A STUDY ON

“CUSTOMER SATISFACTION TOWARDS INVESTING CHITS IN KSFE”

A PROJECT REPORT
Submitted by
HARIPRASAD.E
CM18BR0031
RAMAKRISHNA.K

In the partial fulfillment of the requirement for the award of Bachelor degree in
COMMERCE
COLLEGE OF APPLIED SCIENCE MANJESHWARAM, KUMBLA
OF KANNUR UNIVERSITY
MAY 2021
 ACKNOWLEDGEMENT

In my endeavor to write this project report “A STUDY ON CUSTOMER

SATISFACTION TOWARDS INVESTING CHITS IN KSFE”. I have been fortunate enough
to receive wholehearted support and inspiration from many persons. First of all I am greatly
indebted to our principal PROF. NALINI for guidance and support.

I also indebted to my internal guide MR.RAMAKRISHNA.K , who has provide me all sort of
advice, support and encouragement to complete this project work successfully. I would like to
extend hearty thanks to all teachers, friends and family for encouraging me and for their timely
help. Above all I am thankful to the almighty, god for the successful accomplishment of his project
work.

Place:KUMBLA Name: HARIPRASAD.E

Date: Reg.No:CM18BR0031
BONAFIDE CERTIFICATE

Certified that this project report “A STUDY ON CUSTOMER SATISFACTION TOWARDS

INVESTING CHITS IN KSFE” is the bonafide work of HARIPRASAD.E (Reg.No:
CM18BR0031) who carried out the project work under my supervision

MR.PRADEEP KUMAR CH MR.RAMAKRISHNA.K

HEAD OF DEPARTMENT SUPERVISOR

DEPARTMENT OF COMMERCE DEPARTMENT OF COMMERCE

COLLEGE OF APPLIED SCIENCE COLLEGE OF APPLIED SCIENCE

MANJESHWARAM, KUMBLA MANJESHWARAM, KUMBLA

 DECLARATION

I, HARIPRASAD E here by declare that this project report entitled “A STUDY ON

CUSTOMER SATISFACTION TOWARDS INVESTING CHITS IN KSFE” has been
prepared by me and submitted to Kannur University in partial fulfillment of requirements for the
award of Bachelor of Commerce, and the record of original work done by me under the supervision
of MR.RAMAKRISHNA.K , COLLEGE OF APPLIED SCIENCE MANJESHWARAM,
KUMBLA.

I also declared that this project work has been submitted by me fully or partly for the award of any
Degree Title or Recognition before.

Place: KUMBLA Name: HARIPRASAD.E

Date: Reg.No: CM18BR0031

 CONTENTS

Chapter No. Title Page No.

1. INTRODUCTION 1–4

2. LITERATURE REVIEW 5

3. COMPANY / 6–9
INDUSTRIAL PROFILE
4. DATA ANALYSIS 10 – 21

5. FINDINGS , 22 – 24
SUGGETIONS AND
CONCLUSION
REFERENCE 25

ANNEXTURE 26 – 28
 LIST OF TABLES
Table No. Title Page No.

4.1 Annual Savings 10

4.2 Gender Statistics 11

4.3 Member 12

4.4 Preferring Period 13

4.5 Paying Installment 14

4.6 Chitty Group 15

4.7 Normally bid for the chit 16

4.8 Purpose of chit amount 17

4.9 Security to draw a chit 18

4.10 Advantages of chit fund 19

4.11 Is chit fund profitable 20

4.12 Satisfaction level 21

 LIST OF CHARTS
Chart No. Title Page No.

