boney hector d'cruz (am.ar.u3com08013)- final project

“COMPARATIVE STUDY ON GOLD LOAN PROVIDED BY MUTHOOT

FINANCE AND ITS COMPETITOR (MANAPPURAM FINANCE)”

PROJECT REPORT

Submitted in partial fulfillment of the requirements for the award of the degree in

BACHELOR OF COMMERCE

Submitted by

BONEY HECTOR D’CRUZ

Project Mentor MS. GAYATHRI DEVI

DEPARTMENT OF COMMERCE AND MANAGEMENT

AMRITA SCHOOL OF ARTS & SCIENCES

AMRITA VISHWA VIDYAPEETHAM

AMRITAPURI

Comparative study of Muthoot Finance and Manappuram Finance

Mentor’s Name: Gayathri Devi

Lecturer

Department of Commerce and Management

Amrita School of Arts and Science

Amritapuri

C E R T I F I C A T E

This is to certify that the project entitled “Comparative study on gold loan provided by Muthoot Finance and its competitor (Manappuram Finance)” is a bonafide record of the work done by BONEY HECTOR D’CRUZ under my supervision studying at Amrita School of Arts and Science, Amritapuri, in partial fulfillment of the requirements for the award of the degree of Bachelor of Business Management from Amrita Vishwa Vidyapeetham , during the period January- March 2011. It has not formed the basis for award to any candidate for any previous Degree, Diploma, Associate ship, Fellowship, or other similar titles.

We wish all success in his career.

Station: Amritapuri Date (Ms. Gayathri Devi)


BONEY HECTOR D’CRUZ

THIRD YEAR, B .COM.

Amrita School of Arts and Science

Amrita Vishwa Vidyapeetham

Amritapuri

D E C L A R A T I O N

I, BONEY HECTOR D’CRUZ, hereby declare that the project entitled

“COMPARATIVE STUDY ON GOLD LOAN PROVIDED BY

MUTHOOT FINANCE AND ITS COMPETITOR (MANAPPURAM

FINANCE)”, a record of the independent project done by me during the

period January- March 2011. I also declare that it has not formed the basis

for award to any candidate for any previous Degree, Diploma, Associate ship,

Fellowship, or other similar titles.

PLACE: KOLLAM (Boney Hector D’cruz)Date:


ACKNOWLEDGEMENT

First and foremost I praise and thank the Almighty for being the unfailing source of support and strength throughout the completion of my internship. I have a great pleasure in offering my sincere thanks to Ms. Gayathri Devi, Lecturer, Department of Commerce and Management for the guidance, suggestions and immense help rendered by him throughout the internship I also wish to express my thanks to Mr.Ansil B. Peter Branch manager, Muthoot Finance Private limited, Vaddy-Kaval Junction for his guidance and support during my training period. Words fall shortly to thank all my friends for all their friendship and support. I am forever indebted to my parents for their constant encouragement and support without which, it would not have been possible to bring this report to completion.


ABSTRACT

During the course of B.COM in AMRITA VISHWA VIDYAPEETHAM, I have completed the project titled “Comparative study on gold loan provided by Muthoot Finance and its competitor (Manappuram Finance)”. The project is a comparative study of a gold loan financing company with special reference to the gold loans offered by Muthoot Finance and Manappuram Finance. The primary information was collected through direct visits to the concern, Personal interviews with the branch manager, staff and customers and also through questionnaires. This primary data was analysed using tables and charts. The secondary data was collected through company’s annual reports and internet. A detailed analysis was conducted on the questionnaires collected from the customers of both institutions and interpretation of data was done by ways of tables and charts. During the study it was found that both companies are in a cut throat competition to be the leader in this industry. Some of the problems faced by companies were analysed and suitable suggestion were given.


