Industry Profile: Non Banking Financial Companies

A STUDY ON MARKET POTENTIAL OF MFS AT MMFSL BANGLORE
INDUSTRY PROFILE
NON BANKING FINANCIAL COMPANIES
Non-banking financial companies (NBFCs) are fast emerging as an important

segment of Indian financial system. It is an heterogeneous group of institutions (other
than commercial and co-operative banks) performing financial intermediation in a
variety of ways, like accepting deposits, making loans and advances, leasing, hire
purchase, etc. They raise funds from the public, directly or indirectly, and lend them
to ultimate spenders. They advance loans to the various wholesale and retail traders,
small-scale industries and self-employed persons. Thus, they have broadened and
diversified the range of products and services offered by a financial sector. Gradually,
they are being recognized as complementary to the banking sector due to their
customer-oriented services; simplified procedures; attractive rates of return on
deposits; flexibility and timeliness in meeting the credit needs of specified sectors;
etc.
The working and operations of NBFCs are regulated by the Reserve Bank of India
(RBI) within the framework of the Reserve Bank of India Act, 1934 (Chapter III B)
and the directions issued by it under the Act.
As per the RBI Act, a 'non-banking financial company' is defined as:-
I a financial institution which is a company;
ii) A non banking institution which is a company and which has as its principal
business the receiving of deposits, under any scheme of arrangement or in any other
manner, or lending in any manner;
iii) Such other non-banking institution or class of such institutions, as the bank may,
with the previous approval of the Central Government and by notification in the
Official Gazette, specify.
Under the Act, it is mandatory for a NBFC to get itself registered with the RBI as a
deposit taking company. This registration authorises it to conduct its business as an
NBFC. For the registration with the RBI, a company incorporated under the
Companies Act, 1956 and desirous of commencing business of non-banking financial
institution, should have a minimum net owned fund (NOF) of Rs 25 lakh (raised to Rs
200 lakh w.e.f April 21, 1999). The term 'NOF' means, owned funds (paid-up capital
DVHIMSRPage 1
and free reserves, minus accumulated losses, deferred revenue expenditure and other
intangible assets) less, I) investments in shares of subsidiaries/companies in the same
group/ all other NBFCs; and ii) the book value of debentures/bonds/ outstanding loans
and advances, including hire-purchase and lease finance made to, and deposits with,
subsidiaries/ companies in the same group, in excess of 10% of the owned funds.
The registration process involves submission of an application by the company in the

prescribed format along with the necessary documents for RBI's consideration. If the
bank is satisfied that the conditions enumerated in the RBI Act, 1934 are fulfilled, it
issues a 'Certificate of Registration' to the company. Only those NBFCs holding a
valid Certificate of Registration can accept/hold public deposits. The NBFCs
accepting public deposits should comply with the Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 1998, as issued by the
bank. Some of the
SIGNIFICANCE OF NBFCs IN INDIA:
The importance of NBFCs in delivering credit to the unorganized sector and to small
borrowers at the local level in response to local requirements is well recognized. The
rising importance of this segment calls for increased regulatory attention and focused
supervisory scrutiny in the interests of financial stability and depositor protection. In
response to the perceived need for better regulation of the NBFC sector, the Reserve
Bank of India (RBI) Act, 1934 was amended in 1997, providing for a comprehensive
regulatory framework for NBFCs. According to the Economic Survey 2010-11, it has
been reported that NBFCs as a whole account for 11.2% of assets of the total financial
system. With the growing importance assigned to financial inclusion, NBFCs have
come to be regarded as important financial intermediaries particularly for the small-
scale and retail sectors. In the multi-tier financial system of India, importance of
NBFCs in the Indian financial system is much discussed by various committees
appointed by RBI in the past and RBI has been modifying its regulatory and
supervising policies from time to time to keep pace with the changes in the system.
NBFCs have turned out to be engines of growth and are integral part of the Indian
financial system, enhancing competition and diversification in the financial sector,
spreading risks specifically, at times of financial distress and have been increasingly
recognized as complementary of banking system at competitive prices. The Banking
sector has always been highly regulated; however, simplified sanction procedures,
DVHIMSRPage 2
flexibility and timeliness in meeting the credit needs and low cost operations resulted
in the NBFCs getting an edge over banks in providing funding. Since the 90s crisis
the market has seen explosive growth, the compounded annual growth rate of NBFCs
was 40% in comparison to the CAGR of banks being 22% only. NBFCs have been
pioneering at retail asset backed lending, lending against securities, microfinance etc.
and have been extending credit to retail customers in under-served areas and to
unbanked customers The activities of non-banking financial companies (NBFCs) in
India have undergone qualitative changes over the years through functional
specialization. The role of NBFCs as effective financial intermediaries have been well
recognized they have inherent ability to take quicker decisions, assume greater risks
and customize their services and charges more according to the needs of the clients.
While these features, as compared to the banks, have contributed to the proliferation
of NBFCs, their flexible structure sallow them to unbundle services provided by
banks and market the components on competitive basis. At present, NBFCs in India
have become prominent in a wide range of activities like hire-purchase finance,
equipment lease finance, loans, investments, etc. By employing innovative marketing
strategies and devising tailor-made products, NBFCs have also been able to build up a
clientele base among the depositors, mop up public savings and command large
resources as reflected in the growth of their deposits from public, shareholders,
directors and other companies and borrowings by issue of non-convertible debentures,
etc. In 1998, the definition of public deposits was for the first time contemplated as
distinct from regulated deposits and as such, the figures thereafter are not comparable
with those before.
Important regulations relating to acceptance of deposits by the NBFCs are
 They are allowed to accept/renew public deposits for a minimum period of 12

months and maximum period of 60 months.
 They cannot accept deposits repayable on demand.
 They cannot offer interest rates higher than the ceiling rate prescribed by RBI
from time to time.
 They cannot offer gifts/incentives or any other additional benefit to the

depositors.
 They should have minimum investment grade credit rating.
DVHIMSRPage 3
 Their deposits are not insured.
 The repayment of deposits by NBFCs is not guaranteed by RBI.
INDUSTRY STRUCTURE OF NBFCS
chart No:1.1
DVHIMSRPage 4
Types of NBFCs registered with the RBI are:-
 Equipment leasing company: - is any financial institution whose principal

business is that of leasing equipments or financing of such an activity.
 Hire-purchase Company:- is any financial intermediary whose principal

business relates to hire purchase transactions or financing of such transactions.
 Loan company: - means any financial institution whose principal business is

that of providing finance, whether by making loans or advances or otherwise
for any activity other than its own (excluding any equipment leasing or hire-
purchase finance activity).
 Investment Company: - is any financial intermediary whose principal

business is that of buying and selling of securities.
Now, these NBFCs have been reclassified into three categories:-
 Asset Finance Company (AFC)
 Investment Company (IC) and
 Loan Company (LC). Under this classification, 'AFC' is defined as a financial

institution whose principal business is that of financing the physical assets
which support various productive/economic activities in the country.
Types of NBFCs:
The Non-Banking Finance Companies operating in India fall in the following broad
categories.
1) Equipment Leasing Company is a company which carries on as its principal

business, the business of leasing of equipments or the financing of such
activity. Apart from their Net Owned Funds (NOF), the leasing companies
raise finds in the form of deposits from other companies, banks and the
financial institutions.
DVHIMSRPage 5
Public deposits and inter-corporate deposits account for 74 percent of their total
funds. Leasing is a form of rental system. A lease is a contractual arrangement
whereby the lessor grants the lessee the right to use an asset in return for
periodical lease-rent payments.
There are two types of leases
A. Operating lease, and
B. Financial or capital lease. The operating lease is a short-term lease which can be
cancelled. Financial lease is a non-concealable contractual commitment.
2) Hire Purchase Finance Company is a company which carries on as its principle

business, hire purchase transactions or the financing of such transactions. The
sources of hire-purchase finance are
A. Hire purchase Finance Companies.
B. Retails and Wholesale Traders.
C. Bank and Financial Institutions.
Hire-purchase finance or credit is a system under which term loans for purchase of
goods, producer goods or consumer goods and services are advanced which have
to be liquidated under an installment plan. The period of credit is generally one to
three years. The hire purchase credits are available for a wide range of products
and services. Hire-purchase finance companies are the public or private limited
companies or partnership firms engaged in giving credit for acquiring durable
goods.
3) Housing Finance Company is a company which carries on as its principle

business, the financing of the acquisition or construction of houses including the
acquisition or development of plots of lands for construction of houses. These
companies are supervised by National Housing Bank, which refinances housing
loans by scheduled commercial banks, co-operative banks, housing finance
companies and the apex co-operative housing finance societies.
DVHIMSRPage 6
4) Investment Company means any company which carries on as its principle

business the acquisition of securities. These types of companies are investment
holding companies formed by business houses. As such they provide finance
mainly to companies associated with these business houses.
As compare to open-end investment companies or mutual funds/units trust, these

investment companies are close end companies having a fixed amount of share
capital. Almost all prominent industrial groups have their own investment
companies.
5) Loan Company is a company which carries on as its principle business, the

providing of finance whether by making loans or advances or otherwise for any
activity other than its own. (This category excludes No.1 to No. 3 above
categories).
These types of companies are generally small partnership concerns which obtain
funds in the form of deposits from the public and give loans to wholesale and
retail traders, small scale industries and self-employed persons. These companies
collect fixed deposits from the public by offering higher rates of interest and give
loans to others at relatively higher rates of interest.
6) Mutual Benefit Finance Company (i.e. Nidhi Company) means any company
which is notified by the Central Government under section 620A of the
Companies Act, 1956. The main sources of funds are share capital, deposits from
their members and deposits from the public.
7) Chit Fund Company is a company which collects subscriptions from specified

number of subscribers periodically and in turn distributes the same as prizes
amongst them. Any other form of chit or kuri is also included in this category. The
chit fund companies operations are governed by the Chit Fund Act, 1982, which is
administered by State Governments. Their deposit taking activities are regulated
by the Reserve Bank.
The chit fund companies enter into an agreement with the subscribers that
everyone of them shall subscribe a certain amount in installments over a definite
period and that every one of such subscriber shall in his turn, as determined by lot
or by auction or by tender, be entitled to a prize amount.
DVHIMSRPage 7
8) Residuary Non-Banking Company is a company which receives deposits under