4.1 Annual savings 10

4.2 Gender statistics 11

4.3 Member 12

4.4 Preferring period 13

4.5 Paying installment 14

4.6 Chitty group 15

4.7 Customer bid 16

4.8 Purpose of chit amount 17

4.9 Type of security 18

4.10 Advantages of chit fund 19

4.11 KSFE is profitable or not 20

4.12 Satisfaction level 21

 CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION
Banks and other financial institutions play an important role in mobilizing the saving of the people
and channelizing the amount so available for investment. In India nationalized banks, private
banks, rural banks, co-operative banks and new generation banks will come under the banking
structure. Non-banking finance companies are another group in this sector. Despite the growth of
a wide range of savings avenues and the widespread network of banks and other financial
institutions, chit scheme still forms an important part in the asset portfolio of many households
and firms in Kerala. With a view to ensure safety, security and better service to the chit subscribers,
the state government established, The Kerala State Financial Enterprises Ltd. (KSFE) in 1969 for
conducting chit business and other financial transactions.

The KSFE Ltd. is fully owned by the government of Kerala. The Company, which started in a
humble manner with a paid up capital of Rs. 2 Lakhs in 1969, has now grown to Rs.300 Lakhs
with a capital structure of 300000 shares of Rs.100/- each fully subscribed by the state government.
Beginning with Chits, the Company has over the years introduced several attractive schemes to
cater to the needs of different classes of people. It mainly mobilizes savings by instruments like
Chits and deposit schemes and channelizes them to acquire house and household durables, motor
vehicles, equipment for self employment and provides finance for augmenting working capital
needs of small traders. KSFE comes under the group of Miscellaneous Non-banking Financial
Intermediaries. KSFE has the unique status of being the only public sector undertaking in India,
which runs Chits and also one of the few profit making companies owned by the Government of
Kerala.

The major objectives pursued by the company on its incorporation are:-

 To start, conduct, promote, operate, manage and carry on the business of Chitties in India
and elsewhere.
 To promote, undertake, organize, conduct, manage and carry on the business of general
and miscellaneous insurance of any kind in India or elsewhere.
 To start, promote, conduct, operate, carry on and manage the business of dealers, agents
and traders under the hire purchase system of articles, vehicles, machinery, materials,
goods and tools of all capital goods and consumer goods and property of all nature and
1
 description for personal, domestic, office, commercial, industrial and community use and
consumption as a business of the company or as agents of the government, state or central
or any body or organization, there-under or of any other company.
 To start, promote, conduct, operate and carry on the business for providing financial
assistance for the construction of new buildings and 96 for repairs, renewals, alterations,
additions or modifications of existing buildings and for self-employment schemes.
 To provide financial assistance to the hirers or others for the purpose of running and
maintaining articles, equipment and other items acquired under Hire Purchase system of
the Company
 To advance money on the security of gold or other valuable securities.

The main schemes of the Company as of now are:

1. Chit scheme
2. Passbook loan
3. New Chitty loan
4. Hire purchase scheme
5. Hire purchase (House modernization scheme)
6. Employment oriented hire purchase scheme
7. Gold loan scheme
8. Trade financing scheme
9. Fixed deposit scheme
10. Sugama deposit scheme
11. New fixed deposit loan scheme
12. New housing finance scheme
13. Reliable customer loan

1.2 SIGNIFICANCE OF THE STUDY

The study of the KSFE chit funds has been undertaken with certain objectives by highlighting
the customer satisfaction, unique features, functions and working as well as statutory regulations
governing of the company.

2
 1.3 OBJECTIVE OF THE STUDY
The board objective of the study was to provide the performance with some new customer
analysis tools so that they could find the accuracy and different for timely decision making this
important to improve their performance and efficiency.

 To obtain a true insight into customer satisfaction.

 To make comparative study of customer attitude in different years.
 To draw the correct picture of the customer in term of liquidity, solvency,
profitability etc.
 To find out the reason for unsatisfactory results.

1.4 RESEARCH PROBLEM

Customer satisfaction towards investing in chits funds in KSFE

1.5 RESEARCH METHODOLOGY

A) PRIMARY DATA
Primary data related to the project was collected from the discussion and interaction with the
customers and senior employees in the organization from administration and finance department

B) SECONDARY DATA

Secondary data was collected from the document, which were in printed forms like annual
report, reference book based on the customer management and through websites

3
1.6 LIMITATION OF THE STUDY

 Limitations of customer interaction

 Comparative study required
 Problems of policy changes
 Personal bias
 Incomparable

4
 CHAPTER 2

LITERATURE REVIEW
2.1 LITERATURE REVIEW

A study on the Working, Achievements and Prospects of Kerala State Financial Enterprises Ltd.
assessed the progress in the working of KSFE Ltd. and examined how far the company has
succeeded in mobilizing the savings and efficiently utilizing it. The study found out the
performance of the company in terms of volume of business achieved appeared good and the
economic and social impact of various schemes of the company have been positive and significant.