LIST OF FIGURES

________________________________________________________________________

FIGURE NO TITLE PAGE NO

2.1 Muthoot’s organisational structure

2.2 Manappuram’s organisational structure

5.1 Gold loan in a year

5.2 Rate of interest

5.3 Location of the institute

5.4 Staff behavior

5.5 Gold loan application procedure

5.6 Infrastructure facilities

5.7 Time taken for the whole gold loan procedure

(Muthoot Finance)


(Manappuram finance)

5.9 Security standards

5.10 Source of knowledge for Muthoot

5.11 Source of knowledge for Manappuram

5.12 Effective gold loans for Muthoot

5.13 Effective gold loans for Manappuram



LIST OF TABLES

________________________________________________________________________

TABLE NO. TITLE PAGE NO

5.1 Gold loan in a year


5.3 Location of the institute

5.4 Staff behavior

5.5 Gold loan application procedure

5.6 Infrastructure facilities


5.8 Security standards

5.9 Source of knowledge

5.10 Effective gold loans

5.11 Long payback period


5.13 Gold Portfolio of the different gold loan providers

5.14 Table on Net loans and Market share


TABLE OF CONTENTS

CHAPTER

NO. TITLE PAGE NO.

I Introduction 1-3

II Organisational Profile 4-14

IIIResearch Objectives and Scope of

Research Project15-17

IV Research Methodology and limitation 18-22

VData Analysis, Interpretation and

Presentation23-43

VI Findings, Suggestions and Conclusion 44-48

VII Limitations 49-50

Appendix

Bibliography51-55


CHAPTER I INTRODUCTION


India is one of the largest markets for gold and as of fiscal 2010, accounts for approximately 10% of the total world gold stock with an annual demand of approximately 700 tonnes. Several gold based financial products have been made available to retail consumers in the Indian market from time to time with a view to bring the gold holdings to the core financial market.

Lending against gold has been one of the most popular instruments based on gold, and it works well with the Indian rural population, which typically views gold as an important savings instrument that is liquid and can be into converted into cash instantly to meet their urgent cash requirements. Moreover, traditionally gold owners in southern India are more open than elsewhere in the country to accept and exercise the option of pledging gold to borrow money.

1.1 TOPIC

“Comparative study on gold loan provided by Muthoot finance and its competitor

(Manappuram finance)”

1.1.1 STATEMENT OF THE PROBLEM

One of the most discussed topics in the present competitive gold loan market is about the best gold loan company. The two stand out names in this context is Muthoot Finance Limited and Manappuram General Finance and Leasing Ltd, Both companies face a cut throat competition among each other to reach the top position of this market. In order to maintain and increase the market share both companies have to find out their weakness and turn it into their strengths. Satisfied customers are vital for the existence of the firms. This study aims to bring out the reasons which make customers choose one company over the other and enlist the best gold loan company in India.

1.2 REASONS FOR SELECTION OF THIS TOPIC

Muthoot Finance Limited is the largest gold financing company in India in terms of loan portfolio (Source: IMaCS Industry Report (2010 Update). Muthoot provides personal and business loans secured by gold jewellery. They have a “Systemically Important Non-deposit taking NBFC” headquartered in the southern Indian state of Kerala. Our branch network as of October 31, 2010 was 2,813 branches…

Manappuram General Finance and Leasing Ltd or MAGFIL is a non-banking financial company (NBFCs) situated in Valapad, Thrissur, Kerala state. Manappuram is the first NBFC in India to get a short term rating of A1+ from ICRA (the highest short term rating awarded to any corporate in India by ICRA) and a long term rating of LA+ from ICRA. Manappuram has over 1,000 branches across 15 states, with a staff strength of over 6,500 people and a customer base of over 5,000…


http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Kerala

http://en.wikipedia.org/wiki/Thrissur

There have been many studies connected with the comparison between two different organisations, but no significant efforts has been made to study the gold loan provided by Muthoot Finance and Manappuram Finance, the two top gold loan financing companies in India. Until now a study on the gold loan facilities offered by Muthoot and Manappuram has not undertaken. The present study seeks to fill up the gap and is likely to open further detail for probe in this regards.