any scheme by way of subscriptions/contributions and does not fall in any of the
above categories.
There are few unhealthy features of the operations of these companies;
i) Negative NOF (Net Owned Fund)
ii) Understatement of their deposit liability
iii) Forfeiture of deposits
iv) Levy of service charges on the depositors
v) Payment of high rates of commission, etc.
To remove these features, RBI has extended prudential norms to these companies,
introduced compulsory registration requirement, specified minimum rates of interest
payable on their deposits under different schemes. Under the RBI (Amendment) Act,
1997, the RBI directly inspects and monitoring the activities of these companies.
Registration:
The Reserve Bank of India (Amendment) Act, 1997 provides for compulsory
registration with the Reserve Bank of all NBFCs, irrespective of their holding of
public deposits, for commencing and carrying on business, minimum entry point
norms, maintenance of a portion of deposits in liquid assets, creation of Reserve Fund
and transfer of 20 percent of profit after tax annually to the fund.
The act provides for an entry point norm of Rs. 25 lakh as the minimum Net Owned
Fund (NOF). Subsequently, for new NBFC‘s seeking registration with the Reserve
Bank to commence business on or after April 21, 1999, the requirement of minimum
level of NOF was revised upwards to Rs. 2 crore.
No NBFC can commence or carry on business of a financial institution including

acceptance of public deposit without obtaining a Certificate of Registration (COR)
from the Reserve Bank.
DVHIMSRPage 8
RBI Directions to NBFCs:
Reserve Bank of India announced a set of measures to protect the interest of

depositors and provide more effective supervision over NBFCs on January 2, 1998.
The regulations stipulate on the NBFCs, an upper limit both on public deposits to be
accepted, on the rate of interest to deposits, in order to restrain then from offering
incentives and mobilize excessive deposits.
The disclosure requirements have been strengthened and responsibilities cast on the
Board of Directors and auditors of the companies to ensure proper conformation
deposit regulations and prudential norms prescribed by RBI.
BANK VERSUS NON-BANKING FINANCIAL COMPANIES:
While commercial banks and non-banking financial companies are both financial
intermediaries (middleman) receiving deposits from public and lending those
commercial banks is called ―Big brotherǁ while the ―NBFCsǁ is called as the
―Small brotherǁ. But there are some important differences between both of them they
are as follows:
Banks NBFCs
Definition Banking is acceptance of deposits NBFCs are companies carrying

withdraw able by cheque or financial business
demand; NBFCs cannot accept
demand deposits
Scope of business Scope of business of the bank is There is no bar on NBFCs

limited by sec 16(1) of BR Act. carrying activity other then
financial activity.
Major limitation No non banking activity is carried. Cannot provide checking

on Business facilities.
Foreign Up to 74% is allowed to private Up to 100% is allowed

investment sector bank
Need for a license License norms are tightly It is comparatively much easier
DVHIMSRPage 9
controlled and generally it is to get a registration as an NBFC

perceived to be quite difficult to
get a license for a bank
Regulations BR Act and RBI Act lay down the Much lesser control over NBFC
stringent control over the bank.
REGULATORY FRAMEWORK:
The RBI Act was amended in 1997 to provide for comprehensive regulatory
framework for NBFCs. As per the RBI (Amendment) Act 1997, the RBI can issue
directions to NBFCs & its‘ auditors, prohibit deposit acceptance and alienation of
assets by NBFCs and initiate action for winding up of NBFCs. The new regulations
provide:
 Compulsory registration for all NBFCs, irrespective of their holding of public

deposits for commencing and carrying on business of a non-business
financial institution.
 The amended act also classified NBFCs into three broad categories i) NBFCs
accepting public deposits; ii) NBFCs not accepting/holding public deposits;
and iii) core investment companies (i.e. those acquiring shares/securities of
their group/holding/subsidiary companies to the extent of not less than 90% of
total assets and which do not accept public deposits).
 Minimum entry point net-worth of Rs.2.5 million which was subsequently

revised upwards to Rs.20 million.
 Deposit mobilization linked to net-worth, business activities and credit rating.
 Maintenance of 12.5% of their deposits in liquid assets.
 Creation of a Reserve Fund and transfer of 20% of profit after tax but before
dividend to the fund.
 Ceiling on maximum rate of interest those NBFCs can pay on their public
deposits.
DVHIMSRPage 10
 NBFCs with an asset size of at least Rs.1 billion or a deposit base of at least
Rs.200million are required to have Asset-Liability Management systems and
constitute an Asset-Liability Management Committee.
 Further, in order to monitor the financial health and prudential functioning of

NBFCs,
The RBI issued directions regarding acceptance of deposits, prudential norms like
capital adequacy, income recognition, asset classification, provisioning for bad and
doubtful assets, exposure norms and other measures. For Instance, capital to risk-
weighted assets ratio (CRAR) norms were made applicable to NBFCs in 1998. As per
the CRAR norms, every deposit taking NBFC is required to maintain a minimum
capital, consisting of Tier I and Tier II capital, of not less than 12% (15% in case of
unrated deposit-taking loan investment companies) of its aggregate risk-weighted
assets and of risk-adjusted value of off-balance sheet items. Besides, before 2000, the
prudential norms applicable to banking sector and NBFCs were not uniform. Within
the NBFC sector also, the prudential norms applicable to deposit taking NBFCs were
more stringent than those for non-deposit taking NBFCs. Since 2000, the RBI has
initiated measures to reduce the scope of ‗regulatory arbitrage‘ between banks,
NBFCs-D (Deposit taking NBFCs) and NBFCs-ND (Non-Deposit taking NBFCs).
The regulatory framework has undergone significant change in the last few years. The
Regulatory policies, which mostly focused on NBFCs-D until past few years, are now
paying increasing attention to NBFCs-ND as well. The change in regulatory stance is
largely due to a significant increase in both the number and balance sheet size of
NBFCs-ND segment that gave rise to systemic concerns. In view of these
developments, NBFCs-ND with assets size of Rs1 billion and above were classified
as systemically important NBFCs (NBFCs-ND-SI) and were subjected to ‗limited
norms & regulations‘ such as CRAR and exposure norms prescribed by the RBI.
DVHIMSRPage 11
The salient features of the Director are stated hereunder:
Categorization of Companies:
For the purpose of the new regulations, NBFCs have been divided into three
broad categories an indicated below:
(a) NBFCs accepting public deposits.
(b) NBFCs not accepting public deposits are engaged in loan, investment, hire
purchase finance and equipment leasing activities.
(c) NBFCs not accepting public deposits and has acquired shares/securities in their
own group/ holding/subsidiary companies of not less than 90 percent of their total
assets and are not trading in these shares/securities.
While NBFCs accepting public deposits will be subjected to all the provisions of the
Directors, those which do not accept public deposits will be supervised in a limited
manner.
RESENT OVER LOOK OF BANKING SCCTOR.

The Indian banking system consists of 27 public sector banks, 21 private sector banks,
49 foreign banks, 56 regional rural banks, 1,562 urban cooperative banks and 94,384
rural cooperative banks, in addition to cooperative credit institutions.
As of Q3 FY19 @ total credit extended by commercial banks surged to
Rs 93,751.17 billion (US$ 1,299.39 billion) and deposits grew to Rs 120,818.92
billion (US$ 1,866.22 billion). Assets of public sector banks stood at US$ 1,557.04
billion in FY18.
Indian banks are increasingly focusing on adopting integrated approach to
risk management. Banks have already embraced the international banking supervision
accord of Basel II, and majority of the banks already meet capital requirements of
Basel III, which has a deadline of March 31, 2019.
Reserve Bank of India (RBI) has decided to set up Public Credit Registry
(PCR) an extensive database of credit information which is accessible to all
stakeholders. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017
Bill has been passed and is expected to strengthen the banking sector.
DVHIMSRPage 12
Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased to

Rs 953.82 billion (US$ 13.65 billion) and 351.6 million accounts were opened in
India^. In May 2018, the Government of India provided Rs 6 trillion (US$ 93.1
billion) loans to 120 million beneficiaries under Mudra scheme. In May 2018, the
total number of subscribers was 11 million, under Atal Pension Yojna.
Rising incomes are expected to enhance the need for banking services in
rural areas and therefore drive the growth of the sector. As of September 2018,
Department of Financial Services (DFS), Ministry of Finance and National
Informatics Centre (NIC) launched Jan Dhan Darshak as a part of financial inclusion
initiative. It is a mobile app to help people locate financial services in India.
The digital payments revolution will trigger massive changes in the

way credit is disbursed in India. Debit cards have radically replaced credit cards as the
preferred payment mode in India, after demonetisation. Debit cards garnered a share
of 87.14 per cent of the total card spending.
DVHIMSRPage 13
ORGANIZATIONAL STUDY
INTRODUCTION OF THE COMPANY:
A) THE MAHINDRA GROUP:
The Mahindra group is an Indian multinational conglomerate holding

company headquartered at Mahindra Towers in Mumbai, India, with operations in
over 100 countries around the globe. The group has its presence in aerospace,
agribusiness, aftermarket, automotive, components, construction equipment, defense
energy, farm equipment, finance and insurance, industrial equipment, information
technology, leisure and hospitality, logistics, real estate, retail and two wheelers. It is
considered to be most reputable Indian industrial houses with market leadership in
utility vehicles as well as tractors in India.
B) FORMATION:
Mahindra & Mohammed was incorporated in 1945 by the brothers J.C. Mahindra and
K C Mahindra & Malik Ghulam Muhammad, in Ludhiana, Punjab to trade steel.
Following the Partition of India in 1947, Malik Ghulam Muhammad left the company
and emigrated to Pakistan where he became the first finance minister of the new state
(and later the third Governor General in 1951). In 1948, K.C. Mahindra changed the
company's name to Mahindra & Mahindra.
Building on their expertise in the steel industry, the Mahindra brothers began trading
steel with UK suppliers. They also won a contract to manufacture Willys Jeeps in
India and began producing them in 1947. By 1956, the company was listed on the
Bombay Stock Exchange, and by 1969 the company had entered the world market as
an exporter of utility vehicles and spare parts. Like many Indian companies, Mahindra
responded to the restrictions of the License Raj by expanding into other industries.
Mahindra & Mahindra created a tractor division in 1982 and a tech division (now
Tech Mahindra) in 1986. It has continued to diversify its operations ever since
through both joint ventures and Greenfield investments.
By 1994, the Group had become so diverse that it undertook a fundamental

reorganization, dividing into 6 Strategic Business Units:
DVHIMSRPage 14
Automotive, Farm Equipment, Infrastructure, Trade and Financial Services,

