughts on Banking and Finance, 2016
This study examines the impact of bank credit to the private sector on economic growth in Banglad... more This study examines the impact of bank credit to the private sector on economic growth in Bangladesh from supply side perspectives. The study has applied Johansen co-integration approach and Error Correction Model using the time series data for the period of 1980-2015. Based on the sample data and methodology, we found that there is a positive long run relationship between real private sector credit and real GDP. More specifically private sector credit can alone explain 40 percent of variation of GDP in the long run in Bangladesh. But in short run, real GDP adjusts toward the equilibrium path once the system is shocked. However, in the short run, the adjustment path of real private sector credit to maintain the long run relationship is somewhat opposite towards equilibrium. This means that in the short run, changes in real private sector credit cannot contribute positively to restore the long run relationship if there is an imbalance in the system. So, private sector credit should be considered cautiously and given priority to productive sectors as unnecessary or unproductive credit to private sector unable to play
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The relationship between GDP growth and inflation has been examined empirically with mixed result... more The relationship between GDP growth and inflation has been examined empirically with mixed results. Some studies show that the relationship between GDP growth and inflation is positive while others show a negative relationship between them. This paper has examined the relationship between economic growth and inflation with a threshold estimation method. This study based on time series annual data over a sample period from1977-2015, shows a threshold level of inflation at 6.25 percent implying that inflation higher than that level appears to have affected economic growth negatively, while inflation and growth move positively for any level of inflation below the threshold. However, threshold level changes over the decades depending on trends of these two variables. The paper suggests that controlling price above the threshold level is prerequisite of sustainable growth in Bangladesh.
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Working Paper, 2013
This paper attempts to test for the integration among various segments of the financial market in... more This paper attempts to test for the integration among various segments of the financial market in Bangladesh. Both casual observations and statistical analysis presented in this paper indicate that certain components of the money market such as deposit money banks, non-bank financial institutions and government treasury securities market are highly integrated. The market for the instruments of National Saving Directorate is also integrated, albeit with some sort of divergent tendency due to existence of administered interest rate. On the other hand, the interbank call money market and the stock market are not integrated with the rest of segments of the financial system due to their high volatility in the recent past. Deposit rate of the banks is found to be the “reference rate” for the Bangladesh’s financial system. Therefore, efforts must be made to make this rate as much market based as possible since most other rates tend to move in line with the movements of the reference rate. Effectiveness of monetary policy, which generally operates through the short end of the interest rate structure, would also depend on how it impacts the reference rate.
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Working Paper, 2012
This paper explores the key reasons behind the movements in the terms of trade and the real net g... more This paper explores the key reasons behind the movements in the terms of trade and the real net gain and loss from trade in the long run. Like some selected Asian countries (Vietnam, China and South Korea) except India, the terms of trade of Bangladesh has been in falling almost continuously. Bangladesh’s trade performance has improved and gaining momentum despite
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Bank Parikrama, 2005
Call money market in Bangladesh was basically developed under competitive environment of the fina... more Call money market in Bangladesh was basically developed under competitive environment of the financial market. However, the market could not develop as expected, rather it showed a wide range of seasonal fluctuations. The study reveals that in most cases, whenever excess reserve falls, the rate of interest in call money market rises and vice versa. It also shows that Non-bank Financial Institutions (NBFIs) have played a major role in the recent fluctuations. Some Private Commercial Banks (PCBs) have taken the opportunity of borrowing money at low rates on the same day, thereby making the market volatile. Other reasons for the recent fluctuations are the expansion of credit and withdrawal of deposit by the public during Eid-festival. Demand for Cash by banks and financial institutions hit the inter bank repo market. Besides, some banks' borrowing of foreign currency from inter bank money market contributed to the increase in both exchange and call money rates.