Report of the study group to enquire into the Problems Faced by the Kerala State Financial
Enterprises Ltd., focused its attention on the appropriate strategies for improving the Company’s
performance after identifying its strength, weakness, opportunities and threats. The study also
included an analysis of the working of the company and suggested strategies to overcome the
inherent problems

5
 CHAPTER 3

COMPANY / INDUSTRIAL PROFILE

3.1 ABOUT KSFE

3.1.1 KSFE at a glance

The Kerala State Financial Enterprises Limited, popularly known as KSFE,

 Is a Miscellaneous Non-Banking Finance Company,

 Is fully owned by the Government of Kerala.
 Is one of the most profit-making public sector undertaking of the State.
 Formed by the Government of Kerala with the objective of providing an alternative to
the public from the private chit promoters in order to bring in social control over the
chit fund business, so as to save the public from the clutches of unscrupulous fly-by-
night chit fund operators
 Has been registering impressive profits every year, without fail since its inception

KSFE pays to the Government of Kerala crores of rupees every year by way of:

 Guarantee Commission
 Service Charges
 Dividend

3.1.2 Beginning

 KSFE was created by the Government of Kerala on 6th November 1969.

 The paid up capital then was Rs. 2 Lakhs.
 Total number of employees at the start was 45.
 The number of branches KSFE began with was 10.
 The Head Office of KSFE is placed in Thrissur, the hub of chitty business in Kerala.

3.1.3 Scenario

 Paid up Capital is Rs. 100 Crores.

 Total number of employees is 6782.
 The number of branches is 600.
6
  The number of customers is more than 33 Lakhs.
 Our Turn Over as on June 2019 is 40839 Cr.

GSTIN:32AABCT3817A1Z0

3.2 To become a significant player in the financial services sector by

1. Providing a whole range of quality services and products.

2. Adopting technology and benchmark standards in customer service and performance.
3. Spreading our wings beyond the borders of Kerala, on a global level.
4. Retaining the pre-eminent role in Chitty business.
5. Continuing focus on extending resources to the Govt. of Kerala.
6. Sustaining commitment to the weaker sections of society, as the neighbourhood institution
for support, trust and security.

3.3 WHY CHOOSE KSFE

3.3.1 Chitty

Chitty is the main product of KSFE.

It is a unique financial product, which blends the advantages of both investment and advance. It is
a risk free safe haven for the public as KSFE conducts only chitties fully governed by the
provisions of Central Chit Fund Act 1982. The installment per month for chitties range from Rs.
1000 to Rs. 500000 and the usual duration of chitties are 30 months, 40 months, 50 months, 60
months and 100 months.

The total of the periodic subscription, called the chitty amount, will be given out as “prize money”
to the person who bids by allowing for the maximum reduction in the prize money. The maximum
reduction possible is 25% as per the prevailing Chitty Act and if there are more than one subscriber
interested in bidding at 25% reduction, the numbers of the such bidders will be put to a draw.

Thus each subscriber gets an opportunity to receive the prize money once during the tenure of the
chitty. All the promoters have to contribute the periodic subscription till the end of the chitty.

