Ad comparison

– Captive
Finance
Management of Financial Services

Group 7

Arpit Jain | Kirti Gehlot | Rishi Kashyap |

Sonu Yadav | Soubhic Saha |
 Captive Finance
Definition A captive finance company is a wholly-owned subsidiary of another Company that
provides loans and other financial services to the customers of those companies.
Captive finance companies provide credit facilities for that company and full-scale
banking, including multi-year loans.

Types  Captive Finance in Banking

 Captive Finance in NBFC
 Captive Finance in leasing
 Captive Finance in Auto Lending

System Parent Company/Group, Captive Finance Company, Customers, Regulators

 Better loan deals with lower interest rates to customer of parent company
Benefits  Easy accessibility to customer & simplified loan Process
 Offer subsidized financial deals with lower risks
 They provide alternative means of income to parent company
 Extend financing services to customer who otherwise be turned down by financial
institutions
 Companies selected for comparison
Hero Fin Corp
• It is a captive finance company of Hero MotoCorp Ltd. • NBFC found in 1997- largest gold financing company in India,
• The company was launched in 1992 as Hero Honda
Finlease Ltd by extending working capital loans and
medium-term finance to component suppliers and
dealers of parent firm Hero MotoCorp, then called
Hero Honda Motors Ltd
• Company is currently engaged in consumer finance
businesses and commercial lending
• Consumer Finance - Two Wheeler, Loyalty Customer
Loans and providing Loans against property
• commercial lending - Indian corporates with a wide
portfolio of financing products which include working
capital loans, machine loans among others.
Muthoot Finance
• HQ: Kerala, with over 5330+ branches in India, 40,000+
Employees across India
• Offers gold loans, foreign exchange services, money
transfers, wealth management services, travel, and tourism
services, and sells gold coins
• Target market - small businesses, vendors, farmers, traders,
SME business owners, and salaried individuals
• Competitive Advantage : 1) Brand Name, 2) Geographical
Presence, 3) Competitive Interest Rate & 4) Economies of
Scale
 Advertisements

Hero FinCorp #Karo Khwabon Se Ishq Muthoot Finance - Life Mein #AageyBadhiye 

https://www.youtube.com/watch?v=C8C1txa1VYM https://youtu.be/_s5WlB_X910
 Advertisement comparison
AD COMPARISON

Hero FinCorp Muthoot Finance

Sunidhi Rajshree Ram Kumar
Sales Executive at MNC Taxi Driver

• Only working member in his household • Planning to start his own company in upcoming
• Sole financial decision maker in her household months