Information Technology and Automotive Components (known internally as well as
tractors in India.
Mahindra & Mahindra Financial Services Ltd
The Mahindra Finance journey started on January 1, 1991, as Maxi Motors

Financial Services Limited. They received the certificate of commencement of
business on February 19, 1991. On November 3, 1992, Mahindra Finance changed
their name to Mahindra & Mahindra Financial Services Limited. Mahindra Finance is
registered with the Reserve Bank of India as asset finance, deposit taking NBFC.
In 1993 it commenced financing M & M Utility vehicles and in 1995 started its first
branch outside Mumbai, in Jaipur and began financing Non M & M vehicles in 2002
and got into the business of financing of Commercial Vehicles and Construction
Equipments in 2009. 2011 was the year in which they had a Joint Venture with
Rabobank subsidiary for tractor financing in USA and consolidated the product
portfolio by introducing Small and Medium Enterprises (SME) financing.
CORPORATE VISION:
To be a leading financial services provider in semi-urban rural India
CORPORATE MISSION
To transform rural lives and drive positive change in the communities
DVHIMSRPage 15
BUSINESS STARATEGY OF MAHINDRA FINANCE:
Chart no:2.1
Grow in rural and urban markets for vehicle and automobile finance
Expand Branch Network
Leverage existing customers base through direct marketing initiatives
Diversify Product Portfolio
Broad Base Liability Mix
Continuing to attract, train and retain talented employees
Effective use of technology to improve productivity
Leverage the Mahindra –ECO System
DVHIMSRPage 16
OBJECTIVES OF THE MAHINDRA FINANCE:
The bank’s several objectives are as below:
 To identify the level of general awareness about Mahindra Finance.
 To analyze the role of different demographic variables of the investors (Age,

Gender, income & occupation) on the preference for Fixed Deposits.
 To find out relative preference of investors among the various financial

instruments (FD/Equities/MF/Other).
 To find out the preference of investors among the alternative FD products

available in the market.
 To analyze the response of inventors towards the Mahindra Finance Fixed

Deposits.
Products and Services
Vehicle Financing: Vehicle Financing: Auto and utility vehicles, tractors, cars,
commercial vehicles and construction equipment Pre-owned vehicle lending loans for
pre-owned cars, multi-utility vehicles, tractors and commercial vehicle
SME Financing: Loans for varied purposes like project finance, equipment finance
and working capital finance.
Housing Finance: Finances, rural and semi-urban population to build self-sustaining

houses, pakka houses and ensure their uplift meant in society
Insurance Broking: Insurance solutions to retail customers as well as corporations

through our subsidiary Mahindra Insurance Brokers Limited
Asset Management Company (Mutual Fund): Launched in June 2016, it offers

mutual fund products, whose NAV is around 1000 INR. The MAMC started with an
AUM of 1200 Million INR.
Mutual Fund distribution: Advises clients on investing money through AMFI

certified professionals under the brand Mahindra Finance Fins mart.
Fixed Deposits: The MMFSL Fixed Deposit has a CRISIL rating of 'FAAA',
indicating a high level of safety.
DVHIMSRPage 17
MAJOR PRODUCT AND SERVICES:
The company‘s product portfolio includes right from finance for two-
wheelers, tractors, farm equipment, cars and utility vehicles and construction on equip
mental have a group of providing investment advice, surveying available market
products and choosing the most suitable to customers‘ needs. The average loan size is
about Rs. 3, 50,000/- [US$ 7,600].
List of Products offered by Mahindra Finance:
1) Tractor Loans: Financing is provided for a wide range of tractors of the

Mahindra, Swaraj & Shaktiman brands. The loans are highly customized
specific to farmer requirements.
2) Utility Vehicles: Mahindra finance provides loan schemes for Mahindra

Utility vehicles and other multi-utility vehicles; it also provides trade advance
facilities for dealers.
3) Car Loans: The Company provides loans for car and is preferred financier for
M&M, Hindustan Motors, Hyundai, General Motors, Maruti Udyog Limited.
The loan obtaining process ensures maximum flexibility, minimum paper
work and highly customized loans to suit car buyer‘s needs.
4) Three-Wheeler Loans: The Company supports a wide range of Mahindra

three-Wheelers financing with flexible repayment and minimal
documentation. Company‘s customized financial options and quick process of
sanctioning a loan makes acquiring a new three-wheeler easier and faster.
5) Commercial Vehicle Loans: The Company has loan schemes for commercial
vehicles including trucks, buses, tippers, excavators, light commercial
vehicles, etc. Within this segment company operates in financing both–new as
well as old vehicles.
6) Two-Wheeler Loans: The Company provides loans for a wide range of two-
wheelers, which include motor bikes, scooters the customers, are offered
speedy loans with flexible repayment options. The company provides loans to
women customers at special rates and offers fast approvals for the same.
DVHIMSRPage 18
7) Construction equipment: the company has range of simple and flexible loans
for customers in need of construction equipments within this segment
company operates in financing both new as well as old equipment.
8) Refinance: The Company has products to support purchase of used cars,

utility vehicles, commercial vehicles and tractors. It also provides expedient
loans against an existing car, utility vehicle and other commercial vehicles.
9) Personal Loans: The Company has launched products in personal loans

segment. Customers can get loans for their needs like marriage related
expenses and children‘s education, Medical treatment, Agricultural, etc.
10) Fixed Deposit: MMFSL offers fixed deposits as one of the options for
financial savings. As of June 2011, the fixed deposits offered by MMFSL have
been given rating of FAAA by CRISIL. MMFSL offers its customers the
options of cumulative and non-cumulative deposits.
11) Gold Loan: MMFSL launched its "Loan against Gold" product in Kerala.
This offering helps to provide liquidity against gold ornaments without having
to sell them. This offering was launched considering that Kerala records the
highest number for remittance of funds from overseas, especially the Middle
East.
DVHIMSRPage 19
Table No: 2.1 Profile of Mahindra Financial Services ltd
Type Public company
Traded as NSE: M&MFIN

BSE: 532720
Industry NBFC
Founded 1991
Headquarters Mumbai, India
Area served India
Key people Ramesh Iyer, Vice Chairman & President
Products Financial services
Revenue ₹49,5300 million (FY'16)
Total assets ₹31,6650.72 million (FY'17)
Total equity ₹1,1270.1 million (FY'17)
Number of employees 35,000+ (FY'18)
Parent Mahindra & Mahindra
Website MahindraFinance.com
DVHIMSRPage 20
SUBSIDIARIES
Mahindra Mutual Fund
Mahindra Asset Management Company Private Limited is a wholly owned

subsidiary of Mahindra and Mahindra Financial Services Limited (MMFSL).
Mahindra AMC Pvt. Ltd is the Investment Manager for Mahindra Mutual Fund. It
started its operation in the first week of July 2016, with an AUM of 1200 Million INR
and its NAV is floating around 1000 INR Mahindra Mutual Fund endeavours to offer
a variety of mutual fund schemes pan India, with special focus in rural and semi-
urban areas.
Mahindra Insurance Brokers Limited
In FY 2012-13, the insurance broking subsidiary, Mahindra Insurance Brokers

Limited (MIBL) crossed the 8, 00,000 mark in terms of the policies served. The
Company‘s total policies, at the end of 2012-13, stood at 8, 39,408 for both life and
non-life retail business lines. It reached a total of Rs. 600 Cores gross premium. The
income increased by 85 per cent from Rs. 46.6 Cores in 2011-12 to Rs. 86.3 Cores in
2012-13. During the year, MIBL entered into a strategic partnership with Leapfrog
Investments, world‘s largest investor in insurance for the underserved. Through its
subsidiary company, Inclusion Resources Private Limited, Leapfrog invested Rs. 80.4
Cores for a 15 per cent shareholding in MIBL.
Mahindra Rural Housing Finance Limited
In FY 2012-13, Mahindra Rural Housing Finance Limited (MRHFL)

disbursed loans aggregating to Rs. 432.9 Cores, up from Rs. 266.8 Cores in the
previous year. The profit after tax for 2012-13 stood at Rs. 222.3 Cores, against Rs.
DVHIMSRPage 21
11.9 Cores in the previous year. The outstanding loan portfolio, as on 31 March 2013,
stood at Rs. 879.5 Cores.
Mahindra Business and Consulting Services Private Limited
Mahindra Finance‘s wholly owned subsidiary, Mahindra Business &

Consulting Services Private Limited (MBCSPL), provides staffing services primarily
to Mahindra Finance. It also serves the subsidiaries (MIBL and MRHFL) and parent
company (Mahindra & Mahindra Limited). During the year, MBCSPL deputed 8,098
employees to these companies. The Profit after Tax increased from Rs. 7.1 Lacks in
2011-12 to Rs. 173.8 Lacks in 2012-13.
Social Initiatives
Mahindra Finance has engaged in various social initiatives to provide people

with education, healthcare facilities and reduce environmental footprint. Some of the
initiatives include:
Lifeline Express
The Lifeline Express is a mobile hospital run on a train with five railway
coaches. The coaches are equipped with updated medical and surgical facilities to
provide free, on-the-spot diagnosis and treatment. It addresses the medical
requirements of inhabitants from India‘s remote, rural corners that have scarce
medical facilities. About 2,500 patients suffering from disabilities like cleft lip,
deafness, polio (for children under 14 years) and cataract are treated on board.
Mahindra Finance conducted its first ever solo journey of the Lifeline Express at Puri
(Odisha) from 24 September to 14 October 2012.
Mahindra Hariyali
Mahindra Hariyali is the tree plantation model at Mahindra Group. Mahindra Finance
partnered with schools, colleges, trusts, Government‘s Forest Departments and old
age homes to spread our green agenda. They planted around 54,000 saplings across
DVHIMSRPage 22
India. To protect the environment, Mahindra Finance undertook various initiatives.