7
Now KSFE opens a new provision for the NRIs to join chitty. KSFE NRI Chitties are specifically
designed for the NRI community. For more information on NRI chitty, please visit
pravasi.ksfe.com

3.3.2 Loans & Advances

Although Chitty is in essence a loan advance scheme, for subscribers whose chitties are not getting
prized and, at the same time they are in need of money, relief has been provided by two loan
schemes built within chitty scheme, viz. Chitty Pass Book Loan and Chitty Loan. KSFE offers
other loans/advance schemes, comparable to those given by banks and other financial institutions,
and the same includes:

 Car Loan
 Chitty Loan
 Consumer/Vehicle Loan
 Gold Loan
 Kanakadhara Loan
 KSFE Haritham Loan Scheme
 KSFE Home Loan
 KSFE Personal Loan
 PASSBOOK Loan
 Sugama (Akshaya) Overdraft Scheme

3.3.3 Deposit Schemes

A wide range of Deposit Schemes are offered by KSFE. List of deposit schemes available are,

 Sugama Security Deposit

 Short Term Deposit
 Deposit in trust Scheme
 Fixed Deposit
 Sugama Deposit Scheme
8
3.3.4 Fee Based Activities of KSFE

There are three fee based services offered by KSFE namely,

 Money Transfer service

 Xpress Money Transfer Service
 Safe Deposit Locker

3.3.5 Securities

Various schemes of KSFE that offers financial assistance such as loans or advances can only be
availed against the security provided by the customer. Security is defined as, “anything, such as
salary recovery undertaking, landed property, deposit receipt etc., that is deposited or pledged as
a guarantee for the fulfillment of an undertaking regarding the repayment of an advance, along
with interest thereon, to be forfeited in case of default.” The various types of securities accepted
by the KSFE for its different schemes are the following:

 Personal Security
 Fixed Deposits of KSFE and Other Bank Deposits
 Short Term Deposits
 LIC Policy
 Bank Guarantee
 Pass Book of Non-prized chitties of KSFE
 National Savings Certificates VIII Issue
 Kissan Vikas Patra
 NRI Deposits
 Property Security

9
CHAPTER 4

DATA ANALYSIS
4.1 ANNUAL SAVINGS

Savings Percentage (%) Count

Up to 10000 45 18
10000 - 25000 17.5 7
25000 - 50000 17.5 7
Above 50000 20 8
Table No. 4.1 source: Questionnaire

Annual Savings
50

45

40

35
PERCENTAGE (%)

30

25

20

15

10

0
upto 10000 10000 - 25000 25000- 50000 above 50000
SAVINGS

Chart No. 4.1 Source: Table No.4.1

10
4.2 GENDER STATISTICS

Gender Percentage Count

Male 52.5 21
Female 47.5 19
Table No. 4.2 Source: Questionnaire

GENDER STATISTICS

47.5
52.5

Male Female

Chart No. 4.2 Source: Table No. 4.2

11
4.3 MEMBERS

Year Percentage (%) Count

1 – 2 years 57.5 23
2 – 3 years 25 10
3 – 5 years 10 4
Above 5 years 7.5 3
Table No. 4.3 Source: Questionnaire

Members

above 5 years

3 - 5 years
Years

2 - 3 years

1 - 2 years

0 10 20 30 40 50 60 70
Percentage (%)

Chart No. 4.3 Source: Table No. 4.3

12
4.4 PREFERING PERIOD

Chit period in month Percentage (%) Count

40 – 60 65 26
60 – 80 22.5 9
80 – 100 10 4
Above 100 2.5 1
Table No. 4.4 Source: Questionnaire

PREFERING PERIOD
70

60

50
Percentage (%)

40

30

20

10

0
40 - 60 60 - 80 80 - 100 above 100
Chit Period

Chart No. 4.4 Source: Table No. 4.4

13
4.5 PAYING INSTALLMENT

Payment Style Percentage (%) Count

Through Agent 45 18
Branch 40 16
Online Payment 15 6
Table No. 4.5 Source: Questionnaire

PAYING INSTALLMENT
50
45
40
35
Percentage(%)

30
25
20
15
10
5
0
Through Agent Branch Online Payment
Payment Style

Chart No. 4.5 Source: Table No. 4.5

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4.6 CHITTY GROUP

Chitty Amount Percentage (%) Count

1 – 2 Lakh 42.5 17
2 – 5 Lakh 27.5 11
5 – 10 Lakh 22.5 9
Above 10 Lakh 7.5 3
Table No. 4.6 Source: Questionnaire