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Books by Mohammad Masuduzzaman
A Primary Survey on Banks in Promoting Women Entrepreneurship in Bangladesh, 2014
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An Enquiry into the Causes of High Increase in Loans to the Small and Medium Enterprises (SME) and Its Economic Impact, 2016
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UTILISATION OF WORKERS' REMITTANCES IN BANGLADESH , 2017
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A Survey Report on Loans for Expatriates–Its Uses and Impact, 2019
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Australian Academy of Business and Economics Review (AABER), 2019
Workers' remittances (WRs) are the cash inflows in foreign exchange coming from abroad into their... more Workers' remittances (WRs) are the cash inflows in foreign exchange coming from abroad into their home country. It is a prime root of foreign exchange earnings and these large inflows of remittances have vast effects to the economy. Migration plays a critical role in the economy in two main ways: First, by shirinking unemployment and second, by supplying remittance inflows for the country. Among South Asia, Bangladesh is a lower-middle-income country. In spite of a number of problems, the country is moving forward over time. Its overseas employment consists of professional, skilled, semiskilled , and less-skilled labor forces. In every year, near about two million young people are added to the labor force (BBS, 2013). However, the country lacks the ability to create sufficient jobs to absorb them. The country's population increased from 71 million in 1976 to 161 million in 2018 while the total working population or labor forces (age group-20-54) augmented to 91.44 million in 2018 from 31.73 million in 1976 (World Bank, 2019). Figure 1 presents the increasing trends of population and labor force of Bangladesh. This huge number of workforce needs to be absorbed in employment to make certain their involvement in the economic advancement of the country as well as to improve their standard of living. Migration of a huge number of labor force results higher remittance inflows in the country. It is notable that inflow of remittances is increasing over the years in Bangladesh which plays a significant role in the advancement of the migrant families and the country as well. Thus, remittances turn into an essential aspect for the socioeconomic progress of Bangladesh. It has a significant role to maintain a favorable balance of
Bookmarks Related papers MentionsView impact
Australian Academy of Accounting and Finance Review (AAAFR), 2019
In many countries, it is widely viewed that small- and medium-sized enterprises (SMEs) are very p... more In many countries, it is widely viewed that small- and medium-sized enterprises (SMEs) are very promising sector. They not only contribute to productivity but also create employment opportunities for the mass people. In spite of their significant role in output growth and generation of employment, they often face difficulties in bank
finance for expanding their economic activities. For the sake of developing SMEs, Bangladesh Bank, the central bank, Bangladesh Bank initiated some special schemes to provide better formal financial services for them. However, on the ground of widespread belief that SMEs had been diverting loan into unproductive sectors,
Bangladesh Bank (2016) adopted a comprehensive investigation to find causes of high growth of such loans and its economic impact through a field survey of 451 enterprises financed under banks and non-banking financial institutions (NBFIs) in 2012. For further analysis with a view to finding out the relationship between production and SME financing, we use a sub sample of 310 enterprises of that survey data for the period 2009–2011 and introducing a finance variable into the neoclassical production function, we estimate three production functions — for all SMEs, Manufacturing, and Business SMEs with panel data regression model. From the estimated equations, we find that financing in SMEs contributes positively to output basically sales of SMEs. The results suggest that output is very sensitive to bank financing to the SMEs in industrial sector than those in the business
sector. For this reason, banks and NBFIs should prioritize to provide loans to the SMEs in the industrial sector which can contribute more productivity and thus economic growth.
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Thoughts on Banking and Finance, 2018
This study examines the contributions of bank loans to Small and Medium Scale Enterprises (SMEs) ... more This study examines the contributions of bank loans to Small and Medium Scale Enterprises (SMEs) in employment generation in Bangladesh. This is because the sector serves as a catalyst for employment generation, poverty reduction and economic development as well. The aim of this study therefore; is to find out the relationship between employment and SME Financing. Using panel data analysis with a sample of 310 enterprises for the period 2009-2011, the paper shows that SME loans has a positive impact on employment generation.
Bookmarks Related papers MentionsView impact
Journal of Islamic Economics, Banking and Finance, 2018
SMEs in Bangladesh have been giving priority in lending in their crucial contribution to the coun... more SMEs in Bangladesh have been giving priority in lending in their crucial contribution to the country's GDP. However, Bangladesh Bank, the central bank, conducted a field survey in 2012 to find out the impact of huge expansion of loans in 2010. Results of that survey show small sized and/or manufacturing enterprises contribute the most in productivity and employment generation. However, while considering efficien-cies of SMEs with a distinction between financing from conventional or Islamic banks through Data Envelopment Analysis (DEA) with a sub sample of 283 enterprises from that survey data for the period 2009-2011 and one output variable (sales) and four input variables (capital, loans, expenditure and manpower), we find that almost the same technical efficiencies of SMEs financing under two types of banks-conventional (0.241) and Islamic (0.243). However, some slight differences of efficiencies of SMEs financed under two types of banks are observed while considering the size, sector and region where they are producing. These slight differences come from the concessional lending, access to finance and monitoring and supervision.
Bookmarks Related papers MentionsView impact
Thoughts on Banking and Finance, 2017
This paper examines the significant role of investment in the economic growth process of Banglade... more This paper examines the significant role of investment in the economic growth process of Bangladesh. The study revisits empirically the impact of investment on economic growth. The study applies Ordinary Least Square (OLS) Method for using data from FY1983 to FY2017 period to investigate the responsiveness of investment to GDP growth. The key finding of the study depicts that there is a positive relationship between investment and economic growth in Bangladesh. The results enable us to estimate the desired level of investment to achieve a target for GDP growth. It also reveals that there is a gap of investment to achieve a targeted level of growth in Bangladesh and suggests to increase investment gradually to the desired level.