By focusing on optimum natural resource usage and reducing Greenhouse Gas
emission. Mahindra Finance has controlled consumptions of electricity, water and
paper significantly. They have also installed solar panels at various remote branches.
Other Social Initiatives
Mahindra Finance organized Blood Donation camps in 2012-13 and collected

1,085 bottles of blood. This activity was a part of their banner of Employee Social
Options (ESOPS) along with various other social projects. They also donated funds to
various NGOs thus helping them in their purpose of buying ambulances.
Awards & Recognitions
 Winner of Golden Peacock HR Excellence Awards Organized by Institute of

Directors Silver
 Award for Best Corporate Website Organized by ABCI Awards in 2012

(Association of Business Communicators of India)
 Ranked 5th in the Financial Services Sector and among the Top 50
companies having over 1,000 employees by Great Place to Work Institute.
Silver Award for Best Corporate Website
 Ranked 10th in the prestigious Dun & Bradstreet's India's Top 500
Companies 2012.
 Wins the ‘commercial Vehicle Financier of the Year ‘award by IndianOil

award.
 Mahindra Finance takes great pride to announce the recognition of being the
11th among the 25th best largest workplaces in Aisa 2019. Awarded by great
places to work.
 Mahindra finance has won the outlook Money ‘ Retail NBFC of the Year
2018’. The awards focused on ‘Digital and technological’ innovations
,performance and governance.
DVHIMSRPage 23
 Mahindra Finance has been honored with two prestigious award at the Rural
Marketing Forum and Awards 2019.
 Mahindra & Mahindra Financial Services Limited , Has been awarded the “
Golden Peacock Award for Corporate Social Responsibility” during the 13th
International Conference on Corporate Social Responsibility Organized by
Institute of Directors.
CUSTOMER CENTRICITY:
TYPES OF CUSTOMERS IN THE AREA:
Location Wise- Customers are identified according to area of residence.
Occupation Wise- Customers are differentiated on the basis of their occupation.
Product Wise- Customers are differentiated on the basis of their use of our products
in which further differentiation is done in each segment.
Location Wise Segmentation:
 Rural Customers
 Semi-Urban Customers
 Urban Customers
Occupation Wise Segmentation:
 Farmer
 Taxi operator/Transporter
 Trader Shop-Keeper/Businessman
 Owner cum Driver
 Fleet operators
 Professionals (Doctors, CA, Teachers)
 Salaried individuals
 Trusts/Schools
 Contractors
DVHIMSRPage 24
 Organized/Fixed tours and travels
 High net worth individuals/investors (with ID proof only)
 Ex-Service army persons
 Traditional occupations (Tailor, Blacksmith, Cobbler, Goldsmith, Barber, etc)
 NRI (with local hirer/guarantor)
Product Wise Segmentation:
1. Auto Service: This segmentation includes personal and proper segment. Personal
segment caters customers like Agriculturists, Businessman, Taxi operators;
Personal Segment is used for both personal and commercial use. Proper segment
caters both commercial and include Daily earn and pay, Businessmen,
Transporters, Agriculturist.
2. LMV: This segment include cars other that Mahindra segment. These are used in
personal and commercial purpose which includes customers like Government
Employee, Salaries Employee, Businessman, and Agriculturist for personal use
and in commercial taxi operators use LMV product.
3. Refinance, Top up: This segment caters users who want top up for their existing
cars or who want to buy second hand car. They cover all customer segments
mentioned above. This segment is very crucial as it is helpful for existing
customers who are in 2 or more aging but are not able to pay due to some
economical reason. Refinance market is big and it caters all segments so special
need to emphasize on this segment.
Major Income Sources Specific to the Area:
1. Agriculturist: A large proportion of rural customers is agriculturist. They have

income from different crops from different seasons like wheat, rice etc. they have
additional income from dairy farming as well. They also earn from leasing land to
other small farmers. Only problem is their income is seasonal.
2. Govt. Employees: They earn basically from their salaries. They have a stable and
secure job which means permanent source of income. They have additional
income house and properties.
DVHIMSRPage 25
3. Salaried Employees: They earn and live on salaries of daily base. They earn from
daily wages earned from labour work and from TAXI (Y/B) financed by MMFSL.
4. Taxi Drivers: They earn from their business of taxi hiring. They have fleets or
they drive own. They either work independently or with companies like OLA.
They have additional income from side business like shops and from lease of
property.
Customer Spending Pattern Location Wise (Existing Customer)
Customer spending mainly depends upon income source and area of residence and
nature of occupation. We will discuss according to the customer segmented on the
basis of occupation.
Businessman mainly spends on:
 On their own business such as raw materials etc.
 On expenditure of family and entertainment like movie, family tour.
 During festive season.
 Future planning in form of investing in mutual funds, buying properties or in

LIC etc.
 During wedding in family.
 Expenditures due to some emergency like mis-happening (accidental) or

someone getting ill in family.
 Giving salary to people working under.
Various sources of Customers:
1. Dealers: Dealers are main sources of providing customers to MMFSL. We have

Dealer point executive to cater the leads. We have to ensure strong relationship
with dealer and consider them as internal customer then only we can strong
relationship with them.
2. Employees: Employees themselves are source of customers. Employees who are

either working for too long with MMFSL or just joined MMFSL have relationship
with customers who show faith on employees rather that company. We should
DVHIMSRPage 26
encourage and promote employees to bring more and more such customers.
Employees include both business executive and collection executives.
3. Direct Marketing: DMT‘s are appointed to carry out direct marketing initiatives
which they carry out by carrying promotional activities in various areas with or
without of dealers. They provide these leads to related executives.
4. Advertisement: Customers are attracted by advertising through various channels

such as handlings, banners, pamphlets etc.
5. DSA: Direct Sales Agencies are source of customers related to refinance. They
provide us customers who need finance on purchase of used cars and one need
good relations to tap maximum refinance business.
6. Existing Customer Database: ETR customers who have good track record with
company are themselves good source of customers. Also they have references
which are also good source of customers.
7. Walking Customers (customer enquiry): These are customers who require loans
and used to come their own in company to avail them.
Ways to identify good customers:
It‘s very important for us to identify good customers as it is a way to secure our loan
given to them. It is another way of minimizing the risk for money lending which is
out strength. Banks work on a framework in which a customer fits only then they give
loans while we give loans on judgment of our executives only.
Following are the ways of identifying good customers:
1. CIBIL: It is a best way to identify whether a customer is good or not as it shows

previous behavior towards repayment of loans. However, CIBIL should not be
only source to judge and other factors are included to judge customer as some
times CIBIL does not clear the story and sometimes past of customer is not good.
2. ITR: Income Tax Return which shows the income source and quantity amount of
income including investments and earnings.
3. Banking Investigation: It includes bank statements which clears scenario on debits

and credits of customers which shows strengths of repayment of loan given to
them.
DVHIMSRPage 27
4. Field investigation: It is most important tool for us as there is interaction with

customer which includes knowing customer, living standard, intention, use of the
vehicle, paying capacity.
5. Reference Check: We check references around area of customers which can be

done with neighbors or our existing customer living that area. We check reference
to find out social standard and to find things whether customer is hiding anything
or not.
6. Employment Status: Employment status in which we see whether he is a

businessman or salaried employee.
7. ETR Customer: Best way to identify is our existing customer database those have
excellent track record.
 Not a single check bounce, on first presentment.
 In last 12months if any check is bounced is has been repaid in full (during the
12months) along with AFC and penal charges within the stipulated 5days from
the date of cheque bounce. This will have a copy of the customer ledger, as
proof of clearance on record in the file.
 All PDD‘s are complete.
 A customer who has successfully closed his contract within last one year
without any default.
 Did not have more than 2 bounced cheques during the entire tenure of the
contract. The 2 bounced cheques should have been cleared on 2nd presentment
within the 5days of re-presentment.
MAJOR MILESTONES OF MAHINDRA FINANCE:
 1993 - Commenced financing of Mahindra and Mahindra Utility Vehicles

1995 - Opened our first branch outside Mumbai, at Jaipur
 1996 - Commenced financing M&M dealers for purchase of tractors 1998 -

Launched a pilot project for retail tractor financing
DVHIMSRPage 28
 1999 - Commenced tractor retail financing in rural and semi-urban areas 2001
- Total Assets crossed the 10 billion mark
 2002 - Commenced financing of non-Mahindra & Mahindra vehicles;

Received Tier II debt from International Finance Corporation; Made our first
securitization transaction of Rs 438.8Million
 2004 - Opened a branch in Port Blair; Received a long-term credit rating of

AA+/Stable; Commenced Insurance Broking through our subsidiary MIBL;
Securitization of tractor assets of Rs.256.6 million; Listing of non convertible
debentures on BSE on the wholesale debt market segment
 2005 - Tied up with HPCL Made Mahindra Insurance Brokers Ltd our wholly
owned subsidiary 2006 - Issued our IPO; Tied up with MarutiUdyog
 2007 - Reach extended to over 400 branches
 2008 - Commenced the home loan business through our subsidiary, Mahindra
Rural Housing Finance Limited (MRHFL)
 2009 - Recommenced Fixed Deposit programme; Received 12.5% equity

participation from NHB for our Subsidiary Mahindra Rural Housing Finance
 2010 - Loan against Gold launched in Kerala; Assets Under Management

crosses Rs. 10000 crores; PBT crosses Rs. 500 crores; Branch network crosses
550 branches; More than 2 lakh new customer contracts in a financial year for
the first time
 2011 - Crossed the benchmark of Rs. 100 billion in Total Assets; Maiden QIP
Issue; Joint Venture with Rabobank subsidiary for tractor financing in USA
and ventured into SME financing
 2011 - Joint Venture with Rabobank subsidiary for tractor financing in USA
2013 - Winner of the prestigious Golden Peacock Award for Excellence in
Corporate Governance. 2014 - Mahindra Finance wins ABP Award for Most
Admired Company in Financial Service Sector
DVHIMSRPage 29
Chart No :2.2
ORGANIZATION STRUCTURE
DVHIMSRPage 30
Figure No: 2.1 Board of Directors
Mr. Dhananjay Mungale Mr. Ramesh lyer Mrs. Rama Bijapurkar

(Director) Managing Director (Independent Director)
DVHIMSRPage 31
Mr, C B Bhave Mr. S Parthasarathy Mr . Ravi

(Independent Director) Director Financial Officer Executive Director
&Chief
Mr. Milind Sarwate

