Child Rearing Essays - Economic Ideologies, Anti-capitalism

Child Rearing Essays - Economic Ideologies, Anti-capitalism Child Rearing In the essay, Bringing Up Children, the author, Ruth Benedict, explores two methodologies of child rearing American and Japanese. In examination of each culture?s techniques, we find that they are in complete contrast of one another like their places on earth. Each system exemplifying one side of the extremes. We are left to ponder which of the two ideals are superior. Which arrangement of life will benefit the individual as well as society to a greater extent? The answer, however, lies not in the option mentioned above. Rather, the ideal life structure for anyone to be risen by is that which combines the two sides of the extremes thereby extracting the best of both worlds. The American upbringing is described as a "U" by the author. In such circumstance, youth and old age are the apexes of human constraint. The child is quickly taught through physical and psychological means that their wishes are irrelevant to what their parents deem ?ideal? for them. With the passing of time into adolescence and eventually adulthood, freedom is gradually fueled until financial independence is achieved. However, independence and free will are slowly siphoned during the first signs of mental deterioration at old age. One leaves the earth as they entered it under the care of others. In sharp contrast, the Japanese mannerism of raising children is noted by Benedict as an upside down ?U?; depicting the level of restraints one will experience throughout their life. The greatest amount of freedom occurs at the genesis and decline of the human body. In between the two tips of man?s lifeline, a psychological birdcage traps and stagnates the development of free human indulgence. Quite the reverse of what is seen here in North America but nonetheless a valid one. In any system, such as government, the wisest choice is a mixture between the two conventions of the extremes. In North America, and especially Canada, government is neither totally towards a capitalistic nor socialist, communist system. These governments have blended capitalistic with socialist, communist ideas. These nations possess private ownership, a capitalistic idea yet also have public education, a socialist, communist idea. Yet, could any of us imagine doing without either of these? The ideal human lifeline should be arranged no different from government itself. A median of the American and Japanese systems ? compromises of freedoms and restrictions throughout life. In the beginning, it is important that guidelines be set for the child when he/she is exposed to their new world. Firm disciplines are necessary to foster an understanding that they are not supreme in their new world. However, it is equally important to allow for a certain amount of freedom to maintain a loving and affectionate relationship. As one develops and matures into adulthood, independence should also be increased. That is not to say total freedom is allotted. Given in abundance, the end product is usually egotism and an inability to work and cooperate to others in the workplace. Certainly, humility must also be an ingredient in the solution. The final stage of life should see certain liberties taken away from the mentally deteriorated, yet the elderly deserve the right to ! decide their abilities and limitations. At this point in life of retirement, after decades of hard work, he/she has earned the right to enjoy life without restraints. A well balance between liberty and restriction throughout life is the key to a content, yet responsible, individual. Neither the American nor Japanese pattern of life tends to be complete. Each holds its strengths as well as weakness. In this world of stubborn and adamant behaviour, shouldn?t we all look towards a compromise?

Richard Nixons Native American Federal Policy

Richard Nixons Native American Federal Policy Modern American politics among various demographics can be traced along predictable lines when it comes to a two-party system, especially those of ethnic minorities. Although the civil rights movement enjoyed bipartisan support early on, it became split along regional lines with Southerners of both parties opposing it, resulting in the conservative Dixiecrats migrating to the Republican party. Today African-Americans, Hispanic-Americans, and Native Americans are typically associated with the liberal agenda of the Democrats. Historically, the conservative agenda of the Republican Party tended to be hostile to the needs of American Indians, especially during the mid-20th century, but ironically it was the Nixon administration that would bring much-needed change to Indian country. Crisis in the Wake of Termination Decades of federal policy toward American Indians overwhelmingly favored assimilation, even when the governments prior efforts toward forced assimilation were declared a failure as a result of the Merriam Report in 1924. Despite policies designed to reverse some of the damage by fostering greater self-government and a measure of tribal independence in the Indian Reorganization Act of 1934, the concept of improvement of the lives of Indians was still framed in terms of progress as American citizens, i.e. their ability to assimilate into the mainstream and evolve out of their existence as Indians. By 1953 a Republican-controlled Congress would adopt House Concurrent Resolution 108 which stated that at the earliest possible time [Indians should be] freed from all federal supervision and control and from all disabilities and limitations specially applicable to Indians. Thus, the problem was framed in terms of Indians political relationship to the United States, rather than a history of a buse stemming from broken treaties, perpetuating a relationship of domination. Resolution 108 signaled the new policy of termination in which tribal governments and reservations were to be dismantled once and for all by giving greater jurisdiction over Indian affairs to some states (in direct contradiction of the Constitution) and the relocation program which sent Indians away from their home reservations to large cities for jobs. During the termination years, more Indian lands were lost to federal control and private ownership and many tribes lost their federal recognition, effectively eradicating the political existence and identities of thousands of individual Indians and over 100 tribes. Activism, Uprising, and the Nixon Administration The ethnic nationalist movements among Black and Chicano communities fueled the mobilization for American Indians own activism and by 1969 the Alcatraz Island occupation was underway, grabbing the nations attention and creating a highly visible platform upon which Indians could air their centuries-long grievances. On July 8, 1970, President Nixon formally repudiated the termination policy (which was established ironically during his tenure as vice president) with a special message to Congress advocating for American Indian Self-determination. . . without the threat of eventual termination, assuring that the Indian†¦[could] assume control over his own life without being separated involuntarily from the tribal group. The next five years would see some of the most bitter struggles in Indian country, testing the Presidents commitment to Indian rights. In the latter part of 1972, the American Indian Movement (AIM) in conjunction with other American Indian rights groups convened the Trail of Broken Treaties caravan across the country to deliver a twenty point list of demands to the federal government. The caravan of several hundred Indian activists culminated in the week-long takeover of the Bureau of Indian Affairs building in Washington DC. Just a few months later in early 1973, was the 71-day armed confrontation in Wounded Knee, South Dakota between American Indian activists and the FBI in response to an epidemic of uninvestigated murders and the terrorist tactics of a federally-supported tribal government on the Pine Ridge Reservation. The heightening tensions across Indian country could no longer be ignored, nor would the public stand for more armed interventions and Indian deaths at the hands of federal officials. Thanks to the momentum of the civil rights movement Indians had become popular, or at least a force to be reckoned with and the Nixon administration seemed to grasp the wisdom of taking a pro-Indian stance. Nixons Influence on Indian Affairs During Nixons presidency, a number of great strides were made in federal Indian policy, as documented by the Nixon-era Center Library at Mountain State University. Among some of the most significant of those achievements are: The return of the sacred Blue Lake to the people of Taos Pueblo in 1970.The Menominee Restoration Act, restoring the recognition of the previously terminated tribe in 1973.In the same year, the Bureau of Indian Affairs budget was increased by 214% to a total of $1.2 billion.The establishment of the first special office on Indian Water Rights - A bill authorizing the Secretary of Agriculture to make direct and insured loans to Indian tribes through the Farmers Home Administration.The passage of the Indian Financing Act of 1974, which supported tribal commercial development.The filing of a landmark Supreme Court suit to protect Indian rights at Pyramid Lake.Pledged that all available BIA funds be arranged to fit priorities set by tribal governments themselves. In 1975 Congress passed the Indian Self-Determination and Education Assistance Act, perhaps the most significant piece of legislation for Native American rights since the Indian Reorganization Act of 1934. Although Nixon had resigned the presidency before being able to sign it, he had laid the groundwork for its passage. References Hoff, Joan. Re-evaluating Richard Nixon: His Domestic Achievements. nixonera.com/library/domestic.asp Wilkins, David E. American Indian Politics and the American Political System. New York: Rowman and Littlefield Publishers, 2007.

Current issues in human rights - War, genocide, mass human rights Essay

Current issues in human rights - War, genocide, mass human rights violations - Essay Example ted Nations (1948), this document has provided a blueprint for the development of various international laws and criminal courts against individuals who have the high genocide responsibilities. Countries such as Serbia, Guatemala, the former Soviet Union and even Rwanda have experienced genocide in the 20th century and such crimes have been punished based on the provisions of this convention. The convention has various articles which highlight the level of responsibility of each and every country’s leadership in ensuring that genocide and crimes against humanity are prevented at all costs. For example, chapter 4 states that every individual, state or non-state actor shall be held individually responsible for abetting, financing, directly and indirectly participating and being complacent in genocide activities. Such provisions have assisted in ensuring that individuals are brought to book for allowing and participating in activities that are equivalent to genocide in different parts of the world. The international tribunal for Kosovo and Rwanda were all constituted on the premise of the genocide convention to try various cases of genocide against religious and tribal groups. This document is a conclusive documentation of the articles of the convention that has defined genocide and abuse of human rights as we know it today. Though changes have been done to the convention, the United Nations (1948) is an important document that has informed the decision of other international bodies and help in reducing incidence of abuse of human rights in the presence or absence of crisis. In the study of human rights and genocide, the United Nations (1948) provides an accurate historical encounter of how a convention that has defined international behavior of those in power was developed. This document has significantly contributed to the development of various tribunals aimed at providing justice to victims of genocide in countries such as Rwanda Kosovo where rampant human

Juvenille ofenders in criminal court Essay Example | Topics and Well Written Essays - 500 words

Juvenille ofenders in criminal court - Essay Example This bias towards punishment and not rehabilitation is expressed by McCollum (as quoted in Redding 92) in support of the Federal law. The changes mean to satisfy concerns, increase juvenile justice efficiency and curb growth in juvenile offending. National transfer efforts make 2 percent of juvenile delinquency cases caused by judge’s willingness to transfer, large numbers of offenders and less treatment options in the juvenile system. J.S. Attorney General Janet Reno (as quoted in Redding 93) asserts that behind this response is unexplained delinquency characterized by sharp increment in violent index crimes. The transfer consequences for juveniles stated in Kent v. United States 1966 are longer prison sentences, loss of juvenile protective and rehabilitative possibilities, potential abuse in adult prisons and loss of rights associated with felony convictions. Other sanctions include loss of voting and firearm rights; ineligibility for military service; felony record and declaration of felony status on employment; negative influence on future criminal processing, prosecutions and sentencing; and exposure t o capital punishment. As the US Department of Justice 1999 stated (Redding 121), effects of transferring juvenile offenders have not been clear with studies showing short term actual increase in recidivism and society reintegration problems. Transfer policies must be enacted to ensure a smooth transition and justice be served in a fair manner. Purposes of transfer such as deterrence and community protection have not been achieved as formal criminal processing, conviction and sentencing seem to have little merit and many adverse consequences. Transfers don’t seem to promote community protection and decrease juvenile offender reformation (Redding 95). This means that a new approach in reference to the transfer of the juveniles must be evaluated to ensure protection of the community is enhanced by the judicial system. Penology policies to counter this