CHITTY GROUP

7.5

22.5
42.5

27.5

1 - 2 lakh 2 - 5 lakh 5 - 10 lakh Above 10 lakh

Chart No. 4.6 Source: Table No. 4.6

15
4.7 NORMALLY BID FOR THE CHIT

Customer Bid Percentage (%) Count

B/w 1st & 10th month 47.5 19
B/w 11th & 20th month 20 8
B/w 21th & 30th month 17.5 7
B/w 30th month onwards 10 4
As need arises 5 2
Table No. 4.7 Source: Questionnaire

CUSTOMER BID
50
45
40
35
Percentage (%)

30
25
20
15
10
5
0
B/w 1st & 10th B/w 11th & 20th B/w 21th & 30th 30th month As need arises
month month month onwards
Bidding Time

Chart No. 4.7 Source: Table No. 4.7

16
4.8 PURPOSE OF CHIT AMOUNT

Purpose Percentage (%) Count

Business Investment 17.5 7
Personal Purpose 82.5 33
Table No. 4.8 Source: Questionnaire

PURPOSE OF CHIT AMOUNT

90

80

70

60
Percentage (%)

50

40

30

20

10

0
Business Investment Personal Purpose
Purpose

Chart No. 4.8 Source: Table No. 4.8

17
4.9 SECURITY TO DRAW A CHIT
Type of Security Percentage (%) Count

Property 25 11

Govt Employee 27.5 10

Gold 20 8

Other 27.5 11

Table No. 4.9 Source: Questionnaire

TYPE OF SECURITY
30

25

20
Percentage (%)

15

10

0
Property Govt employee Gold Other
Security

Chart No. 4.9 Source: Table No. 4.9

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4.10 ADVANTAGES OF CHIT FUND
Advantages Percentage (%) Count

Money is easily & quickly 57.5 23

available
Repayment in easy installments 17.5 7

The profits distributed as 7.5 3

dividend
Interest is low 12.5 5

Easy membership 5 2

Table No. 4.10 Source: Questionnaire

ADVANTAGES OF CHIT FUND

70

60

50
Percentage (%)

40

30

20

10

0
money is easily & repayment in easy the profits interest is low easy membership
quickly available instalment disrtibuted as
dividend
Advantages

Chart No. 4.10 Source: Table No. 4.10

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4.11 IS CHIT FUND PROFITABLE
Is profitable Percentage (%) Count

Yes 82.5 33

No 17.5 7

Table No. 4.11 Source: Questionnaire

KSFE IS PROFITABLE OR NOT

17.5

82.5

Yes No

Chart No. 4.11 Source: Table No. 4.11

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4.12 SATISFACTION LEVEL
Options Percentage (%) Count

Yes 95 38

No 5 2

Table No. 4.12 Source: Questionnaire

SATISFACTION LEVEL

95

Yes No

Chart No. 4.12 Source: Table No. 4.12

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 CHAPTER 5
FINDINGS , SUGGETIONS & CONCLUSION
5.1 FINDINGS
1. Majority of the customers of KSFE among respondents are male.
2. From the study it is found that most of the respondents are saved their incomes in chit funds
and bank.
3. From the study it is found that 57.5 % respondents are the customers of 1 – 2 years, 25 %
respondents are of 2 – 3 years, 10 % respondents are of 3 – 5 years, 7.5 % respondents are
the customers of above 5 years.
4. Majority of the respondents are using chit amount for the purpose of their personal purpose.
5. Majority of the respondents gave security for drawing a chit under KSFE.
6. Majority of the respondents felt that the investment in KSFE are profitable.
7. Majority of the respondents are satisfied in services provided by KSFE.
8. Majority of the respondents are paying instalments through agent.