DEMOGRAPHICS GOALS & CHALLENGES DEMOGRAPHICS GOALS & CHALLENGES

• Age: 18-60 years • Wants to buy a 2-Wheeler for her Son • Age: 25-60 years • Aiming to raise money for starting her own
• Female • Is concerned about the reliable financing options • 15 LPA salary company in near future
• 12 LPA salary and trusted brands • Urban location • Don’t have very high collateral to take business
• Semi-urban location • Don’t have time to physical go and research about • MBA loan from the banks
• Bachelors in Commerce various options available • married, 2 kids, Wife not • Don’t want to give home as collateral for business
• Also plans to buy a car soon, will start by learning working loan
driving on a 2nd hand car.
• Don’t want to worry about the authenticity of
Product purchase & easy refund/replace How Muthoot finance Can Help
• Ram expects his venture to start generating good cashflow very soon
How Hero FinCorp Can Help • Ram has some gold that has been passed from generations
• Can get one stop solution for all her instant cash requirement • Easy Loan Facility on Gold
• Can easily get loans for 2 wheeler purchase or used 4 wheeler • Transparent terms & conditions
purchase. • Low Interest Rate & quick disbarment of loan
• Loans gets approved and cleared in hours, so do not have to spend
time in getting things done.
• Trusted ‘Hero’ Factor
 Marketing mix- 7P’s for Hero FinCorp
• App & Web portals provide
accessibility for Purchase
• quicker response, transparent
and hassle-free experience
• 24X7 Customer Services
available
People
• 350,000 active two-wheeler
customer loans in June 2015
• Workforce of 1500-2000
People
• Hero MotoCorp has over
6000 dealers country wide
• Indian nationals, above age 18
• Salaried: Employed for min. 1
year, with at least 6 months at
current job
• Self-employed professionals:
Should be in current business for
min. 1 year
• Wide Range of Products
• Unsecured Business Loans,
Product Doctors Loan, Laon against
Process
property, two wheeler Loan,
Used Car Loan, Machine Loans,
SMEs and commercial Loans
Price
Marketing
mix • Loan Amount : ₹10,000/- to
₹1,00,000/-
• Loan to Value (LTV) Ratio : Up to
Physical Place 95%
evidence
• Low & Attractive Interest Rates
Promotion • Flexible Tenure : up to 48
months
• Pan India Presence
• Various advertising methods
• Accessible at over 1000 touch
such as online, radio, television,
points spread across length &
etc.
breadth of the country
• Showrooms finance
executives • Within the reach of common
• Have started digital marketing man
http://yourfreetemplates.com
Marketing mix- 4Cs –Customer Value Proposition –
Hero FinCorp
Cost to satisfy :
Customer wants & needs :
• They intends to provide value based
• Trust Finance Partner
innovative products with delightful
• Easy Disbursal of Loans
customer service,
• One stop solution for multiple
• costs to satisfy needs could be high for
financing needs
company
• 24X7 Customer Support
4C’
Communication:
• Delivers information about their
s Convenience to buy:
• Multiple payment options
financial offerings through hero • Up to 95% LTV Ratio
MotoCorp dealers and 2nd hand car • Diversified offerings, Property, Business
dealers in India Loan, Vehicle loan, Machine Loan
• Communication through different
• Convenient and flexible tenure
media such as online, radio, television

http://yourfreetemplates.com
 Marketing mix- 7P’s for Muthoot Finance
• Instant cash, web pay
facility, E-KYC, information
availability on I Muthoot
app, pre-paid visa card
People
• Business development
executives, customer
care specialist
• The brand name and branch
offices pan India
• Financial Services, Gold
coin, insurance, travel
Process Product services, housing finance,
foreign exchange, money
transfer, gold loan,
iMuthoot app
Price
Marketing
mix
• Average rate of interest
on gold loan (12%
Physical Place onwards)Offers
evidence services in every part
of India
Promotion
• Pan-India presence in
most of the states and
• informative ad campaigns UT including 1,072
via electronic and print cities
media in, radio, newspapers, • 4,400 branches
magazines, social media established at strategic
platforms & own website, places all over India.
http://yourfreetemplates.com
Marketing mix- 4Cs –Customer Value Proposition –
Muthoot Finance
Cost to satisfy :
Customer wants & needs :
• Low interest rates
• No extra collateral other than
• Cost of borrowing based on
gold
• Short term borrowing gold quality & purity
• Costs for safekeeping of gold
• Gold loans
as collateral

4C’
Communication:
• Communication via radio,
s Convenience to buy:
• Easily accessible loans from
newspapers, magazines, social media branches in all major states
platforms, own website, billboards at
and UT including 1,240 taluks,
most populated places and sides and
backs of vehicles to gain maximum 364 districts and 1,072 cities
brand recognition

http://yourfreetemplates.com

Financial Capabilities
• Product Diversification-
Companies are
expanding their existing
platforms for new
products like Credit cards,
mortgages, Mobility
products etc.
• Platform Diversification-
Companies are trying to
have presence on
multiple platform
Key Learnings & Trends
Data & Connected Improve the Current Customer
Services Processes Relationship
• Leverage already • Increasing customer
• Companies are trying
existing processes to engagement through
to Capitalize on give more lean services
detailed insights into technology such as AI
to customer
both client related & driven chatbots
• Leverage existing
•
System related data Customer Relationship
Customer channels
to keep the customer (e.g., Apps, Portals) for Management teams
•
with them & to more penetration and Testimonials and
acquire more new customization of campaigns to create
customer Products & Services and maintain online
• Build on existing buzz
platform for new
products
• Enabling the Big Data
for personalization of
Products & Services
Thank you