Diversity in Universities Essay Example for Free

Diversity in Universities Essay The process of getting education involves going through a number of stages. They are the pre-school, primary school, high school and finally the tertiary institutions and the university. Admission into the universities or colleges involves the process in which students who have completed high school join tertiary education at universities and colleges. An educational system differs from one country to another. Some countries have self governing bodies which centralize the administration of standardized exams. Diversity refers to the process of recognizing and appreciating the individuals’ characteristics that make them unique so as to promote the celebration of the individual and collective achievement of those persons. Universities consists of individuals who contribute significantly to the growth of culture of the community through expressing their views on how to improve on the performance of an organization Diversity in universities. As teachers teach in universities, they always need to update their knowledge in their fields of specialization because of changing trends. Diverse systems in universities enable students to know in advance the type and quality of teaching and qualification they will receive. Benefits of diversity When an organization values diversity, it means that it values the local community as well as themselves. Different values are appreciated by the diverse organization . This kind of organization recognizes the fact that people with different backgrounds skills, attitude and experience brings about fresh ideas and perceptions. Diverse organizations encourage and harness various differences that make their services relevant and approachable. They also get a wide range of views exercised so that it can listen to them and meet the changing needs of its user, staff, volunteers and partners. Intellectual Diversity A review is done about the student’s perception of students towards teachers who attempt to discuss politics in course other than political science in classrooms. Academic freedom should be allowed in college campuses for its easier to correct a situation in the classroom. On other hand arguments should be made to be one sided. For education, it is said to be implemented when students are provided with a variety of perspectives and encouraged to think for them. There are some suggestions given to ensure intellectual diversity at the same time protecting academic freedom, for instance establishing new academic programs political bias in student –funded groups. In conclusion, diversity helps us to see situations from different points of view and therefore assists one to accommodate changes when they arise. It is therefore necessary to learn about diversity so as to appreciate the different research agendas and priorities that may arise that may bring change to a community and thus lead to proper decision making processes within their organizations. Reference: Blosser, S. (2005) Universities Flunk In Intellectual Diversity http://72. 14. 205. 104/search? q=cache:N1K4WYFP6EgJ:www. campusreportonline. net/main/articles. php%3Fid%3D706+intellectual+diversity+in+universitieshl=enct=clnkcd=2gl=keclient=firefox-a Website accessed on September 6, 2008

The Amazing Life of F. Scott Fitzgerald :: essays research papers fc

F. Scott Fitzgerald lived an amazing life throughout time, overcoming obstacles in his path and persevering through trials and tribulations. As a man who has gone through over four decades of experiencing an overwhelming amount of accomplishments, as well as hardships, F. Scott Fitzgerald is therefore acknowledged as a â€Å"True Man†. In fact, his struggles through childhood, his transition to adulthood and his unstable literary career acknowledges him as a â€Å"Real Man† who is more like a hero.   Ã‚  Ã‚  Ã‚  Ã‚  To begin with, F. Scott Fitzgerald’s childhood was a common one, like other children who grew up during the late nineteenth century. His origin played a key role in how he came to live his life according to the â€Å"American Dream†. Of the Irish ethnicity, F. Scott Fitzgerald was born September 24, 1896 in St. Paul, Minnesota. His family life was one to be considered average for the late 1800s. His mother, Mary Mc Quilla, and father, Edward Fitzgerald were middle class Americans who worked hard to maintain a stable family. Mary Mc Quillan, was the daughter of an Irish immigrant who became wealthy as a wholesale grocer in St. Paul. Both were Catholics. Edward Fitzgerald failed as a manufacturer of wicker furniture in St. Paul, and he became a salesman for Procter & Gamble in upstate New York. After he was dismissed in 1908, when his son was twelve, the family returned to St. Paul and lived comfortably on Mary Fitzgerald’s inheritance. Both wer e of the Catholic decent. F. Scott Fitzgerald, named after his distant cousin, Francis Scott Key, the composer of the Star Spangled Banner, was the only child born to his fortunate parents. Due to several issues, his family moved regularly.   Ã‚  Ã‚  Ã‚  Ã‚  Also, F. Scott Fitzgerald transition to adulthood came about with a dramatic twist as he experienced ups and downs as any normal being would. Starting as a young lad and entering the field of becoming a â€Å"man†, Francis began to start a new life. He entered Princeton University in 1913 but allowed other prerogatives to take over his priorities. For example, Fitzgerald neglected his studies for his literary apprenticeship. He wrote the scripts and lyrics for the Princeton Triangle Club musicals and was a contributor to the Princeton Tiger humor magazine and the Nassau Literary Magazine. His college friends included Edmund Wilson and John Peale Bishop. On academic probation and unlikely to graduate, Fitzgerald joined the army in 1917 and was commissioned a second lieutenant in the infantry.

Understanding The Difference of Living Standards & Standard of Living

The American life style has been very much shaped by their economy. Nearly all aspects of American, and for that matter the rest of the world†s, life have been changed by their economy†s in some way, shape or form. Everything from the beds we sleep on, to the food we eat, to the jobs we aquire to make ends meet is continuously shaped by the different economies each respective country has. So what is quality of life anyway? There are probably a thousand different answers to that question, but they all point in the same direction. Quality of life means how happy you are with the lifestyle you have. Are you unhappy because you don†t have the belongings you want, or are you perfectly happy being without them, and believe in just enjoying life for what it is. Quality of life is a measure of your social, economic and mental well being. Standard of living is something totally different from quality of life. Although they sound the same and the meanings of the separate words are similar, each phrase has it†s own meaning. The standard of your living may affect your standard of life though. Standard of living means the material possessions you have. It is the degree you are able to satisfy your material wants and needs. First, to understand how the fact that the United States is a market economy affects the quality of life there, it helps for you to know some history on the subject. When the United States first started there was practically no secondary industry, this was because there hadn†t been a need for it before then. All the States did was â€Å"harvest† the raw goods from the land and sell them back to the mother country. There wasn†t any need to have any secondary industry. This all changed when they became a separate country. Later on when the British industrial revolution was about at it†s midriff the American revolution kicked in. this changed the secondary industry from a cottage based industry to a factory based industry with the introduction of machines that could do the work of several men. The farmers started to move out of the country and in to the big cities, where all the work was. Eli Whitney can be credited with the mass production of interchangeable pa rts. Unfortunately, this system created a feeling of alienation. The workers in the the factorys were in a totally different social class than the managers. This gap along with the fact that they didn†t feel like they were part of the coroporation, a corporation acts as a single fictcios person, the workers didn†t feel like they were part of this person. The quality of life of the workers at these factories went down. They felt alienated at work, then they went home to poor housing conditions, malnutrition and virtually no social mobility. Although they weren†t nearly as bad as in Britain. The producers were happy though; they were making lots of money and more and better products than ever before. This leads to the next issue of the relations between the labor force and management. This affects how people get the products, and how some people work, thus affecting the quality of life of many American citizens. Labor and management often have disagreements because the two groups have different views on how things should work. Management wants to keep production costs at a minimum, and therefore giving workers a low wage, while labor workers want high wages and lots of benefits for themselves. When the two groups have a disagreement and go into talks they try to find the answer to one simple question, â€Å"what should be the terms and conditions of employment?† and depending on their respective answers, they agree or disagree. These decisions determine the relationship of these two groups. There are many risks in business, especially if you are the proprietor behind a proprietorship. This kind of business means you stand to lose or gain the most. If this fact is causing too much stress, your quality of life may â€Å"go through the floor.† But if you are the kind of person who values money very highly, your quality of life may go up when you have the knowledge that you may be able to make that much money. There are always ways to get around the risks of business; there are exemptions to every rule. There is always to lose too though. Since the great depression, government has had much more to do with the economy than it used to. The government has much more to do with the American citizen†s life since the great depression. This bothers some people, but others like the security of being under the government†s protective wing. The government has decided to exert more controll because they want to limit the fluctuations of the business cycle. The government now makes laws and regulations to restrain the country. There are also many more social programs now, which some people couldn†t live without. These were developed because people were losing money and jobs over things which they didn†t have control over, like market fluctuations. The consumer has a very important role in the economy, and so in there own standard of living, and even in there own quality of life. Some people are only happy when they have the material possessions, while others have no need of material things to make them happy. The people who need the possessions put a high regard to what the role of an American consumer is. Things like complaining when something is unsatisfactory, and becoming informed about which products to buy. Every country has an economic system, and economic systems affect lifestyles, quality of lives, and standards of living. An economy can affect life much the way a climate can. In fact, an economy is actually a kind of climate. An economy can change, fluctuate and cause harm much the same way a weather climate can. The united states has used all levels of government and private enterprise to ensure an adequate quality of life for all of it†s citizens. The market economy is allowed to function by the government as long as it supports the common good, or quality of life.