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5.2 SUGGETIONS

 Chit funds are the core product of KSFE. So measures must be taken to improve chit
business through initiating the following programme:
1. Centralized chitty registration
2. Chitty payments at the door step of subscribers
3. Implementation of core solutions software in the company
 It should give more concentration in providing service to rural people. For this purpose
branches in rural area may be opened and all types its business should be started. Special
camps should be conducted in the rural area giving awareness about the different products
of the company. In order to have the customership of more low income group people, mini
and tiny term loan should be given to them. Chitties of very small denominations with
attractive sala may also be started. All these will help the rural people to get more out of
KSFE.
 Branches may be started in each and every village and panchayaths so that ordinary people
can have access to the branches. Branch extension counters should be started in different
parts of town, cities and villages.
 KSFE should focus on communication with customers in closely monitor the SMS
services, by follow up the letter services and chitty installment amount should be informed.
 Collection agents should be appointed in all parts of the service area so that chitty
installments and loan repayment installments can be easily collected. So the number of
defaulters can be minimized.
 The number of agents per branch office should be increased and area wise agents should
be appointed to canvass business. Agents should be given commission on the basis of their
role in canvassing business.
 Computerization of each and every branch office should be made compulsorily made so
that all types of unnecessary formalities and procedural bottlenecks can be minimized.
Thus defaulters and malpractitioners can be located easily.
 KSFE should start branch offices outside Kerala especially in the metropolitan cities where
more Keralites are residing.

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5.3 CONCLUSION

KSFE is the Non-Banking Financial Institution undertaken by the Government of Kerala. Since
the company has a largest customer base, it was necessary to conduct a customer satisfaction
analysis for the company. The survey covered all categories of the company. From the responds
taken from customers of KSFE company, The analysis result shows that the service quality of
KSFE is mostly reliable on the assurance scale. The study “Customer satisfaction towards
investing chits in KSFE” is found that investors have a positive attitude towards their investment
made in KSFE. Majority of the customers prefer chit funds for the returns and feel that it is a safe
measure of investment. As far as the socio-economic variables are concerned age, gender,
qualification, income and occupation have been encouraging the attitude of investors towards chit
fund.

24
REFERENCES
1. www.ksfe.com
2. www.eprajournals.com
3. www.scribd.com

25
 ANNEXTURE

QUESTIONNAIRE

1. Name:
2. Gender:
o Male
o Female
3. Age:
o Below 25
o 26 – 35
o 36 – 50
o Above 50
4. Educational qualification
o SSLC
o Plus Two
o Graduate
o Post Graduate
5. Marrital status
o Married
o Unmarried
6. Occupation:
7. Annual savings:
o Upto 10000
o 10000 – 25000
o 25000 – 50000
o Above 50000
8. Are you interested in investing chit fund at KSFE:
o Yes
o No
9. What is primary goal for investing in KSFE:
o Education
o House construction
o For marriage purpose
o Other purpose
10. How long are you the member of the KSFE:
o 1 – 2 years
o 2 – 3 years
o 3 – 5 years
o Above 5 years

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11. How many chits do you have:
o One
o Two
o More than two
12. How you paying the installment:
o Through agent
o Branch
o Online payment
13. The interest rate on foregoing the amount is:
o High
o Low
14. Which chit period you like to prefer:
o 40 months – 60 months
o 60 months – 80 months
o 80 months – 100 months
o Above 100 months
15. In which chit group are you interested to invest?
o Rs. 1 lakh
o Rs. 5 lakhs
o Rs. 10 lakhs
o Rs. 25 lakhs & above
16. When do you normally bid for the chit
o Between 1st & 10th month
o Between 11th & 20th month
o Between 21th & 30th month
o 30th month onwards
o As need arises
17. For what purpose do you use chit amount
o Business investment
o Personal purpose
18. Which type of security you choose when draw a chit
o Property
o Govt employee
o Gold
o Other
19. What according to you are the advantages of chit fund
o Money is easily & quickly available
o Repayment in easy installment
o The profits distributed as dividend
o Interest is low
o Easy membership

27
20. Does investing in chit funds is profitable
o Yes
o No
21. Are you happy with the service being provided by KSFE
o Yes
o No
22. If no , specify the reason: __________________

28