Mr. Anish Shah
Director .
Independent Director
DVHIMSRPage 32
SWOT ANALYSIS
Strengths:
 Strong financials
 More than 9.5 lakh customers across India
 Extensive expertise in asset valuation
 Strong ability of raising resources from multiple sources
 The largest asset financing NBFC in India
 The only player in the organised sector to offer pre-owned commercial

vehicle financing.
Weakness
 Lack of Marketing
 Unskilled Execute Employees.
 Business segment heavily dependent on economic activity.
 The Company‘s business and its growth are directly linked to the GDP growth
of the country. Any slowdown in GDP growth may have a negative impact on
the business
Opportunities
 Passenger commercial vehicle financing
 Second hand tractor financing
 Tap more customers through partnership with private Financiers
 Truck Bazaar to enable tapping the customers at the entry point
 Freight challan discounting, working capital loans, tyre loans, etc.
Threats
 Threat of Entrants.
 Competitors.
DVHIMSRPage 33
 Maintaining relationships and asset quality, while achieving scalability.
Figure No: 2.2 Major Players in NBFC’s
Aditya Birla Bajaj financial services Mahindra and

capital Mahindra
Financial Services
HDB financial
Shriram financial
services
services Tata capital
Cholamandalam
Muthoot L&T finance finance
Finance ltd
DVHIMSRPage 34
THEORETICAL BACKGROUND
Market potential: Definition:
The estimated maximum total sales revenue of all suppliers and the
consumers of a product in a market during a certain period A market can be analyzed to
estimate its potential for a certain product. Market potential analysis is a strategic tool to
identify market opportunities and invest resources where they will have the greatest return
in the long run. Market potential analysis is not used for short-term forecasting, but can
help to target markets with high growth potential in the future. Market potential analysis
enables companies to:
 Categorize countries as lead markets, break-out markets or emerging

markets.
 Quantify market potential for a given product by country, region or

globally, now and in the future.
 Identify growth drivers and barriers in those markets.
 Understand how to exploit growth markets by tailoring marketing,

product development and production strategies to meet customer
demands and overcome market barriers.
MARKET POTENTIAL INFLUENCERS
Many forces influence market potential, but there are two broad sets of factors
that are the key:
 Demand drivers for IT
 Utility of product
 Demand Drivers
 Size and Wealth
 Market potential
 Supporting Infrastructure
 Demand Inhibitors
DVHIMSRPage 35
Demand Drivers
Demand drivers are the factors that affect the size, readiness or Exploitability of
markets.
Three are especially important.
 The first is the size and wealth of a market. This determines the number
of households, companies, government agencies and other organizations
that can actually afford to buy a product. This is not a simple calculation,
and average figures such as total population and GDP per capita offer
only a starting point. Other factors include household income distribution
and the structure of the business sector. Much of the value of market
potential analysis comes in calculating accurately the number of potential
customers there are for a given product.
 The second is the utility of a product in a particular market. This varies

according to the nature of the product and the characteristics of the
market. For instance, if you are selling an English-only online service, the
number of people who speak English in a given market will determine the
value of the service. Similarly, if you are selling PCs for small
businesses, the value of the systems will depend on how easily they can
be networked and communicate internally.
 The third demand driver is the supporting infrastructure for a product.

Frozen foods require refrigerators, and refrigerators require electricity, so
the demand for frozen foods is dependent on the presence of reliable,
affordable electrical power. For information and communication
products, the necessary infrastructure can include telephone lines, satellite
uplinks, and human resources such as skilled programmers, technicians
and users. The quality of infrastructure generally corresponds to national
wealth, but there are significant differences among countries at similar
levels of wealth.
DVHIMSRPage 36
Demand Inhibitors
Market potential in a given country can appear to be high, but actual demand
remains low. This is usually due to the presence of demand inhibitors that either
raise the cost or lower the utility of a product. An obvious example is a tax or
tariff, which increases the price to final customers. Quotas and other trade
barriers have the same effect. Some inhibitors such as tariffs are explicit and can
be quantified, while others are less visible and can only be identified through in-
depth knowledge of a country. For example, the business model of companies,
management culture, and labor environment (e.g., lifetime employment, strong
unions) can inhibit demand.
Steps in Market Potential Analysis

The Steps in market potential analysis begins by employing a top-down model
driven by a country‘s wealth to measure market potential size. In doing so, we
use an extensive database of international and national statistics. Then, we look at
market penetration in a large number of countries to understand historical trends
and identify which countries are leaders and laggards in adopting new
technologies. This approach enabled us to identify Japan as a break-out market
for personal computers in 1992, three years before the boom in PC sales that
began there in 1995. Next, we break down national markets by segment into
household, business, government and education markets. Each of these markets
has its own growth drivers and must be analyzed according to a different set of
criteria. International strategy must take into account not just what countries have
the greatest potential, but what market segments within each country. Finally, we
integrate the results of these previous 7 steps with qualitative understanding of
individual countries to provide an interpretative portrait of market potential.
Thus a full analysis of market potential involves four steps:

1. Top down estimation of market potential size
2. Elaboration of market types
3. Analysis of market segments
4. Integration and interpretation
DVHIMSRPage 37
Importance of the potential analysis:

The Potential Analysis in marketing pioneering as a goal- and future-oriented
talent management. Talent Management characterizes the acquisition,
development and long-term retention of customers. Due to the future
demographic change the ―war for talentsǁ, which is searching and retaining
future talents/customers and executives will be intensified. Furthermore
employers have to offer certain attractively. Nowadays transparent marketing
paths and conveying processes are more important. Talents or ―High potentialsǁ
need to have a professional perspective, otherwise they will leave the company
they are working for or even the country. Every year a high number of well-
educated persons leave their home country. This knowledge-migration needs to
be avoided and thus the potential analysis becomes even more important. Talents
need to be acquired, their skills must be developed and in the end talents should
be retained in companies.
Market Analysis
The goal of a market analysis is to determine the attractiveness of a market and
to understand its evolving opportunities and threats as they relate to the strengths
and weaknesses of the firm. David A. Aaker outlined the following dimensions of
a market analysis:
 Market size (current and future)
 Market growth rate
 Market profitability
 Industry cost structure
 Distribution channels
 Market trends
 Key success factors
DVHIMSRPage 38
Market Size
The size of the market can be evaluated based on present sales and on
potential sales if the use of the product were expanded. The following are some
information sources for determining market size:
 Government data
 Trade associations
 Financial data from major players
 Customer surveys
Market Growth Rate

A simple means of forecasting the market growth rate is to extrapolate historical
data into the future. While this method may provide a first-order estimate, it does
not predict important turning points. A better method is to study growth drivers
such as demographic information and sales growth in complementary products.
Such drivers serve as leading indicators that are more accurate than simply
extrapolating historical data.
Important inflection points in the market growth rate sometimes can be predicted
by constructing a product diffusion curve. The shape of the curve can be
estimated by studying the characteristics of the adoption rate of a similar product
in the past. Ultimately, the maturity and decline stages of the product life cycle
will be reached. Some leading indicators of the decline phase include price
pressure caused by competition, a decrease in brand loyalty, the emergence of
substitute products, market saturation, and the lack of growth drivers.
Market Profitability
While different firms in a market will have different levels of profitability, the
average profit potential for a market can be used as a guideline for knowing how
difficult it is to make money in the market. Michael Porter devised a useful
framework for evaluating the attractiveness of an industry or market.
DVHIMSRPage 39
Porter's five forces, identifies five factors that influence the

market profitability:
 Buyer power
 Supplier power
 Barriers to entry
 Threat of substitute products
 Rivalry among firms in the industry
Industry Cost Structure

The cost structure is important for identifying key factors for success. To this
end, Porter's value chain model is useful for determining where value is added
and for isolating the costs.
The cost structure also is helpful for formulating strategies to develop a
competitive advantage. For example, in some environments the experience curve
effect can be used to develop a cost advantage over competitors.
Distribution Channels
The following aspects of the distribution system are useful in a market analysis:
 Existing distribution channels - can be described by how direct they are to
the customer.
 Trends and emerging channels - new channels can offer the opportunity
to develop a competitive advantage.
 Channel power structure - for example, in the case of a product having

little brand equity, retailers have negotiating power over manufacturers
and can capture more margins.
DVHIMSRPage 40
Market Trends
Changes in the market are important because they often are the source of new
opportunities and threats. The relevant trends are industry-dependent, but some
examples include changes in price sensitivity, demand for variety, and level of
emphasis on service and support. Regional trends also may be relevant.
Key Success Factors
The key success factors are those elements that are necessary in order for the
firm to achieve its marketing objectives. A few examples of such factors include:
 Access to essential unique resources
 Ability to achieve economies of scale
 Access to distribution channels
 Technological progress
 It is important to consider that key success factors may change over time,
especially as the product progresses through its life cycle.
Market Potential and Market Sizing Analysis

Market analysis services from Mapping Analytics help you know the economic
opportunity available to you in any geographic market. Whether you sell to
consumers, to businesses, or both, market sizing provides intelligence you need
to deploy sales and marketing resources effectively.
Benefits of Market Potential Analysis
 Understand market potential for a single store, network of stores or a new
market
 Deploy resources effectively by ranking markets in priority order
 Forecast total opportunity in terms of number of customers and revenue

potential
 Estimate your market share
DVHIMSRPage 41
Field investigation process and approval:-
The MMFSL executive will conduct field investigation with in 24hours. They collect
basic documents KYC, age and income proof, copy of RC book and insurance and
they submit all documents to ABM. Depending on the quantum of amount the
approval is done by different authority at different levels of hierarchy.
MF Sutradhaar:-
MF sutradhaar is a recent initiative project of MMFSL. MF sutradhaar is nothing but

affiliate marketing. Affiliate marketing is a tool in digital marketing mostly used by e-
commerce business. Mahindra Finance took bold decision to bring that big online
platform to offline. Affiliate marketing is also known as referral marketing or
commission marketing or bounty marketing.
Affiliate marketing is a potential strategy of e-commerce and internet marketing. In
affiliate marketing the responsibility of sales is shifted to the third party in particular
on clients who are rewarded commission after convincing other clients to purchase
products offered by sponsor
DVHIMSRPage 42
Three parties are involved in affiliate marketing they are