Term Paper on Idlc

Term paper on Functions oF credit risk management in non Banking Financial institutions (nBFi) in Bangladesh A study on IDLC Finance Limited Submitted to: Submitted By: Date of Submission: Letter of Transmittal_______________________ 23rd December 2013 Sh University Subject: Submission of term paper of BBA Programme Dear Madam, It is my great pleasure to submit the term paper on â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd † which is a part of BBA Programme to you for your consideration.I made sincere efforts to study related materials, documents, observe operations performed in IDLC Finance Limited and examine relevant records for preparation of the report. Within the time limit, I have tried my best to compile the pertinent information as comprehensively as possible and if you need any further information, I will be glad to assist you. Your most obident pupil, Acknowledgement _______________ _____________At first I would like to thank my honorable internship supervisor from BRAC Business School (BBS), BRAC University, SharminShabnam Rahman for providing me such an opportunity to prepare an Internship Report on â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd â€Å". Without her helpful guidance, the completion of this project was unthinkable. I would like to place my gratitude to the HR of IDLC Finance Limited to enable me to complete my internship in their esteemed organization. Very special thanks goes to Mr.M. Jamal Uddin, Deputy General Manager & Head of Corporate and Structured Finance Division, IDLC Finance Limited & Mr. AlamIftekhar Chowdhury, Manager Corporate Division, IDLC Finance Limited, for helping me in all phase of the internship process. Their overwhelming support for my internship gave me the inspiration to do a better report. During my preparation of the project work I h ave come to very supportive touch of different individuals (respondents from IDLC Finance Limited) & friends who lend their ideas, time & caring guidance to amplify the report’s contents.I want to convey my heartiest gratitude to them for their valuable responses. Executive Summary_______________________ The non-bank financial institutions (NBFIs) constitute a rapidly growing segment of the financial system in Bangladesh. The NBFIs have been contributing toward increasing both the quality and quantity of financial services and thus mitigating the lapses of existing financial intermediation to meet the growing needs of different types of investment in the country. Today all NBFIs are playing a vital role for the growth of the nation’s economy with the best of their ability.During the world recession period NBFIs in Bangladesh act in a stringent manner so that their financial systems as well as the economy do not collapse. 29 NBFIs are now contributing to the growth of n ational economy. IDLC Finance Ltd as a leading and pioneer NBFI started their operation in 1986 and still they are dominating the NBFI sector as well as contributing to the prosper of economic development. Their success in this industry has inspired others to invest their capital in a profitable way.As major business of all NBFIs are providing lease facilities to the business along with various types of loan to individual and organizations therefore risk is associated with each and every product they are offering. To minimize this risk every institution has its own risk management policies. A number of actions are taken so that risk associated to their investment can be minimized. This report is emphasizes credit risk management in NBFIs in Bangladesh. In this regard IDLC Finance Limited has been taken as the sample organization, its, services, rules and regulation, corporate governance is also taken into consideration.Table of Contents_____________________________ Letter of Transmi ttal Acknowledgement Executive Summary 1. 0 Introduction 1. 1 Introduction | | | | | 01 | 1. 2 Origin of the Report | | | | | 02 | 1. 3 Objectives of the Report | | | | | 02 | 1. 4 Methodology | | | | | 03 | 1. 5 Limitations | | | | | 04 | 1. 6 Structure of the Report 2. 0 The Company | | | | | 04 2. 1 IDLC Finance limited | | | | | 06 | 2. 2 Shareholding Structure | | | | | 07-08 | 2. 3 Company chronicle | | | | | 09-10 | 2. 4 Guidance principle | | | | | 11-12 | 2. 5 Organogram | | | | | 13-14 | 2. 6 Products & Service | | | | | 14-19 | 2. 7 Divisions & Department | | | | | 20 | 2. 8 SWOT analysis | | | | | 21-23 | 2. 9 Performance of IDLC Finance Ltd | | | | | 24-25 | 2. 9. 1 CAMEL Rating 3. 0 Credit Risk Management | | | | | 25 | 3. 1 What is Risk? | | | | 27 | 3. Credit Risk | | | | 27-28 | 3. 3 Credit Risk Management Process | | | | 29-38 | 3. 3. 1 Credit Processing/Appraisal | | | | 29-31 | 3. 3. 2 Credit Approval /Sanction | | | | 32 | 3. 3. 3 Credit Documentation | | | | 3 2 | 3. 3. 4 Credit Administration | | | | 33 | 3. 3. 5 Disbursement | | 34 | 3. 3. 6 Monitoring & Control of Individual Credit | | 34-35 | 3. 3. 7 Maintaining the overall Credit Portfolio | | 35 | 3. 3. 8 Classification of Credit | | 36-37 | 3. 3. 9 Managing Problem Credits/Recovery | | 38 | 4. 0 Findings and Analysis— Credit Risk Management by IDLC Finance Ltd. 4. Procedural Work Flow of Lease Marketing 41-44 4. 2 Factors Scrutinized during Appraisal Procedure 45-46 4. 3 Weight assigned to each Risk Factor 47-48 4. 4 Measures Taken for restoration of Default Client 49 4. 5 Functions of Special Asset Management (SAM) 49- 4. 5. 1 Recovery Action Plan by SAM | 50-52 | 4. 5. 1. 1 Regular Accounts | | | 50-51 | 4. 5. 1. 2 Special Accounts | | | 51-52 | 4. 6 Impact of Overdue on Profit Performance of NBFI | | | 52 | 4. 6. 1 Provisioning Policy of Bangladesh Bank | | | 53 | 4. 6. 2 Provisioning Policy of IDLC Finance Ltd. | | 54 | 4. 7 Trend in Provisioning Volume | | | 54 | 4. 8 D efault Client Characteristics Analysis | | | | 55- | 4. 8. 1 Industry Analysis | | | | 57-59 | 4. 8. 2 Cost of projects to sales volume | | | | 60 | 4. 8. 3 Asset size of the Borrower | | | | 61 | 4. 8. 4 Debt/Equity ratio | | | | 62 | 4. 8. 5 Interest rate charge | | | | 63 | 4. 8. 6 Sponsors Business Experience | | | | 64 | 4. 8. 7 Security Ratio | | | | 65 | 4. 8. 8 Relationship with the Client | | | | 66 | 4. 8. 9 Sponsor’s Past Performance 5. 0 Recommendation & Conclusion | | | | 66-68 | 5. 1 Recommendation | | | | 70 | 5. Conclusion | | | | 71 | 1. 1INTRODUCTION The development of financial market has been receiving heightened attention from the policy-makers in recent years. One explanation lies in the fundamental shift of development strategy reflected in the nearly universal embrace of the private sector as an engine of economic growth. The governments in both developed and developing countries, the international financial institutions which exert tremendous influenc e on the policy-making apparatus of developing countries and, to a great extent, the intelligentsia have all joined together as ardent advocates of private entrepreneurship.IDLC Finance Ltd, a leading financial institution of the country achieved significant growth in all areas of business up to 3rd quarter of the year 2009. IDLC began its operation in 1985 as the first leasing company in Bangladesh. In 1995, IDLC was licensed as a Financial Institution by the country's central bank and during the last two decades, the company has grown in tandem with the country's growing economy. The company's wide array of products and services range from retail products, such as home and ar loans, corporate and SME products including lease and term loans, structured finance services ranging from syndications to capital restructuring and capital market services. The company also strengthened its presence in the country's growing stock market with launching a subsidiary-IDLC Securities Limited-whi ch is offering full-fledged brokerage service for retail and institutional clients. . 1. 3 OBJECTIVES OF THE REPORT The main objective of the study is to get a definite idea about how CRM plays a vital role in managing the risk associated with each and every product and services of IDLC Finance Limited.Furthermore, the orientation is very useful to detect whether the theoretical knowledge matches with real life scenario or not. Though the title â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd† very lengthy area, the specific objectives are as follows: 1. To know the necessity of Credit Risk Management. 2. To learn about the whole CRM procedure. 3. To know the decision making process of CRM. 4. To know the functions of Special Asset Management part of CRM 5.To know about the probable modification can be done in the whole CRM process 6. 1. 4 METHODOLOGY OF THE STU Analysis has been made on the basi s of the objectives mentioned before in the context of â€Å"Functions of Credit Risk management in Non Banking Financial Institutions (NBFI) in Bangladesh, A study on IDLC Finance Ltd† The paper will be written on the basis of information collected from primary and secondary sources. (i) Primary Data; Discussion with the respective organization's officials. (ii) For the completion of the present study, secondary data has been collected.The main sources of secondary data are: * Annual Report of IDLC Finance Limited. ? Website of IDLC Finance Limited. * Data from published reports of SEC, DSE * Different Books, Journals, Periodicals, News Papers etc. To make a report various aspects and experiences are needed. But I have faced some barriers for making a complete and perfect report. These barriers or limitations, which hinder my work, are as follows: * Difficulty in accessing data of its internal operations. * Non-Availability of some preceding and latest data. * Some informati on was withheld to retain the confidentiality of the organization.I was placed for only around 3 months of time ; working like a regular employee hindered the opportunity to put the effort for the study. The time span was not sufficient enough to learn all the activities of the organization properly. Therefore, it was very difficult to carry out the whole analysis. 1. 6 STRUCTURE OF THE REPORT The report has two main parts: Part One: This is basically introductory part, the objective and scope of the study, limitations, and research methodology has been highlighted. Brief Introduction of IDLC Finance Limited, its product and service, organizational structure, performance, etc are presented.Part Two: Products of NBFIs for which Credit Risk Management has become a key operational tool, how it performs its overall risk analysis and on the basis of the analysis identification of the ways of reducing the risk, thus maintains the core interest of the business. This part also contains the conclusion, reference ; appendix of the report. 2. 0 The Company 2. 1 ILDC FINANCE LIMITED IDLC Finance Ltd commenced its journey, in 1985, as the first leasing company of the country with multinational collaboration and the lead sponsorship of the International Finance Corporation (IFC) of The World Bank Group.Technical assistance was provided by Korean Development Leasing Corporation (KDLC), the largest leasing company of the Republic of South Korea. The unique institutional shareholding structure comprising mostly of financial institutions helps the company to constantly develop through sharing of experience and professional approach at the highest policy making level. IDLC offers a diverse array of financial services and solutions to institutional and individual clients to meet their diverse and unique requirements.The product offerings include Lease Finance, Term Finance, Real Estate Finance, Short Term Finance, Corporate Finance, Merchant Banking, Term Deposit Schemes, Debentu res and Corporate Advisory Services. The company has authorized capital of Taka 1,000,000,000 (10,000,000 shares of Taka 100 each) and paid up capital of Taka 250,000,000 (2,500,000 ordinary shares of Taka 100 each). IDLC has also established two wholly owned subsidiaries, IDLC Securities Limited and I, Cons Limited to provide customers with security brokerage solutions and IT solutions, respectively. 2. SHAREHOLDING STRUCTURE IDLC was incorporated in the year 1985 as a joint venture public limited company among five foreign and three local financial institutions. Now there are no foreign investors the present Shareholding Structure of IDLC Finance Ltd is given bellow: SL. NO. | NAME OF SHAREHOLDERS | % | | Sponsors/Directors:| | 1 | The City Bank Ltd. | 29. 70 | 2 | SadharanBima Corporation | 7. 62 | 3 | IPDC of Bangladesh Ltd. | 0. 0002 | | Sub-Total | 37. 33 | | GENERAL| | 4 | Institutions : | | | Mercantile Bank Ltd. 7. 50 | | Reliance Insurance Co. Ltd. | 7. 00 | | Eskayef Bang ladesh Ltd. | 8. 00 | | BD Lamps | 1. 32 | | Transcraft Ltd. | 4. 01 | | Eastern Bank Limited | 6. 00 | | Phonix Finance | 1. 00 | | PartexBaverage| 0. 86 | | Marina Apparels | 1. 00 | | ICB | 2. 32 | | Dhaka Stock Exchange Ltd. | 0. 95 | | One Bank Ltd. | 0. 5 | | Star Particle Board | 0. 60 | | Bangladesh Finance ; Invest. | 0. 88 | | Other institutions | 6. 92 | | Sub total | 49. 21 | 5 | Individuals : | | | General Public(Individuals) | 13. 45 | | Mr. A. K. M. Shaheed Reza, Director nominated by | | | Mercantile Bank Ltd. | 0. 017 | | Sub total | 13. 47 | | Total Holdings | 100. 00 | 2. 3 COMPANY CHRONICLE May 23,1985 | Incorporation of the Company | February 22,1986 | Commencement of leasing business |October 1, 1990 | Establishment of branch in Chittagong, the main port city | March 20,1993 | Listed in Dhaka Stock Exchange | February 7, 1995 | Licensed as a Non- Banking Financial Institutions under the Financial Institutions Act, 1993 | November 25, 1996 | Listed on the Chitta gong Stock Exchange | May 27, 1997 | Commencement of Home Finance and Short Term Finance Operations | January 22, 1998 | Licensed as a Merchant Banker by the Securities and Exchange Commission | January 15, 1999 | Commencement of Corporate Finance and Merchant Banking Operation | January 29, 2004 | Opening of Gulshan Branch |November 22, 2004 | Launching of Investment Management Services â€Å"Cap Invest† | February 7, 2005 | Issuance of Securitized Zero Coupon Bonds by IDLC Securitization Trust 2005 | September 18, 2005 | Launching of Local Enterprise Investment Centre(LEIC), a centre established for the development of SMEs with the contribution of the | | Canadian International Development Agency (CIDA) of the Government of Canada | January 2, 2006 | Opening of SME focused branch at Bogra| April 6, 2006 | Opening of Branch at Uttara|May18, 2006 | Opening Merchant Banking branch in the port city if Chittagong | July 1, 2006 | Relocation of Company’s Registered and Cor porate Head Office at own premises at 57, Gulshan Avenue | September 18, 2006 | Commencement of operation of IDLC Securities Limited, a wholly owned subsidiary of IDLC | March 14, 2007 | Launching of Discretionary Portfolio Management Services â€Å"Managed Cap Invest† | August 5, 2007 | Company name changed to IDLC Finance Limited, from Industrial Development Leasing Company of Bangladesh Limited | December 3, 2007 | IDLC Securities Limited Chittagong Branch commenced operation | December 18, 2007 | IDLC Securities Limited DOHS Dhaka Branch opened. | January 6, 2009 | IDLC Finance Limited and IDLC Securities Limited open Sylhet branches | August 09, 2009 | Opening of IDLC Securities Limited, Gulshan Branch | August 26, 2009 | Opening of Gazipur SME Booth | September 09, 2009 | Opening of Imamgonj SME Booth | December 2009 | Opening of Narayangonj Branch | December 2009 | Opening of Savar Branch | 2. 