Bookmarks Related papers MentionsView impact
Thoughts on Banking and Finance, 2016
This study examines the impact of bank credit to the private sector on economic growth in Banglad... more This study examines the impact of bank credit to the private sector on economic growth in Bangladesh from supply side perspectives. The study has applied Johansen co-integration approach and Error Correction Model using the time series data for the period of 1980-2015. Based on the sample data and methodology, we found that there is a positive long run relationship between real private sector credit and real GDP. More specifically private sector credit can alone explain 40 percent of variation of GDP in the long run in Bangladesh. But in short run, real GDP adjusts toward the equilibrium path once the system is shocked. However, in the short run, the adjustment path of real private sector credit to maintain the long run relationship is somewhat opposite towards equilibrium. This means that in the short run, changes in real private sector credit cannot contribute positively to restore the long run relationship if there is an imbalance in the system. So, private sector credit should be considered cautiously and given priority to productive sectors as unnecessary or unproductive credit to private sector unable to play
Bookmarks Related papers MentionsView impact
The relationship between GDP growth and inflation has been examined empirically with mixed result... more The relationship between GDP growth and inflation has been examined empirically with mixed results. Some studies show that the relationship between GDP growth and inflation is positive while others show a negative relationship between them. This paper has examined the relationship between economic growth and inflation with a threshold estimation method. This study based on time series annual data over a sample period from1977-2015, shows a threshold level of inflation at 6.25 percent implying that inflation higher than that level appears to have affected economic growth negatively, while inflation and growth move positively for any level of inflation below the threshold. However, threshold level changes over the decades depending on trends of these two variables. The paper suggests that controlling price above the threshold level is prerequisite of sustainable growth in Bangladesh.
Bookmarks Related papers MentionsView impact
Working Paper, 2013
This paper attempts to test for the integration among various segments of the financial market in... more This paper attempts to test for the integration among various segments of the financial market in Bangladesh. Both casual observations and statistical analysis presented in this paper indicate that certain components of the money market such as deposit money banks, non-bank financial institutions and government treasury securities market are highly integrated. The market for the instruments of National Saving Directorate is also integrated, albeit with some sort of divergent tendency due to existence of administered interest rate. On the other hand, the interbank call money market and the stock market are not integrated with the rest of segments of the financial system due to their high volatility in the recent past. Deposit rate of the banks is found to be the “reference rate” for the Bangladesh’s financial system. Therefore, efforts must be made to make this rate as much market based as possible since most other rates tend to move in line with the movements of the reference rate. Effectiveness of monetary policy, which generally operates through the short end of the interest rate structure, would also depend on how it impacts the reference rate.
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Working Paper, 2012
This paper explores the key reasons behind the movements in the terms of trade and the real net g... more This paper explores the key reasons behind the movements in the terms of trade and the real net gain and loss from trade in the long run. Like some selected Asian countries (Vietnam, China and South Korea) except India, the terms of trade of Bangladesh has been in falling almost continuously. Bangladesh’s trade performance has improved and gaining momentum despite
Bookmarks Related papers MentionsView impact
Bank Parikrama, 2005
Call money market in Bangladesh was basically developed under competitive environment of the fina... more Call money market in Bangladesh was basically developed under competitive environment of the financial market. However, the market could not develop as expected, rather it showed a wide range of seasonal fluctuations. The study reveals that in most cases, whenever excess reserve falls, the rate of interest in call money market rises and vice versa. It also shows that Non-bank Financial Institutions (NBFIs) have played a major role in the recent fluctuations. Some Private Commercial Banks (PCBs) have taken the opportunity of borrowing money at low rates on the same day, thereby making the market volatile. Other reasons for the recent fluctuations are the expansion of credit and withdrawal of deposit by the public during Eid-festival. Demand for Cash by banks and financial institutions hit the inter bank repo market. Besides, some banks' borrowing of foreign currency from inter bank money market contributed to the increase in both exchange and call money rates.
Bookmarks Related papers MentionsView impact
A Primary Survey on Banks in Promoting Women Entrepreneurship in Bangladesh, 2014
Bookmarks Related papers MentionsView impact
An Enquiry into the Causes of High Increase in Loans to the Small and Medium Enterprises (SME) and Its Economic Impact, 2016
Bookmarks Related papers MentionsView impact
UTILISATION OF WORKERS' REMITTANCES IN BANGLADESH , 2017
Bookmarks Related papers MentionsView impact
A Survey Report on Loans for Expatriates–Its Uses and Impact, 2019
Bookmarks Related papers MentionsView impact