1. Sponsor: It is a firm selling any product or service. It is also called as Merchant.
2. Affiliate: It is a person or company who promotes the product of the Merchant
3. Customer:- She/he is a third entity in the service chain.
SPONSOR AFFILIATE
CUSTOMER
Chart No: 3.1 Relationship in affiliate marketing
The key success of affiliate marketing depends on win-win relationship among all three
parties. Affiliate marketing industry is set to grow $6.5 million over next five years.
Amazon has the largest affiliate marketing industry. one-fourth of total sales comes from
affiliates. Here in MMFSL, Mahindra finance is a merchant, Affiliate are the existing
good track record customers who pay all their installments on time and loyal to MMFSL.
These MMFSL affiliates are known as Sutradhaars. These Sutradhaars promote the
product of MMFSL and bring new customers to MMFSL. To bring win-win relationship
affiliates are rewarded with incentives and also interest rate deduction for them for their
next loan. Excellent services are provided to new customers.
DVHIMSRPage 43
Benefits of MF sutradhaar:-
 Getting new customers with very low cost in extremely competitive market
 Saving time and effort of executives since sales are done by MF sutradhaars.
 Existing customers are recognized and they are retained. Since retention is
very difficult in this competitive environment.
 Existing customers are encouraged for refinance facilities.
 Cost reduction to company in various aspects. It saves cost spend in
advertising, promoting and selling MF services and products.
Scope of MF Sutradhaar
Bringing the digital platform followed by e-commerce industry to a Non-banking

financial company serving in rural and semi urban areas totally from online to offline
leads to many risk involved in it. This pays way to the problem whether MF
Sutradhaar helps in enhancing business opportunities for MMFSL. Analyzing it will
help to reduce the risk.
DVHIMSRPage 44
RESEARCH DESIGN
Research Design:-
Research design is the framework for conducting the marketing research. It specifies
the details of the procedures necessary for obtaining the information needed to solve
the marketing research problem. The research design formulated here is longitudinal
descriptive research. The information required for conducting this marketing research
are customers frequency of reference before and after becoming Sutradhaar, their
satisfaction level on service, commission amount and interest rate deduction then their
interest for refinance and being an effective affiliate.
Method of data collection:-

For quantitative research the preferred way of collecting data is Survey method. Here
structured questionnaire given to a sample of a population and designed to elicit
specific information from respondents. The questionnaire used for survey method is
attached to the appendix. Here Traditional telephonic interviewing and personal
interviewing in customer home and Mahindra office is preferred.
Objectives of study
1. To understand the market potential of MFS.
2. To know the customer preference while availing the loan.
3. To understand the level of awareness about Sutradhaar.
Source of data:-
The source of data for conducting this marketing research is Primary data. These data
are real time data which are collected specifically for undergoing this marketing research
problem. These data are collected from Mahindra finance existing good track record
customers of Chennai circle.
Title of the project:-

“A Study on Market Potential of Mahindra Finance Sutradhaar at
Mahindra Financial services Limited, Bangalore”.
DVHIMSRPage 45
Scope of the study:

This study connected to customers of Bangalore and the study covers the people of
all classes. Hence the Professions, Businessmen, Government employees etc. were
connected in their free time and interviewed to know their preferences among MFS.
LIMITATION OF THE STUDY:
1. The prime limitation of the study is that the study was conducted for a short
duration of two months which is not an ideal time to conduct this study.
2. The Study is interpreted based on the responses being obtained during the
course of the study.
DVHIMSRPage 46
LITERATURE REVIEW
 The great economist, novel prize winner, Professor of Harvard University, Dr,
Amartya Sen refers the de monetization as “Despotic act”
 The ex governor of RBI Mr. Raghuram Rajan Emphasized on tracking the
data and tax administration rather than stripping the currency.
 The great economist, novel prize winner, Professor of harwad university Dr,
Amartya Sen refers The demonetization As “ Despotic act”
 The ex governor of RBI Mr. Raghuram Ranjan emphasized on tracking the
data and tax administration rather than stripping the currency.
 Paul Krugman- Nobel Price winning, Economist -2008
“India’s decision to drain out high-value banknotes from the economy, and the
move might only force the corrupt to become more careful in the future”
 Mr. Arvind Paingrahyi, the Vice Chairperson Of NITI ( national institution of
transforming India)
 Ayog Supports the step by saying it would help the economic growth of the
India in long term perspective.
 Angelmar, R. (1990). Product innovation: a tool for competitive advantage.
European Journal of Operations
 Aschhoff, B. & Schmidt, T. (2008). Empirical evidence on the success of R&D
co-operation – happy together? Discussion paper no. 06-059 Centre for
European Economic Research
 Atuahene-Gima, K. (1996). Market orientation and innovation. Journal of
Business Research.
 Caves, R.E. & Porter, M.E. (1977). From entry barriers to mobility
barriers: conjectural decisions and contrived deterrence to new competition.
The Quarterly Journal of Economics. Vol. 91, no. 2, pp. 241-262
 Chang, H., Koski, H. & Majumdar, S.K. (2003). Regulation and
investment behaviour in the telecommunications sector: policies and
patterns in US and Europe. Telecommunications Policy. Vol. 27, no. 10-11, pp.
677-699.
 Cook, K., Shortell, S.M, Conrad, D.A. & Morrisey, M.A. (1983). A theory
of organizational response to regulation: the case of hospitals. The Academy of
Management Review. Vol. 8, no. 2, pp. 193-205
DVHIMSRPage 47
 Cooper, R.G. & Edgett, S.J. (2008). Maximizing productivity in product

innovation. Research-Technology
 Cooper, R.G. & Kleinschmidt, E.J. (2000). New product performance: what
distinguishes the star products?
 Cooper, R.G. & Kleinschmidt, E.J. (2007). What makes a new product a
winner: Success factors at project level. R&D Management. Vol. 17, no. 3, pp.
175-189
 Cooper, R.G. (1994). New products: the factors that drive success.
International Marketing Review. Vol. 11, no. 1, pp. 60-76
 Cooper, R.G. (2008). The stage gate idea to launch process update, what’s
new and nexgen systems.
 Journal of Product Innovation Management. Vol. 25, no. 3, pp. 213-232
 De Brentani, U. (2001). Innovative versus incremental new business services:
different keys for achieving success. Journal of Product Innovation
Management. Vol. 18, pp. 169-187
 Deszca, G., Munro, H. & Noori, H. (1999). Developing breakthrough
products: challenges and options for market assessment. Journal of Operations
Management. Vol. 17, pp. 613-630
 Eisenhardt, K.M. (1989). Building theories from case study research. Academy
of Management Review. Vol.
 Ernst, H. (2002). Success factors of new product development: a review
of the empirical literature. International Journal of Management Review. Vol.
4, no. 1. pp. 1-40
 Garcia, R. & Calantone, R. (2002). A critical look at technological typology and
innovativeness terminology: a literature review. Journal of Product Innovation
Management. Vol. 19, pp 110-132
DVHIMSRPage 48
DATA ANALYSIS AND INTERPRETATION
1. According to you which investment option has less risk?
Table No. 5.1: Represents about the investment option
No of respondents In percentage
Mutual funds 8 16
Fixed deposit 23 46
Post office deposit 10 20
Real estate 3 6
Share market 6 12
Total 50 100
Graph No. 5.1: Represents about the investment option
50 46
45
40
35
30
25
20
20 16
15 12
10 6
5
0
Mutual funds Fixed deposit Post office Real estate Share market
deposit
Source: Primary data
INTERPRETATION:
From the above graph it can be interpreted that 16% of the respondents are
think that invest in mutual fund is less risk, 46% of the respondents are think
that invest in Fixed Deposit, 20% of respondents are think that invest in Post
office deposit, 6% of the respondents are think that invest in Real estate and
12% of the respondents are think that invest in Share market is less riskier.
DVHIMSRPage 49
2 Which of the following products you use?
Table No.5.2: Represents about the products
Particulars No of respondents In percentage

Fixed deposit 9 18
Mutual funds 8 16
Insurance 12 24
Loans 21 42
Total 50 100
Graph No: 5.2 Representation about the products
45
42
40
35
30
25 24
20 18
16
15
10
5
0
Fixed deposit Mutual funds Insurance Loans
INTERPRETATION:
From the above graph, it can be interpreted that, 18% of the respondents
considered fixed deposit, 16% of the respondents consider mutual fund, 24%
of the respondents consider Insurance while 42% of the respondents consider
loans for their investments.
DVHIMSRPage 50
3 What do you look in any financial services?
Table No: 5.3 Represents about Financial services.
Particulars YES NO
Variety 33 17
Brand Name 28 22
Promptness 31 19
Quality 32 18
Features 26 24
Customer advice 34 16
Rendering arrangements
22 28
Graph No.5.3: Represents about Financial services
40
35 33 34
31 32
30 28 28
26
25 24
22 22
20 19 18
17 16
15 yes
10 no
5
0
e
ss
ty
es
ts
ty
vic
en
ne
ali
ur
rie
Na
ad
Qu
em
at
pt
Va
Fe
d
om
er
ng
an
om
Pr
rra
Br
st
ga
Cu
in
er
nd
Source: Primary date

Re
DVHIMSRPage 51
INTERPRETATION
From the above graph, it can be Interpreted that 33% of the respondents are
positive on variants in the financial service products 17% do not consider any
varieties in financial service products.
28 % of the respondents consider Brand Name while 22% respondents said

that they would not consider brand name while availing the financial service
products.
31% of the respondents said that they would consider the financial service
company to be prompt in delivering the service while 19% respondents said
that the financial service firm need not be prompt in delivering service.
32% of the respondents would consider the quality of the financial services
products to be important factor while others didn’t agree with the same.
26% of the respondents would consider the features attributed to the financial
products while 24% respondents would not have the features considered.
34% of the respondents would consider the other customers advice before
taking the products while 16% would not consider such advices.
22% of the respondents would consider rendering arrangements by the

financial services company while 28% of the respondents would not consider
the same.
DVHIMSRPage 52
4 Have you taken loan from any other sources?
Table No: 5.4 Represent about loan from other sources.

Particulars No of Respondents In percentage
YES 32 64
NO 18 36
Total 50 100
Graph No: 5.4 Represent about loan from other sources.
70
64
60
50
40 36
30
20
10
0
yes no
INTERPRETATION
agreed that they are taking loan from other sources while 36% of the
respondents said that they are not taking loan from other sources.
DVHIMSRPage 53
5 What factors do you consider before taking a loan?
Table No: 5.5 Represent about loan from other sources

Interest rate 16 32
Duration of the loan 12 24
Terms and condition 8 16
Any other 14 28
Total 50 100
Graph No: 5.5 Represent about loan from other sources
35
32
30 28
25 24
20
16
15
10
0
Interest rate Duration of the Terms and Any other
loan condition
INTERPRETATION
From the above graph, it can be interpreted that 32% of the respondents
consider the interest rate, 24% of the respondents consider the Duration of the
loan, and 16% of the respondents consider the terms and condition of loans
from other sources while remaining 28% of the respondents consider other
factors.
DVHIMSRPage 54
6 Did you know about MFS before your first subscription?
Table No:5. 6 Represent about MFS before first subscription.