4 GUIDING PRINCIPLESIDLC is a multi-product financial institution offering a n array of diverse financial services and solutions to institutional and individual clients to meet their diverse and unique requirements. Following are the guiding principles that shape the organizational practice of IDLC Customer first: IDLC has grown with its customers, who are believed to be the center of all actions. As the crux of IDLC’s corporate philosophy, customer service gets the highest priority. Innovation: IDLC has continuously introduced new financial products for meeting the needs of the entrepreneurs in a complex ; challenging business environment. The concept of innovation is in-built into the working culture.Professional Knowledge: IDLC is staffed with qualified professionals and innovative minds in the country. Years of operational experience, large industrial database and competent workforce have gives them unparalleled advantages. Professional ethics: The professional at IDLC maintain the highest degree of financial and business ethics in all transaction s with the clients. Over the last two decades, IDLC have put in bets efforts to meet the expectations of the clients and investors. One stop solution: Work at IDLC begins with the idea generation, and then goes on into the feasibility study followed by arrangement of financing to implement the project.IDLC advises the clients, finance them and even arrange financing for them via different financing modes, namely: lease financing, term loan, bridge loan, syndication, bridge loan, syndication, ordinary shares, preferred shares and debentures. Vision: Become the best performing and most innovative financial solutions provider in the country Mission: Create maximum possible value of all the stakeholders by adhering to the highest ethical standards For the Company: Relentless pursuit of customer satisfaction through delivery of top quality services For the Shareholders: Maximize shareholders’ wealth through a sustained return on the investment. For the employees: Provide job satis faction by making IDLC a center of excellence with opportunity of career development.For the society: Contribute to the well-being of the society, in general, by acting as a responsible corporate citizen. Goal: Long term maximization of Stakeholders’ value Corporate Philosophy: Discharge the functions with proper accountability for all actions and results and bind to the highest ethical standards 2. 5 ORGANOGRAM THE APEX OF THE ORGANIZATION IS THE BOARD OF DIRECTORS, WITH THE MANAGEMENT COMMITTEE AND MANAGING DIRECTOR IN THE FOLLOWING TIERS. THE BOARD CONSISTS OF THE FOLLOWING DIRECTORS: * Chairman from Reliance Insurance Ltd * Five Directors nominated by The City Bank Limited * One from SadharanBima Corporation (SBC) * One from Transcom Group One From Mercantile Bank Limited * One Independent Director from Monowar Associates ACTIVITIES OF THE BO ARD The Board appoints the Executive Committee (EC), which takes day-to-day decisions on behalf of the company. Every credit propos al has to be approved by the EC for sanction and disbursement. EC is also authorized to observe and review other major day-to-day operational functions including corporate plans, budgets and borrowing activities. The composition of the EC is as follows: a) Four Directors b) Managing Director / Chief Executive Officer and The Company Secretary shall be the Secretary of the Committee ACTIVITIES OF THE MA NAGING DIRECTORThe Managing Director (MD), appointed by Board, manages the overall organizational activities and also plays the role of the figurehead. ACTIVITIES OF THE DEPUTY MANAGING DIRECTOR The DMD establishes the company’s policies and reviews the operational performance of the company including approval of large credit proposals, major fund procurements, budget and planning and diversification decisions. Diagram: Organ gram of IDLC Finance Limited 2. 6 PRODUCTS AND SERVICES To ensure steady and long term growth as well as to sharpen its competitive edge in a changing and challenging business environment, IDLC always endeavors to diversify into other financial services which have long term prospects.In 1997, it expanded its range of services by introducing Housing Finance and Short Term Finance, which have broadened its customer base and have contributed significantly to IDLC’s growth and profitability. In early 1999, after getting license of Merchant Banking from Securities and Exchange Commission, IDLC started its operation of underwriting, issue management, corporate financing and other investment banking related services. The products and services are as follows 1. LEASING Assets are leased to clients on predetermined rental basis for a fixed term with a purchase option at the end. 2. TERM LOAN The customers are offered loan facilities for a determined term at a negotiated rate. 3. EQUITY FINANCINGIDLC invests money into equity of both publicly traded and non-traded companies for dividends and capital gain. 4. INTER CORPORATE DEPO SIT ( I CD ) This disbursement scheme is offered to clients under two variations: a) Non- Revolving ICD which consists of single disbursement of funds b) Revolving ICD where multiple disbursements and collections take place 5. WORK ORDER/ PURCHASE ORDER FINANCING The clients are financed against their work order or purchase order on a revolving basis. 6. FACTORING Under this scheme, IDLC finances receivables of supply of goods or delivery of services on credit to help the clients realize the maximum portion of their payment soon after they have made the delivery to the buyer.The payment is collected from the customers and the balanced amount is re-reimbursed to the clients. 7. SYNDICATION IDLC helps to raise fund for clients with huge financial requirement through syndication and also help them with the documentation, execution and administration of the syndicated finance. 8. SECURITIZATION IDLC sell financial instruments of organizations in local financial market backed by their asset/cash flows such as loan, lease etc. 9. BRIDGE FINANCE: This refers to short-term finance (maturity of not more than 12 months) in anticipation of immediate long term financing such as public issue, private placement, syndication, loan, lease, debenture, etc. 10. CAP INVESTIDLC maintains a non-discretionary portfolio account for clients where they have absolute power to make investment decisions. the portfolio manager provides margin loan to clients and also prepares the list of securities in which they can invest. 11. DEPOSIT SCHEMES IDLC offer different variety of deposit schemes for clients. * Cumulative Term Deposit * Annual Profit Term Deposit * Monthly Earner Deposit * Double Money Deposit 12. CAR LOAN Term loan are offered to clients for acquiring car, brand new or reconditioned, for their personal use and the ownership is transferred on loan repayment. 13. HOME LOAN IDLC offers loans to purchase apartment to individuals for their personal use 14. REAL ESTATE FINANCEIDLC finances clients to construct house, renovate and extend house, for office chamber/space for professionals etc. under two different schemes: * Developer’s Finance Scheme oCorporate Finance Scheme 15. PRIVATE PLA CEMENT IDLC places the shares/debenture with both domestic and overseas investors (institutions or individuals) on private placement basis. 16. UNDERWRITING IDLC makes a univocal and irrevocable commitment with an issuing company to subscribe to the securities of that company when the existing shareholders or the general public do not subscribe to the securities offered to them. The different types of underwriting offered are: * Initial Public offering (IPO) of common stock, preferred stock, debentures etc. Right Issue oUnderwriting of public securities-loan, lease, debenture 17. ISSUE MANAGEMENT Under this activity, IDLC plan, coordinate and control the entire issue activity of clients and direct other agencies for successful marketing of securities. 18. FINANCIAL A DVISORY S ERVICE IDLC help the existing venture or a new venture by providing various advisory services such as corporate counseling, project counseling, capital restructuring, financial engineering etc. 19. MERGERS AND ACQUISIT IO IDLC help clients to search for the right organization, evaluate the concern based on different types of analysis and select the method of m ;a to make it a profitable deal. 20. TRUSTEESHIP MANAGEME NTWe act as trustee for the debenture holders by accepting security created by the company and take action to safeguard their interest and enforce their rights. Table: Product ; Services offered by IDLC Finance Limited 2. 7 DIVISIONS AND DEPARTMENTS The organization includes divisions which mainly deal with the products and services and departments which support in the operating activities. The divisions are the * Corporate * SME * Merchant Banking * Personal Investment * Factoring * Structured Finance * Operations The departments include * Credit Risk Management (CRM) * Treasury * Human Resource * Accounts and Taxation * Administration and PR Operational Risk Management (ORM)/Internal Control Compliance(ICC) * Special Asset Management(SAM) 2. 8 SWOT ANALYSIS The SWOT analysis for IDLC can be described as follows: Strengths 1. Reputation and brand image: IDLC is well-reputed company and has developed a brand image that is recognized by the customers. IDLC is an international joint-venture company and its shareholders have long records of sustainability and reliability in their respective fields. IDLC is one of the esteemed names in financial market of Bangladesh. Since 1985, IDLC has marked its journey through introduction of various innovative products and thus meeting the needs of large corporate clients. 2 .Product portfolio: IDLC has diverse product portfolio for customers which made them second to none in Non-Banking Financial Industry. 3. Quality Customer Portfolio: IDLC has a Credit Risk Management department of Multinational standard which enables the company to maintain a quality customer portfolio. 4. Human Resources: The Company has competent management team. The over all work force of the company is considered as key resources for the organization. IDLC personnel are motivated, competent, energetic and creative. The company provides utmost support in terms of both technical and moral. 5. Operational efficiency: IDLC provides customized solution to their customers to adjust their need.The company processes the loan applications quickly and smoothly. The sanction and disbursement of the loans are hassle-free. 6. Employee Empowerment: At IDLC decision-making is free flowing and transparent. Every appraiser is given ample opportunity to exercise his/her creativity in accommodating a customer. Approvers are open for any discussion and sanction is largely based upon recommendation of the appraisers. The open and free flow of communication ensures clarification of any queries in no time–from any level of hierarch y. Reasonable suggestions are not only welcome but are highly appreciated. Effective suggestions by the employees are immediately set for action.This flexibility has helped IDLC a lot in shaping up its operations into a level of efficiency and to be an excellent performer in case of loan recovery. Weaknesses 1. High Cost of fund: IDLC as any other NBFIs have high cost of fund in comparison to banks. As NBFIs can take deposit for less than one year from any individuals as banks can do, the deposit base of IDLC is not strong enough to reduce the average cost of fund. 2. More Focus on Volume: Although IDLC has department called Credit Risk Management to monitor the asset quality of the company, still the company sometimes for the sake of profit and past relationship provide loans to customers who at the end hamper the portfolio quality of IDLC. 3.Too Much Diversification: Too much diversification of product and services offering hamper the focus on the core services of the organization . 4. Less People in Liability Marketing: IDLC still employs lesser number of workforces for the aggressive liability marketing in comparison to banks and NBFI like DBH. Opportunities 1. Continuity of Liberalization: Government has continued to liberalize the economy towards more market orientation. This encouraged both local and foreign investors to invest in potential sectors. The privatization plan of government is likely to have positive impact on industrialization. 2. Foreign Investment in Prospective Sectors: In recent days foreign investment in the various prospective sectors has increased phenomenally.This creates a good opportunity for all financial institutions to enter in the booming new sector. 3. Local banks inefficiency: One of the major reasons for thriving of leasing company in Bangladesh is local banks inefficiency of providing project loan. This phenomenon still persists. Threats 1. Threat from banks: In recent times banks are also entering into leasing business whi ch is generally considered as functions of Non-Banking Financial Institutions. 2. Regularity control of government: The legal framework of Bangladesh is relatively weak. Lack of effective foreclosure laws and manual land recording system creates possibility of forgery and disputes.This may hinder the loan recovery from the defaulters. 2. 9 PERFORMANCE OF IDLC FINANCE LIMITED 2. 9. 1 CAMEL RATING Rating type | Base | At 31. 12. 08 | Rating | 1. Capital sufficiency C | Reserve should be 25. 00 crore by the end of 30. 06. 06 | 16. 113 Crore| 1(Strong) | 2. Asset Quality A | (Classified loan/lease and other assets)/overdue amount*100 | 6089. 04/153384. 93*100=3. 97% | 2(Satisfactory) | 3. Management M | Average of C,A,E ; L ratios | (1+2+1+1)/4=1. 25 | 1(Strong) | 4. Earning Ratio E | (NPAT/TA)*100% (NPAT/TE)*100% | (4063. 72/167085. 65)*100%=2. 43% (4063. 72/16113. 12)*100%=25. 22% | 1(Strong) | 5. Liquidity Ratio L | 1. CRR ; SLR reserve 2.Interbank dependency 3. Profit | -Reserved -L ess dependent -Strong | 1(Strong) | CAMEL | Sum of 5 Ratios/5 | (1+2+1+1+1)/5=1. 20 | 1(Strong) | CAMEL rating has improved to 1 comparing to the last year 2(Satisfactory) 3. 0 Credit Risk Management 3. 1 WHAT IS RISK? In general Risk can be define as the â€Å" Probability or threat of a damage, injury, liability, loss, or other negative occurrence, caused by external or internal vulnerabilities, and which may be neutralized through pre-mediated action. † But in Finance risk is defined concerning some special factors of market and other externalities which can affect an individual or organization’s decision.In Finance risk is defined as â€Å"Probability that an actual return on an investment will be lower than the expected return. † Financial risk is divided into the following general categories: (1) Basis risk: Changes in interest rates will cause interest-bearing liabilities (deposits) to re-price at a rate higher than that of the interest-bearing assets (lo ans). (2) Capital risk: Losses from unrecovered loans will affect the financial institution's capital base and may necessitate floating of a new stock (share) issue. Therefore to reduce this risk Banks, NBFIs, and other organizations take various types of measures so that it can be reduced in a minimal affordable limit. In Banks and NBFIs the core risk is credit risk.As Banks, NBFIs performs there major operations on providing loan, lease (for NBFIs) therefore there is a chance of default at time of repayment. So to reduce this default risk so that number of default payment does not increase and to forecast this probability with appropriate tools Banks, NBFIs always work on managing their Credit Risk. Several Guideline and standards are prepared so that Credit Risk for individual banks and NBFIs can be reduced. 3. 2 CREDIT RISK Credit risk is the possibility that a borrower or counter party will fail to meet agreed obligations. Globally, more than 50% of total risk elements in banks and FIs are Credit Risk alone. Thus managing credit risk for efficient management of a FI has gradually become the most crucial task.Credit risk may take the following forms: * In direct lease/term finance: rentals/principal/and or interest amount may not be repaid * In issuance of guarantees: applicant may fail to build up fund for settling claim, if any; * In documentary credits: applicant may fail to retire import documents and many others * In factoring: the bills receivables against which payments were made, may fail to be paid * In treasury operations: the payment or series of payments due from the counter parties under the respective contracts may not be forthcoming or ceases * In securities trading businesses: funds/ securities settlement may not be effected * In cross-border exposure: the availability and free transfer of foreign currency funds may either cease or restrictions may be imposed by the sovereign Credit risk management encompasses identification, measurement, m atching mitigations, monitoring and control of the credit risk exposures to ensure hat: * The individuals who take or manage risks clearly understand it * The organization’s Risk exposure is within the limits established by Board of Risk taking Decisions are in line with the business strategy and objectives set by BOD * The expected payoffs compensate the risks taken * Risk taking decisions are explicit and clear * Sufficient capital as a buffer is available to take risk * Directors with respect to sector, group and country’s prevailing situation * Risk taking Decisions are in line with the business strategy and objectives set by BOD 3. 3 CREDIT RISK MANAGEMENT PROCESS Credit risk management process should cover the entire credit cycle starting from the origination of the credit in a financial institution’s books to the point the credit is extinguished from the books. It should provide for sound practices in: 1. Credit processing/appraisal; 2. Credit approval/sa nction; 3.Credit documentation; 4. Credit administration; 5. Disbursement; 6. Monitoring and control of individual credits; 7. Monitoring the overall credit portfolio (stress testing) 8. Credit classification; and 9. Managing problem credits/recovery 3. 3. 1 . CREDIT PORCES SING/APPRAISAL : Credit processing is the stage where all required information on credit is gathered and applications are screened. Credit application forms should be sufficiently detailed to permit gathering of all information needed for credit assessment at the outset. In this connection, NBFIs should have a checklist to ensure that all required information is, in fact, collected.NBFIs should set out pre-qualification screening criteria, which would act as a guide for their officers to determine the types of credit that are acceptable. For instance, the criteria may include rejecting applications from blacklisted customers. These criteria would help institutions avoid processing and screening applications that would be later rejected. Moreover, all credits should be for legitimate purposes and adequate processes should be established to ensure that financial institutions are not used for fraudulent activities or activities that are prohibited by law or are of such nature that if permitted would contravene the provisions of law. Institutions must not expose themselves to reputational risk associated with granting credit to customers of questionable repute and integrity.The next stage to credit screening is credit appraisal where the financial institution assesses the customer’s ability to meet his obligations. Institutions should establish well designed credit appraisal criteria to ensure that facilities are granted only to creditworthy customers who can make repayments from reasonably determinable sources of cash flow on a timely basis. Financial institutions usually require collateral or guarantees in support of a credit in order to mitigate risk. It must be recognized that collat eral and guarantees are merely instruments of risk mitigation. They are, by no means, substitutes for a customer’s ability to generate sufficient cash flows to honor his contractual repayment obligations.Collateral and guarantees cannot obviate or minimize the need for a comprehensive assessment of the customer’s ability to observe repayment schedule nor should they be allowed to compensate for insufficient information from the customer. Care should be taken that working capital financing is not based entirely on the existence of collateral or guarantees. Such financing must be supported by a proper analysis of projected levels of sales and cost of sales, prudential working capital ratio, past experience of working capital financing, and contributions to such capital by the borrower itself. Financial institutions must have a policy for valuing collateral, taking into account the requirements of the Bangladesh Bank guidelinesdealing with the matter. Such a policy shall, mong other things, provide for acceptability of various forms of collateral, their periodic valuation, process for ensuring their continuing legal enforceability and realization value. In the case of loan syndication, a participating financial institution should have a policy to ensure that it does not place undue reliance on the credit risk analysis carried out by the lead underwriter. The institution must carry out its own due diligence, including credit risk analysis, and an assessment of the terms and conditions of the syndication. The appraisal criteria will of necessity vary between corporate credit applicants and personal credit customers. Corporate credit applicants must provide audited financial statements in support of their applications.As a general rule, the appraisal criteria will focus on: * Amount and purpose of facilities and sources of repayment; * Integrity and reputation of the applicant as well as his legal capacity to assume the credit obligation; * Risk profil e of the borrower and the sensitivity of the applicable industry sector to economic fluctuations; * Performance of the borrower in any credit previously granted by the financial institution, and other institutions, in which case a credit report should be sought from them; * The borrower’s capacity to repay based on his business plan, if relevant, and projected cash flows using different scenarios; * Cumulative exposure of the borrower to different institutions; * Physical inspection of the borrower’s business premises as well as the facility that is the subject of the proposed financing; * Borrower’s business expertise; Adequacy and enforceability of collateral or guarantees, taking into account the existence of any previous charges of other institutions on the collateral; * Current and forecast operating environment of the borrower; * Background information on shareholders, directors and beneficial owners for corporate customers; and * Management capacity of co rporate customers. 3. 3. 2 . CREDIT – APPROVAL/SANCTION A financial institution must have some written guidelines on the credit approval process and the approval authorities of individuals or committees as well as the basis of those decisions. Approval authorities should be sanctioned by the board of directors. Approval authorities will cover new credit approvals, renewals of existing credits, and changes in terms and conditions of previously approved credits, particularly credit restructuring, all of which should be fully documented and recorded.Prudent credit practice requires that persons empowered with the credit approval authority should not also have the customer relationship responsibility. Approval authorities of individuals should be commensurate to their positions within management ranks as well as their expertise. Depending on the nature and size of credit, it would be prudent to require approval of two officers on a credit application, in accordance with the Board ’s policy. The approval process should be based on a system of checks and balances. Some approval authorities will be reserved for the credit committee in view of the size and complexity of the credit transaction. 3. 3. 3 CREDIT DOCUMEN TATIONDocumentation is an essential part of the credit process and is required for each phase of the credit cycle, including credit application, credit analysis, credit approval, credit monitoring, and collateral valuation, and impairment recognition, foreclosure of impaired loan and realization of security. The format of credit files must be standardized and files neatly maintained with an appropriate system of cross-indexing to facilitate review and follow-up. Documentation establishes the relationship between the financial institution and the borrower and forms the basis for any legal action in a court of law. Institutions must ensure that contractual agreements with their borrowers are vetted by their legal advisers.Credit applications mus t be documented regardless of their approval or rejection. For security reasons, financial institutions need to consider keeping the copies of critical documents (i. e. , those of legal value, facility letters, and signed loan agreements) in credit files while retaining the originals in more secure custody. Credit files should also be stored in fire-proof cabinets and should not be removed from the institution's premises. 3. 3. 4 CREDIT ADMINIS TRATION Financial institutions must ensure that their credit portfolio is properly administered, that is, loan agreements are duly prepared, renewal notices are sent systematically and credit files are regularly updated.An institution may allocate its credit administration function to a separate department or to designated individuals in credit operations, depending on the size and complexity of its credit portfolio. A financial institution’s credit administration function should, as a minimum, ensure that: * Credit files are neatly or ganized, cross-indexed, and their removal from the premises is not permitted; * The borrower has registered the required insurance policy in favour of the bank and is regularly paying the premiums; * The borrower is making timely repayments of lease rents in respect of charged leasehold properties; * Credit facilities are disbursed only after all the contractual terms and conditions have been met and all the required documents have been received; * Collateral value is regularly monitored; The borrower is making timely repayments on interest, principal and any agreed to fees and commissions; * Information provided to management is both accurate and timely; * Funds disbursed under the credit agreement are, in fact, used for the purpose for which they were granted; * â€Å"Back office† operations are properly controlled; * The established policies and procedures as well as relevant laws and regulations are complied with; and On-site inspection visits of the borrower’s bus iness are regularly conducted and assessments documented 3. 3. 5 DISBURSEMENT Once the credit is approved, the customer should be advised of the terms and conditions of the credit by way of a letter of offer. The duplicate of this letter should be duly signed and returned to the institution by the customer.The facility disbursement process should start only upon receipt of this letter and should involve, inter alia, the completion of formalities regarding documentation, the registration of collateral, insurance cover in the institution’s favor and the vetting of documents by a legal expert. Under no circumstances shall funds be released prior to compliance with pre-disbursement conditions and approval by the relevant authorities in the financial institution. 3. 3. 6 MONITORING ; CONTROL OF INDIVIDUAL CREDITS To safeguard financial institutions against potential losses, problem facilities need to be identified early. A proper credit monitoring system will provide the basis for taking prompt corrective actions when warning signs point to deterioration in the financial health of the borrower.Examples of such warning signs include unauthorized drawings, arrears in capital and interest and deterioration in the borrower’s operating environment. Financial institutions must have a system in place to formally review the status of the credit and the financial health of the borrower at least once a year. More frequent reviews (e. g. at least quarterly) should be carried out of large credits, problem credits or when the operating environment of the customer is undergoing significant changes. * Funds advanced are used only for the purpose stated in the customer’s credit application; * Financial condition of a borrower is regularly tracked and management advised in a timely fashion; * Borrowers are complying with contractual covenants; Collateral coverage is regularly assessed and related to the borrower’s financial health; * The institution†™s internal risk ratings reflect the current condition of the customer; * Contractual payment delinquencies are identified and emerging problem credits are classified on a timely basis; and * Problem credits are promptly directed to management for remedial actions. * More specifically, the above monitoring will include a review of up-to-date information on the borrower, encompassing: * Opinions from other financial institutions with whom the customer deals; * Findings of site visits; * Audited financial statements and latest management accounts; * Details of customers' business plans; * Financial budgets and cash flow projections; and * Any relevant board resolutions for corporate customers. 3. 3. 