Yes 28 56
No 22 44
Total 50 100
Graph No: 5.6 Represent about MFS before first subscription
60
56
50
44
40
30
20
10
0
Yes No
INTERPRETATION
From the above graph, it can be interpreted that 56% of the respondents are first time
subscribers of the product while 44% of the respondents said that they did not knew
about the product before subscription
DVHIMSRPage 55
7 How long have you been a customer of MFS?

Table No: 5.7 Representation of the tenure of being associated with MFS
Below 1 months. 7 14
2 to 3 months. 14 28
4 to 5 months 20 40
6 and above 9 18
Total 50 100
Graph No.5.7: Representation of the tenure of being associated with MFS
45
40
40
35
30 28
25
20 18
15 14
10
0
Below 1 year. 2 to 3 year. 4 to 5 year 6 and above
INTERPRETATION
From the above graph, it can be interpreted that 14% of the respondents are
below 1 year, 28% of the respondents are 2 to 3 year, 40% of the respondents
are 4 to 5 year, 18% of the respondents are 6 and above.
DVHIMSRPage 56
8 How responsive have MFS been to your questions or concerns about the
subscription of loans?
Table No.5.8: Representation on queries or concerns related to the subscription of
loans

Very Poor Response 8 16
Poor response 9 18
Rarely responsive 9 18
Usually responsive 13 26
Very responsive 11 22
Total 50 100
Graph No.5.8: Representation on queries or concerns related to the subscription of

loans
Questions or concerns about the subscription of loans
30
26
25
22
20 18 18
16
15
10
0
Very Poor Poor response Rarely Usually Very responsive
Response responsive responsive
INTERPRETATION
From the above graph, it can be interpreted that 16 % of the respondents are
Very Poor response, 18% of the respondents are poor response, 18% of the
respondents are rarely responsive, 26% of the respondents are usually
responsive while 22% of the respondents said that they are very responsive
people when asked about the way the queries and concerns are handled at
MFS.
DVHIMSRPage 57
9 Rate MFS on the following aspects?
Table No5.9: Representing the ratings on MFS aspect
Very Good Good Average Poor Very Poor

Customer service 7 15 20 5 3
Products 8 12 19 11 0
Add on service 8 15 17 8 2
Interest provided 11 14 15 6 4
Grievances
Handling 7 13 18 8 4
Variety in
Financial products 13 17 11 6 3
Ease of process 8 15 17 7 3
Product
Knowledge 14 10 16 8 2
Graph No 5.9: Representing the ratings on MFS aspect
Ratings on MFS
25
20 19
20 18
17 17 17 16
15 15 1415 15 14
15 13 13
12 11 11 11 10
10 8 8 8 8 8 8
7 6 7 6 7
5 4 4
5 3 3 3
2 2
0
ice
ts
ice
ed
ge
ct
es
lin
uc
d
id
rv
rv
du
c
nd
le
od
ro
ov
se
se
ro
w
Ha
p
Pr
pr
no
er
on
lp
of
Very Good Good Average Poor Very Poor

es
st
om
tK
cia
d
se
re
nc
Ad
uc
an
st
Ea
te
va
Cu
od
Fin
In
ie
Pr
Gr
in
ty

rie
Va
INTERPRETATION
From the above graph, it can be interpreted that 20 of the respondents have
given average ratings to the customer service 12 of the respondents have
given good for products 17 of them have given average to the add on services
14 of them have given good to interest and 17 of them in ease in handling
DVHIMSRPage 58
10 Why did you choose Sutradhaar /MFS?
Table No.5.10: Representing the reasons for choosing Sutraadhar

Its trustful 9 18
Low interest rate 13 26
Easy installments 12 24
Process is user friendly 9 18
Other reasons 7 14
Total 50 100
Graph No.5.10: Representing the reasons for choosing Sutradhar
30
26
25 24
20 18 18
15 14
10
0
Its trustful Low interest Easy Process is user Other reasons
rate instalments friendly
INTERPRETATION
From the above graph, it can be Interpreted that 18% of the respondents
consider Sutraadhar as its trustful, 26% of the respondents considered
because of low interest rate, 24% of the respondents considered due to easy
DVHIMSRPage 59
installments, 18% of the respondents considered it as it is user friendly process

while 14% of the respondents considered for other reasons.
DVHIMSRPage 60
11 How do you got to know about Sutradhaar/MFS?

Table No.5.11: Representing the source of awareness of Sutraadhar among
respondents

Advertisements 6 12
Sales person 23 46
Family and friends 6 12
Others, 15 30
Total 50 100
Graph No: 5.11 Representing the source of awareness of sutraadhar among

respondents
50
46
45
40
35
30
30
25
20
15 12 12
10
5
0
Advertisements Sales person Family and friends Others,
INTERPRETATION
From the above graph, it can be Interpreted that 12% of the respondents know about
sutradhaar though advertisements, 46% of the respondents know about sutradhaar
though sales person, 12% of the respondents know about sutradhaar though family
and friends, 30% of the respondents know about sutradhaar though other persons.
DVHIMSRPage 61
12 What is your first reaction about “Mahindra finance sutradhaar” (MFS’s)

services?
Table No.5.12: Representation on first reaction about MFS among respondents

Very positive 13 26
Positive 23 46
Neutral 9 18
Negative 3 6
Very negative 2 4
Total 50 100
Graph No.5.12: Representation on first reaction about MFS among respondents
50
46
45
40
35
30
26
25
20 18
15
10
6
5 4
0
Very positive Positive Neutral Negative Very negative
INTERPRETATION
From the above graph, it can be interpreted that, 26% of the respondents gave
very positive reaction, 46% of the respondents gave positive reaction, 18% of
the respondents gave neutral opinion, 6% of the respondents gave negative
reaction while 4% of the respondents gave very negative reaction of Mahindra
finance sutraadhar.
DVHIMSRPage 62
13 Are you willing to subscribe other products of MFS?
Table No.5.13: Represent on willing to subscribe other products of MFS

Yes 28 56
No 22 44
Total 50 100
Graph No 5.13: Represent on willing to subscribe other products of MFS
60
56
50
44
40
30
20
10
0
Yes No
INTERPRETATION
would subscribe to other products of MFS while remaining 44% of the
respondents would not subscribe to other products of MFS.
DVHIMSRPage 63
14 To what extent you agree with the following factors about MFS?
Table No.5.14: Represent on factors about MFS
Strongly Agree Neither Agree Disagre Strongly

Agree Nor Disagree e Disagree
Its trustful 17 19 9 3 2
Low interest rate 16 20 9 3 2

Easy installments 13 17 12 5 3
Total 46 56 30 11 7
Percentage
92 112 60 22 14
Graph No.5.14: Represent on willing to subscribe other products of MFS
25
20
20 19
17 17
16
15
13
12
10 9 9
5
5
3 3 3
2 2
0
Strongly Agree Neither Agree Disagree Strongly
Agree Nor Disagree Disagree
Its trustful Low interest rate Easy instalments
INTERPRETATION
From the above graph shows that the among 50 of the respondents 17% of the
respondents are strongly agree that MFS is trustful , 46% of the respondents are think
that invest in Fixed Deposit, 20% of respondents are think that invest in Post office
deposit , 6% of the respondents.
DVHIMSRPage 64
15 Which of the following FD’s are you aware of?

Table No.5.15: Representing respondent’s awareness of FD’s from various
companies
No of respondents In percentage
Mahindra Finance 11 22
Sriram Finance 7 14
Muthoot Finance 4 8
HDFC Ltd 6 12
LIC 14 28
Other 8 16
Total 50 100
Graph No.5.15: Representing respondents awareness of FD’s from various

companies
30 28
25
22
20
16
15 14
12
10 8
0
Mahindra Sriram Muthoot HDFC ltd LIC Other
finance finance finance
INTERPRETATION
From the above graph, it can be Interpreted that ‘FD’, 28% of the respondents
are aware of ‘FD’ by LIC , 22% the respondents are aware of ‘FD’ by
Mahindra finance , 16% of the respondents are aware of ‘FD’ by Others,14%
of the respondents are aware of ‘FD’ by Sriram finance, 4% of the
respondents are aware of ‘FD’ by HDFC ltd, 8%of the respondents are aware
of ‘FD’ by Muthoot finance.
DVHIMSRPage 65
16 How likely are you to buy again from us?
Table No 5.16: Representing the likelihood of respondents to buy again

Not likely at all 8 16
Not likely 8 16
Likely 16 32
Very likely 18 36
Total 50 100
Graph No 5 .16: Representing the likelihood of respondents to buy again
40
36
35
32
30
25
20
16 16
15
10
0
Not likely at all Not likely Likely Very likely
INTERPRETATION
From the above graph, it can be interpreted that, 36% of the respondents are very
likely to buy again, 32% of the respondents are likely to buy again, 16% of the
respondents are not likely to buy again, 16% of the respondents are not likely at all
from buying products / services from Mahindra Finance.
DVHIMSRPage 66
FINDINGS
i. The respondents are having a opinion that the fixed deposit and post office are
considered to be less riskier as compared to other factors as mentioned above.
ii. The loans are most preferable product opted by respondents and hence this
shows the credibility of the company’s growth as compared to other factors
iii. Customer advice is most important in financial service sector as well as
variety of products, promptness and quality of services so as to satisfy the
customers’ needs.
iv. The loans are being provided by various players in the market hence
respondents are quite aware of the players in the market. This reveals the fact
that the customer has high awareness in terms of service provider and products
offered in the market.
v. The buying process changes from customer to customer because of the factors
considered while subscribing the loans/services are varying. It can be found
that the awareness level of Mahindra Financial Services is good and this helps
to know the level of awareness being created by the company in the market is
quite good.
vi. Association of the customers with company shows that the services for the
existing customers is excellent for Sutraadhar which prompts the customers to
renew the services provided by the company and also consider other products
from MFSL.
vii. The service level of the company is quite satisfactory which determines the
level of response in the customer minds and results in exhibiting excellent
performance of the company particularly for Sutraadhar product.
DVHIMSRPage 67
viii. Most of the respondents know are aware about Sutraadhar of MFS
either through the sources such as sales person and others. This is precisely the
reason why there is less advertisement for the creation of awareness level of
the products in the market.
ix. Most of the respondents are having positive response on MFS while very few
of them said that very negative which means the response time of the company
for specific grievances and concerns is excellent which helps the company to
retain its customers.
x. Most of the respondents are aware of LIC and Mahindra finance while few of
them know about the remaining banks.
xi. Most of the respondents have suggested that they would buy again the
products of Mahindra Finance services limited.
xii. Most of the Respondents have rated positively the sutraadhar product of
MMFSL on the factors such as brand name, variants in the products being
offered, quality of the financial products, features provided with the product,
customers advice and rendering arrangements done by the company are inline
with the customer expectations.
xiii. The Most of the respondents have also responded positively on the
product knowledge of the employees of MMFSL and also the ease of process
in getting subscribed to the Sutraadhar, has made the product reach and
acceptance to be high among the respondents.
DVHIMSRPage 68
SUGGESTIONS
1. The company must concentrate on advertisement, and publicity for MFS