7 MAINTAINING THE OVERALL CREDIT PORTFOLIOAn important element of sound credit risk management is analyzing what could potentially go wrong with individual credits and the overall credit portfolio if conditions/environment in which borrowers operate change significantly. The results of t his analysis should then be factored into the assessment of the adequacy of provisioning and capital of the institution. Such stress analysis can reveal previously undetected areas of potential credit risk exposure that could arise in times of crisis. Possible scenarios that financial institutions should consider in carrying out stress testing include: * Significant economic or industry sector downturns; Adverse market-risk events; and * Unfavorable liquidity conditions. Financial institutions should have industry profiles in respect of all industries where they have significant exposures. Such profiles must be reviewed /updated every year. 3. 3. 8 CLASSIFICATION OF CREDIT Credit classification process grades individual credits in terms of the expected degree of recoverability. Financial institutions must have in place the processes and controls to implement the board approved policies, which will, in turn, be in accord with the proposed guideline. This guideline may also be called as Credit Risk Grading (CRG), is a collective is a collective efinition based on the pre-specified scale and reflects the underlying credit-risk for a given exposure. A Credit Risk Grading deploys a number/ alphabet/ symbol as a primary summary indicator of risks associated with a credit exposure. Credit Risk Grading is the basic module for developing a Credit Risk Management system. Credit risk grading is an important tool for credit risk management as it helps the Financial Institutions to understand various dimensions of risk involved in different credit transactions. The aggregation of such grading across the borrowers, activities and the lines of business can provide better assessment of the quality of credit portfolio of a FI.The credit risk grading system is vital to take decisions both at the pre-sanction stage as well as post-sanction stage. Two- types of factors play vital role in modeling the CRG, they are, 1. Quantitative factors 2. Qualitative factors The chart is given in the following page; Quantitative Financial Ratios Loan Repayment performance Credit Ratings Expected Default Frequencies Qualitative Management Quality Tenure in Business Operations Industry/Niche At the pre-sanction stage, credit grading helps the sanctioning authority to decide whether to lend or not to lend, what should be the lending price, what should be the extent of exposure, what should be the appropriate credit facility, what are the various facilities, on the basis of the above factors.At the post-sanction stage, the FI can decide about the depth of the review or renewal, frequency of review, periodicity of the grading, and other precautions to be taken. Risk grading should be assigned at the inception of lending, and updated at least annually. 3. 3. 9 MANAGING PROBL EM CREDITS/RECOVERY A financial institution’s credit risk policy should clearly set out how problem credits are to be managed. The positioning of this responsibility in the credit department of an i nstitution may depend on the size and complexity of credit operations. It may form part of the credit monitoring section of the credit department or located as an independent unit, called the credit workout unit, within the department.Often it is more prudent and indeed preferable to segregate the workout activity from the area that originated the credit in order to achieve a more detached review of problem credits. The workout unit will follow all aspects of the problem credit, including rehabilitation of the borrower, restructuring of credit, monitoring the value of applicable collateral, scrutiny of legal documents, and dealing with receiver/manager until the recovery matters are finalized. Financial institutions will put in place systems to ensure that management is kept advised on a regular basis on all developments in the recovery process, may that emanate from the credit workout unit or other parts of the credit department.There should be clear evidence on file of the steps t hat have been taken by the financial institution in pursuing its claims against a delinquent customer, including any legal steps initiated to realize on the collateral. Where there is a delay in the liquidation of collateral or other credit recovery processes, the rationale should be properly documented and anticipated actions recorded, taking into account any revised plans submitted by the borrower. The accountability of individuals/committees who sanctioned the credit as well as those who subsequently monitored the credit should be revisited and responsibilities ascribed. Lessons learned from the post mortem should be duly recorded on file. 4. 0 Findings and Analysis — Credit Risk Management by IDLC Finance Ltd To perform the overall CRM process 3 departments are working together at IDLC Finance Ltd.As a leading NBFI in Bangladesh IDLC has always tried to maintain the quality they achieve through 24th year business tenure. These three departments are- Collection of Client i nformation and preparing Appraisal Report CRM Department After getting the approval from the respective authority Internal Control Internal and Compliance (ICC) do all the Control &documentation processes Compliance Collection of installment and managing the overdue rentals as well Special Asset as dealing with the client’s default is Management done by Special Asset Management (SAM) (SAM) * . 4. 1 PROCEDURAL WORK FLOW OF LEASE MARKETING At the initial stage, IDLC concentrated to establish a market and then enlarge the market.The criteria based on which the market for lease financing has been established are as follows: * Diversification of portfolio * Selecting top industrial unit in the respective industry * Financing for Balancing, Modernization, Replacement and Expansion (BMRE) of existing unit * Priority of existing leases * Set up priority based on sector wise performance Primary focus of IDLC till now is in the area of financial leasing of industrial and professional e quipment and vehicles for three to five years term with particular emphasis on BMRE of existing units. Instead of lending funds to purchase equipment, IDLC provides the equipment and extends the exclusive right to its use against specified rental payments at periodic intervals.There are two types of client for which the procedural work flow would be different though the basic part would be the same. The different types of clients are * Existing Clients – with whom IDLC has already been working * New Clients – with whom IDLC has no business yet The basic procedural work flow is given below: The above procedures are briefly described below: Collect Client & Loan data Compute Credit Risk on the basis of Risk Grade Preparing the appraisal report on the basis of risk Approval by the appropriate authority Documentation Lease/Loan payment collection Creating Provision for default Function of SAM Expiry of Agreement The client applies for required facility through letter. Thes e required facility can vary from different sort of equipments for BMRE to vehicles or expansion projects. The letter generally consists of brief description about the asset to be procured, its price and reason for procurement along with its lease period. * IDLC studies the proposal and sends an offer letter to the client. The offer letter contains acquisition cost, lease period, per month rental and other terms & conditions to be applied if the agreement is done. It is to be noted here that the offer letter is a mere offer and by no means an agreement between the two parties.Thus, the terms & conditions may change upon final agreement. However, it seldom changes as that will hamper the goodwill of the company. * The client accepts the offer and submits an accepted offer letter. If the client agrees to the terms & conditions of the offer letter, they sign & seal the offer letter as accepted and send it back to IDLC. * IDLC collects initial information about the client. The initial i nformation are * CIB Undertaking & Form XII (if a limited company) for that client to be sent to Bangladesh Bank for CIB Report of the applying client (as per rule of Bangladesh Bank) * IDLC looks for banks opinion for that client The designated Relationship Manager prepares the appraisal report and evaluated the client’s proposal. The appraisal report consists of * Background analysis of the company * Management and organization * Cost estimate of equipment/vehicle * Technical and marketing analysis, both from macro and micro level * Financial analysis of the company. i. e. profitability projection, credit report, year wise performance * The appraisal report seeks approval from the appropriate authority. First of all the Relationship Manager places the report to Credit Evaluation Committee (CEC), which consists of representative from Credit Risk Management, Operational Risk Management, General Manager and Deputy Managing Director.After CEC consent, the report is sent to appr oving authority. * After approval, the documentation process starts. A sanction ledger is prepared and a sanction letter is issued in the client’s name. However, depending on the nature of negotiation, the documentation procedure varies. * The client collects the asset. * Proper insurance coverage is done depending upon the asset and procurement of asset from a selected pool of insurance companies. * The lease operation starts i. e. a formal agreement is signed by both IDLC and lessee. The lessee starts to pay the rental and the lease continues. * Generally, just after the last rental is paid on a regular basis, the transfer of ownership takes place.Depending upon the negotiated transfer price at the beginning, IDLC transfers the asset’s ownership to the client and lease expires. However, the lease operation can also be expired early through partial termination or foreclosure. For new clients the following few steps are added: * Identification of client – the id entification of new client is done through relationship management. The main sources of information about new clients are: * Existing client * Word of Mouth * Internal Connection * Client call * Walk-in Client * Prepare extensive appraisal report and seek formal bank & FI opinion. The documentation procedure can differ depending upon the modes of acquisition of asset.According to the guideline provided by Bangladesh Bank, IDLC considers the following factors while appraising a client and its finance proposal: 1. Business Risk Factors: * Industry * Size * Maturity * Production * Distribution * Vulnerability * Competition * Demand- supply situation * Strategic importance for the group and for the country * Concentration * Market reputation 2. Financial Risk Factors: * Profitability * Liquidity * Debt management * Post Balance sheet events * Projections * Sensitivity Analysis * Peer Group Analysis * Other Bank Lines 3. Management Risk Factors: * Experience/relevant background * Track r ecord of management in see through economic cycles * Succession * Reputation 4. Structural Risk Factors: * Identify working capital requirement Relate the requirement with asset conversion cycle * Purpose of the facilities should be clear and thus mode of disbursement should be preferably structured in a manner to make direct payment to the third party through LC, pay order, Bangladesh Bank cheques etc. 5. Security Risk Factors: * Perishablilty * Enforceability /Legal structure * Forced Sale Value (calculations of force sale value should be at least guided by Bangladesh Bank guidelines) ————————————————- 4. 3 WEIGHTS ASSIGNED TO EACH RISK FACTOR CRITERIA WEIGHT | LEVERAGING 20% The ratio of a borrower’s total debt to tangible net worth. LIQUIDITY 20% The ratio of a borrower’s Current Assets to Current Liabilities. | PROFITABILITY 20% The ratio of a borrowerà ¢â‚¬â„¢s Operating Profit to Sales. | ACCOUNT CONDUCT 10% Time length of relationship with the client | BUSINESS OUTLOOK 10% A critical assessment of the medium term prospects of the borrower, taking into account the industry, market share and economic factors. | CRITERIA WEIGHT | MANAGEMENT 5% The quality of management based on the aggregate number of years that the Senior Management Team (top 5 executives) has been in the industry. PERSONAL DEPOSITS 5% The extent to which the bank maintains a personal banking relationship with the key business sponsors/principals. | AGE OF BUSINESS 5% The number of years the borrower has been engaged in the primary line of business. | SIZE OF BUSINESS 5% The size of the borrower’s business measured by the most recent year’s total sales. Preferably based on audited financial statements. | ————————————————- 4. 4 MEASURES TA KEN FOR RESTORATION OF DEFAULT CLIENTS The Special Asset Management Department of IDLC is responsible for mending and improving the repayment pattern of the default clients.Principal Objectives of the SAM department is keeping overdue situation at possible lowest level so that provision for dues can be minimized so that the negative impact of defaults on the reported profit of IDLC can be kept at minimum level. For this the department goes through the following procedures: 1. Monitoring the overdue situation of the financed projects 2. Initiating procedures as appropriate for each case Some clients fail to make payments of rentals/ installments to the lender/ lessor institution. In several cases, the failure is temporary, which is eventually paid within a short time. But in other cases, the client continues to default and the situation worsens since it deteriorates the profitability condition of IDLC, just like any other Financial Institution.So, critical measures are taken on the p art of IDLC and these measures are mainly undertaken by Special Asset Management Department. 4. 5 FUNCTIONS OF SPECIAL ASSET MANAGEMENT (SAM) The Special Asset Management Department performs a number of activities to keep the overdue situation of IDLC within minimum level. These are: 1. Overdue Monitoring- Corporate, SME, Syndication 2. Overdue follow Up- Corporate, SME, Syndication(Phone, Visit, letter) 3. SAM Client Follow Up- (Regular, Difficult, Block, Litigated)- Phone, Visit, Letter, Negotiation 4. Termination, Block & Litigation- Initialization, Follow up, Court Attendance 5. Appointment of Lawyers for different Legal Procedures 6.Recovery Agent Appointment & Follow up 7. Rescheduling- Negotiation, Approval, Follow up 8. Routine works: Receivable Calculation, Closure, Waiver Approval, Adjustments, Reconciliation. 9. Letter Issue- Overdue Clients SAM departmental Targets: 1. Collection of Overdue Rentals 2. Reduction of Non- performing Loans (NPL) 3. Reduction of Infection rat io 4. Bad/Loss Provision Management- Incremental Provision Control 4. 5. 1. RECOVERY ACTION PLAN BY SAM Special asset management takes various recovery actions to reduce the overdue amount, thus reducing the infection ratio. These actions differ on the basis of investment classification as follows; 4. 5. 1. 1 REGULAR ACCOUNTS (RGACC) Age of overdue: One to Three months * Call immediate ext working day after 1st default installment to remind about overdue. * Try to get specific commitments from client. Committed date should not exceed seven days. * In case of no response from client within seven days, call the client again in order to ascertain reasons for delay and obtain another specific

Conditioning Lab essays

Conditioning Lab essays Throughout life, we, as a society, are subjected to numerous situations, where we are conditioned to react in a certain manner. In the lab session, we experienced operant conditioning where one is conditioned to a stimulus, and then reinforced based on that stimulus. There are two types of reinforcers, primary and secondary. Primary reinforcers consist of primary needs such as food and water, and it also is anything that causes harm that you can avoid. On the other hand, a secondary reinforcer is something learned, such as receiving good grades or candy. The experiment in class explored this aspect of learning, through the means of a virtual lab rat. There were two parts to the experiment, during the first part of the experiment, we had to record the number of times the rat scratched himself, licked himself, pressed the bar down, raised himself on two feet, and drank water. This section was timed for 10 minutes. Initially, this task became quite confusing because we were not sure what the actions were, and also the actions were occurring so fast, that both people watching to keep a count became quite overwhelming. Thus I read out the actions, and then my partner recorded the number of times it occurred. The majority of the actions performed by the rat were raises. The second section of the first part of the experiment comprised of keeping positively reinforcing the rat for performing a specific action of your choice. This segment was timed and allowed the experimenter to view a conditioned response to a conditioned stimulus. The stimulus we chose was the action of licking himself. Every time the rat would lick himself, I would press the space bar, thus releasing the pellet of food into his bowl. It did take a while to condition, but eventually the subject became conditioned to the specified action. The second section of the experiment was to time and record how many times he performed the actions, as in the f...