service particularly Sutraadhar as the product has obtained good feedback on
terms of various factors so as to increase its awareness level among non users
of services of MMFSL.
2. The product availability is restricted to specific region, the company can now
enhance their region base to TIER II and TIER III cities so that more benefits
could be reaped from this line of products.
3. The Company has to conduct regular customer campaigns so as to enhance the

customer knowledge about future benefit from the product.
4. Quick response to the online customer for MFS or loans so they may fell
happy to switch with Mahindra finance.
5. The Company has to adopt digital marketing mode in order to enhance the
presence and promote the products to the company on larger scale and
increase mass awareness.
6. While including the collection officer in the direct marketing proposition of

MFS would result in effective promotion so that they may directly convince to
the customers as they are in regular contact with the customers.
7. The Company should provide referral bonus to existing line of customers so

that they feel glad to promote MMFSL through word of mouth promotion.
8. The company has to drive more cross selling to the same customer so as to
bind the customer to the company for the long run and should regularly
incentivize the customer by provide better interest rates so that he feels glad to
be associated with MMFSL.
DVHIMSRPage 69
CONCLUSION
MMFSL is one of the oldest and productive companies of India and
considerably has taken India to the worlds with lot range of product being
offered and spread across the globe through its group companies which has
made it one of the fastest growing companies in different sectors.
The Study on Mahindra Finance Sutraadhar has been one of key insights into
the gamuts of services being offered by MMFSL. The Company has to adopt
digital marketing mode in order to enhance the presence and promote the
products to the company on larger scale and increase mass awareness while
including the collection officer in to the MFS services, so they may directly
convince to the customers as they are in regular contact with the customers.
The product availability is restricted to specific region, the company can now
enhance their region base to TIER II and TIER III cities so that more benefits
could be reaped from this line of products.
The Company should provide referral bonus to existing line of customers so

that they feel glad to promote MMFSL through word of mouth promotion. The
company has to drive more cross selling to the same customer so as to bind the
customer to the company for the long run and should regularly incentivize the
customer by provide better interest rates so that he feels glad to be associated
with MMFSL.
DVHIMSRPage 70
BIBLIOGRAPHY
TEXT BOOKS:
1. Marketing Management by Philip Kotler, Keller, Koshy and Jha, 14th Edition,
Pearsons Publication, New Delhi.
2. Naresh K. Malhotra, Satyabhushan Dash, Marketing Research: An Applied
Orientation, 6th Edition, Published by Dorling Kindersley (India) Pvt. Ltd
(licensees of Pearson Education), ISBN: 9788131731819
WEBSITES:
3. http://www.yourarticlelibrary.com/
4. https://books.google.co.in/books
5. http://www.mahindrafinance.com/
BOOKS/MAGAZINE/NEWSPAPER
6. Mahindra financial year prospectus 2018-19
DVHIMSRPage 71
QUESTIONNAIRE
Hello sir /madam,
I’m Akshay Joglekar, studying M.B.A 2nd year in DVH IMSR College Dharwad for
the partial fulfilment of MBA I have taken a topic called “A Study on the Market
Potential of Mahindra Sutradhara project at Mahindra & Mahindra Financal
Service Limited, Bangalore”. I hereby request you to kindly spare a few minutes of
your valuable time in answering the questionnaire. I assure you that, this is used
exclusively for academic purpose only and the information will be kept confidential.
PERSONAL DETAILS
Name:
Occupation:
Mob no:
Age:
Gender:
1. According to you which investment option has less risk
a. Mutual funds
b. Fixed deposit
c. Post office deposit
d. Real estate
e. Share market
2. Which of the following products you use?

a. Fixed deposit
b. Mutual funds
c. Insurance
d. Loans
DVHIMSRPage 72
3. What do you look in any financial services?
Yes No
Variety
Brand Name
Promptness
Quality
Features
Customer advice
Rendering arrangements
4. Have you taken loan from any other sources?

a. Yes
b. No
If yes please mention the name of the company.
5. What factors do you consider before taking a loan?

a. Interest rate
b. Duration of the loan
c. Terms and condition
d. Any other
6. Did you know about MFS before your first subscription?

a. Yes
b. No
7. How long have you been a customer of MFS?

a. Below 1 month.
b. 2 to 3 month.
c. 4 to 5 month.
d. 6 and above
DVHIMSRPage 73
8. How responsive have MFS been to your questions or concerns about the
subscription of loans?
a. Very Poor Response
b. Poor response
c. Rarely responsive
d. Usually responsive
e. Very responsive
9. Rate MFS on the following aspects?
Very Good Good Average Poor Very

Poor
Customer service
Products
Add on service
Interest provided
Grievances
Handling
Variety in Financial
products
Ease of process
Product Knowledge
10. Why did you choose sutradhara/MFS?

a. Its trustful b. Low interest rate
b. Easy instalments d. Process is user friendly
c. Other reasons __________________
DVHIMSRPage 74
11. How do you got to know about sutradhaar/MFS?

a. Advertisements
b. Sales person
c. Family and friends
d. Others,
12. What is your first reaction about “Mahindra finance sutradhaar” (MFS’s)
services?
a. Very positive
b. Positive
c. Neutral
d. Negative
e. Very negative
13. Are you willing to subscribe other products of MFS?

a. Yes
b. No
14. To what extent you agree with the following factors about MFS?
Strongly Agree Neither Disagree Strongly

Agree Agree Nor Disagree
Disagree
Its trustful
Low
interest rate
Easy
instalments
15. Which of the following FD’s are you aware of?

a. Mahindra finance
b. Sriram finance
c. Muthoot finance
d. HDFC ltd
e. LIC
f. Other
DVHIMSRPage 75
16. How likely are you to buy again from us?

a. Not likely at all
b. Not likely
c. Likely
d. Very likely
DVHIMSRPage 76
DVHIMSRPage 77

Industry Profile: Non Banking Financial Companies

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Industry Profile: Non Banking Financial Companies

Uploaded by

Copyright:

Available Formats

A STUDY ON MARKET POTENTIAL OF MFS AT MMFSL BANGLORE

Non-banking financial companies (NBFCs) are fast emerging as an important

As per the RBI Act, a 'non-banking financial company' is defined as:-

I a financial institution which is a company;

The registration process involves submission of an application by the company in the

SIGNIFICANCE OF NBFCs IN INDIA:

Important regulations relating to acceptance of deposits by the NBFCs are

 They are allowed to accept/renew public deposits for a minimum period of 12

 They cannot accept deposits repayable on demand.

 They cannot offer gifts/incentives or any other additional benefit to the

 They should have minimum investment grade credit rating.

 Their deposits are not insured.

 The repayment of deposits by NBFCs is not guaranteed by RBI.

INDUSTRY STRUCTURE OF NBFCS

Types of NBFCs registered with the RBI are:-

 Equipment leasing company: - is any financial institution whose principal

 Hire-purchase Company:- is any financial intermediary whose principal

 Loan company: - means any financial institution whose principal business is

 Investment Company: - is any financial intermediary whose principal

Now, these NBFCs have been reclassified into three categories:-

 Asset Finance Company (AFC)

 Investment Company (IC) and

 Loan Company (LC). Under this classification, 'AFC' is defined as a financial

1) Equipment Leasing Company is a company which carries on as its principal

There are two types of leases

A. Operating lease, and

2) Hire Purchase Finance Company is a company which carries on as its principle

A. Hire purchase Finance Companies.

B. Retails and Wholesale Traders.

C. Bank and Financial Institutions.

3) Housing Finance Company is a company which carries on as its principle

4) Investment Company means any company which carries on as its principle

As compare to open-end investment companies or mutual funds/units trust, these

5) Loan Company is a company which carries on as its principle business, the

7) Chit Fund Company is a company which collects subscriptions from specified

8) Residuary Non-Banking Company is a company which receives deposits under

There are few unhealthy features of the operations of these companies;

i) Negative NOF (Net Owned Fund)

ii) Understatement of their deposit liability

iii) Forfeiture of deposits

iv) Levy of service charges on the depositors

v) Payment of high rates of commission, etc.

No NBFC can commence or carry on business of a financial institution including

RBI Directions to NBFCs:

Reserve Bank of India announced a set of measures to protect the interest of

BANK VERSUS NON-BANKING FINANCIAL COMPANIES:

Definition Banking is acceptance of deposits NBFCs are companies carrying

Scope of business Scope of business of the bank is There is no bar on NBFCs

Major limitation No non banking activity is carried. Cannot provide checking

Foreign Up to 74% is allowed to private Up to 100% is allowed

controlled and generally it is to get a registration as an NBFC

 Compulsory registration for all NBFCs, irrespective of their holding of public

 Minimum entry point net-worth of Rs.2.5 million which was subsequently

 Deposit mobilization linked to net-worth, business activities and credit rating.

 Maintenance of 12.5% of their deposits in liquid assets.

 Further, in order to monitor the financial health and prudential functioning of

The salient features of the Director are stated hereunder:

(a) NBFCs accepting public deposits.

RESENT OVER LOOK OF BANKING SCCTOR.

Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased to

The digital payments revolution will trigger massive changes in the

A) THE MAHINDRA GROUP:

The Mahindra group is an Indian multinational conglomerate holding