The Story of The Architecture Student in Denmark [Interview]

The Story of The Architecture Student in Denmark [Interview] September is the Study Month, not only in colleges, but on our blog too. Thats why we will dedicate our posts to the topics of studying, namely the issue of studying abroad. We have already published the interview with Judy Su a graphic design student who studied in Copenhagen. Today, we have the interview with another student - Ellen Wall - who has also made use of study abroad program and went to Denmark to study architecture. Before the interview, Ellen confessed that she loves to tell about her time in Denmark. Thats why she told us a lot of details about people, food, education, surprises and disappointments. As Ellen was also in a DIS ( Danish Institute for Study Abroad ) program we did not ask her questions about application process, and went straight to the questions about studying. What specific classes did you take? There were 4 classes: Interior Architecture Studio, European Storytelling, Danish Language and Culture, and 20th 21st Century Danish Architecture Please, tell more about your Danish language learning. Was it complicated for you? I am so glad I decided to take a Danish class while I was in Denmark. Even though the majority of Danes speak flawless English, being able to understand even a little bit made me feel so much more a part of the culture. I could read signs, I knew what I was looking at in the grocery store, I often caught and understood snippets of conversation at the dinner table. The Danes are just so proud of their country and their culture the language is a big part of that. It ended up being my favorite class at DIS. I learned so much about the Danes just by learning how to interact with them. What interesting assignments or projects on architecture did you get? I have seen many, many non-touristy places and buildings because of the field studies and projects I had with my classes. In my studio, we got the assignment to design a space in a very old building near to the parliament building, Christiansborg. We did small group critiques to talk about our conceptual and initial structural ideas. How was your project work organized? Was there anything specific about studying environment? Something that would apply to future study abroad students is that the Danish school system relies heavily on the benefits of group work. Most projects are done in groups and there is a lot of large or small group discussion and peer critique. I found this to be a great way to learn. There was definitely more of a collaborative feel to all of the classes and I benefited from the sharing of ideas with others. The other side of that is that not everybody learns this way, some individuals might be more successful on their own. Did you get complicated writing assignments? Tell about some of them. At DIS I studied in the Interior Architecture program. That being said, I didnt have too many difficult writing assignments. I did take a class called European Storytelling where I was asked to write a research paper. The prompt was very vague; we were able to write about anything at all that we had discussed in class. It was extremely open ended which I found to be a big challenge. I was also an Official Student Blogger for DIS. This was an ongoing volunteer project that I did for my Danish school. My blog entries were posted on the DIS webpage and I received a lot of traffic from prospective students and other people all over the world. Blogging for DIS is where I discovered my love for writing. Have you ever missed assignment deadlines while studying abroad? What is the college policy regarding missed deadlines there? I did not miss any assignments while abroad that I can recall. The missed assignments policy was left up to the instructors for the courses. Some of my instructors would accept late assignments and others did not. What did you like about Danish educational system in general? In general, what I like about the Danish school system is that school is free for everyone through the university level (and university students receive a monthly stipend from the government). Another positive is that the learning environment is an equal playing field. The instructors are all called by their first names and questions are encouraged. It feels less strict or structured than many of the classroom environments I have been a part of the the States. How would you describe your studying experience in several words? I had a unique experience because my school, DIS is a school specific to study abroad students, but most of the classes are taught by Danish instructors. In addition, I also learned a lot about the Danish school system because I took a Danish language and culture class and I lived with a family who had kids in the school system. How did you manage to balance studying and traveling? The benefit of DIS is that there are specifically designated travel weeks. A semester student at DIS has two separate weeks off from school for personal travel/or break from school in addition to two study tours with the core course class, one lasting a week and one lasting a half a week. This made balancing travel and study much simpler because I found that I had enough time for traveling outside of school. There were many students who liked to go on weekend trips. I didnt really do that. I was much happier spending my weekends at home with my host family and seeing what it is that Denmark has to offer rather than constantly leaving to see all of Europe. I didnt want to leave Denmark only to realize I hadnt seen any of it. I did, in general, have a difficult time balancing school work and everything else that goes with study abroad. I had to decide on my priorities while I was there. For me, the struggle was balancing time with my host family and time spent on school. So, you stayed with a host family. What was it like for an American student to live with Danish family? I was so nervous to meet them. I wondered if they would like me and what it would be like to live in the home of strangers. But I remember that upon meeting them and even in the very moments before I met them, walking down a hallway and seeing them at the end, waiting for me with big smiles, that I relaxed almost instantly. They were unfailingly kind and generous, curious and interested, fun and happy people. I was welcomed into their home and things fell into place quickly. I found it so much easier to learn about Danes and their culture and especially their language than I would had I not lived with a host family. My ten year old host brother and I became the best of buds. I learned so much from him and not a day does by that I dont think of him. Many of my favorite memories were things that happened with my host family and I genuinely cant imagine my study abroad experience without each and every one of them. How would you describe Danish people in general? Danes are very private people. At least in public settings. They dont small talk, they dont smile at passersby on the street, they have whisper-quiet conversations on public transportation (if they even converse at all). Theres no fear of anybody you dont know trying to make unwanted conversation in a public place. How did you feel about such cultural difference? Of course that goes two ways. It makes Danes very difficult to meet; they stick by the people they know. Its unlikely that one might make Danish friends by approaching them in a grocery store, at the bank, or on the train. To many Americans, this demeanor passes for rude because we are so used to an extreme, exaggerated politeness. This isnt to say that Danes dont care, in fact you might say they care more. If someone asks a Dane how are you they give the real answer and dont just say good. Was it a problem for you to meet new people in Copenhagen? The first time someone accidentally bumps into you and doesnt really apologize is off-putting. The first time you sit on a bus and someone is forced to sit next to you because its the only seat left and suddenly moves when an empty pair of seats opens up elsewhere is a little awkward. But the Danes make up for this by being genuinely warm, kind-hearted, curious people when you get to know them. I found that in more private settings, Danes are extremely curious. The dislike of small talk just meant that the Danes I spoke with typically skipped the polite get-to-know-you questions and jumped right into pressing questions about American politics or media or culture. It made for more meaningful conversation. What was your biggest disappointment during semester abroad? My biggest disappointment was only that I couldnt stay longer. I had such a wonderful time, I was very sad to leave. Of course there were day-to-day disappointments. Not everything is a wonderful, fantastic, awesome, cool, Danish, traveling moment. Sometimes I was sick, or sometimes I wasnt able to see or take part in something I was hoping to, or sometimes I missed dinner with my host family (often the best part of my day). But those disappointments are so on par with daily life that Ive mostly forgotten them by now. All I regret is the time I didnt spend with my Danish family, the things in Denmark that I never got to see, and the experiences I wasnt able to have because of a lack of time or because it was the wrong time of the year. Name your top Copenhagen memories. Showing off Denmark to my family. My family my mom, dad, and older sister came to visit me in Denmark towards the end of my semester. As I dragged them around Copenhagen to see all the important sights and buildings and museums, I realized how much I had learned about Denmark and about Danes in just a few months. I learned my way around a new city that was absolutely foreign to me, I learned parts of a new language, I learned history and music. I mastered the transportation system. It was so exciting to share with my family the country that I had fallen in love with both instantly upon arrival and gradually more and more each passing day. Another one is being mistaken for a Dane! The Danes are an exclusive bunch of people. They are very proud to be Danish. They are also model-beautiful. So the first time I was mistaken for a Dane was kind of a rush. It happened several times over the course of my semester. Sometimes it was another Dane asking a question about the train. Sometimes it was a lost tourist asking for directions. But every time, and especially the first time, it was like an acknowledgment that I was fitting in, that I was doing okay, that I wasnt out of place or unwanted. At least, thats what if felt like to me. Which Danish food would you recommend to try? The pastries are divine. What is interesting about the whole pastry situation is that you cant get a Danish. What Americans refer to as a Danish does not exist in Denmark. But pastries, or weinerbrà ¸d in Danish, are a work of culinary art. They are visually appealing and delicious. Laukagehuset (a popular Danish pastry chain) (pronounced lau-kay-hoo-set) is around every corner and tempts the taste buds everywhere you go. The best life lesson learnt in Copenhagen I learned a lot while I studied abroad, but the majority of it was not factual or school-related. It was a period of time in which I did a lot of personal, individual learning about myself and what is important to me. The biggest life lesson I learned is that I should never force myself to do things that dont make me happy. I dont want to say that I learned life is short, but rather that I learned and realized how valuable my time is. Being in Denmark helped me to understand what makes me happy as a human being. It slowly dawned on me that I never wanted to spend one second doing something that I hate because I dont want to regret it when Im 90. In the grand scheme of things, this is not plausible. Of course Ill have to do things that I dont like every once in a while. But while I was in Denmark I was working on discovering what it is that I truly love and now I try to spend more of my time doing those things. What helps students succeed when studying abroad? Please, share some tips To succeed when studying abroad, get involved! Try to integrate into the culture as much as possible. Live with a host family, learn the language, join a club, meet young natives, take classes with an emphasis on the history or culture of the country, participate in cultural traditions with friends or host family members, listen to the countrys music. Really, really try to experience everything the country has to offer. Do things the way the native people do things, even if you feel like your way might be better or faster. Try everything. Learn about everything. Keep an open mind, you never know what you might like. Thanks Ellen! We are sure these great tips will help anyone to get the most of their study abroad experience! If you would like to learn more about Ellen Wall and her Denmark life, you are welcome to ask questions as well as sharing your thoughts in the comments below.