1.3 LEARNING FROM THE STUDY

This study will help to identify the best gold loan provider and the reasons which make it stand out from its competitors. The comparative analysis will also help to recognize the important features which a customer looks into while choosing a gold loan plan. And as for the other players in the market, this study will enable them to be acquainted with their weaknesses and strive to improve those features in which they lag behind the top player.


CHAPTER II ORGANISATIONAL

PROFILE

2.1 INDUSTRIAL PROFILE


2.1.1 OVERVIEW OF THE INDIAN ECONOMY

India is the fifth largest economy in the world after the European Union, the United States, China and Japan with an estimated GDP of approximately US$3.56 trillion in 2009, on purchasing power parity ("PPP") basis. India is also one of the fastest growing economies in the world. According to the Central Statistical Organization, India's GDP grew at a rate of 7.4% in fiscal 2010.According to India Brand Equity Foundation, India is one of the largest bullion markets in the world. India is also the largest consumer of gold jewellery in the world (approximately 20% of global gold consumption), and the largest importer of gold in the world. Gold imports were approximately 739 tonnes in fiscal 2010.

2.1.2 OVERVIEW OF THE INDIAN CONSUMER CREDIT MARKET

The consumer credit market in India has undergone a significant transformation over the last decade and experienced rapid growth due to consumer credit becoming cheaper, more widely available and increasingly a more acceptable avenue of funding for consumers. The consumer credit market has developed in India due to the following factors:

• Increased focus by banks and financial institutions on consumer credit resulting in a market shift towards regulated lenders from unregulated moneylenders/financiers.

• Increasing trend of Indian consumers to acquire assets such as cars, goods and houses on credit.

• Fast emerging middle class and growing number of households in our target segment.

• Improved terms of credit as interest rates in India fall in line with global interest rates.

• Legislative changes that offer greater protection to lenders against fraud and potential default increasing the incentive to lend.

• Growth in assignment and securitisation arrangements for consumer loans has enabled non deposit based entities to access wholesale funding and compete solely on their ability to originate, underwrite and service consumer loans.

Credit availability, affordability and consumer confidence are the key drivers for consumer loan growth. A variety of financial intermediaries in the public and private sectors participate in India's consumer lending sector, including the following:

• Commercial banks.• Long-term lending institutions.• NBFCs, including housing finance companies.• Other specialized financial institutions and state-level financial institutions and• Lenders in the unorganized sector.

2.1.3 GOLD FINANCE INDUSTRY IN INDIA


The recent economic boom and crash has sent shock waves throughout the economy, creating radical change in business paradigms, consumer demands, and even in economic cultures themselves. One of the greatest changes in the developing world has been a change in the people's relationship with gold. Since the days of the Roman Empire, gold has been seen as both a designer luxury and an immense store of value, and because of its portability and use as jewelry, gold has been a traditional fashion and savings account for people in Eastern Europe, India, and other foreign countries for a very long time.

But lately, old habits seem to be dying fairly easily. The pawning of gold, which has for a long time been perceived as shameful, is rapidly becoming an acceptable practice. In India, for example, this long-held tradition is being replaced by gold loan businesses, which offer personal and business loans with gold as a security for lower interest rates than one would have access to with an unsecured loan. Many of the borrowers are women, who are now becoming more active members of society and are looking for ways to finance things such as holiday trips, children's educations, and down payments for homes.

Private lenders in India are making a killing off of this new trend. Once a very small industry, the gold loan business has taken off and is now a booming trend in India. The business is an easy way for people in impoverished areas to gain access to quick credit. This is not to say that credit comes cheap; many of these gold loan businesses charge interest at rates as high as 18%; higher than many of the credit cards we are familiar with. While this may seem a bit harsh, this is still a great leap forward both culturally and economically for people in the third world. Historically, informal lending practices such as these are the beginnings of developed credit markets in later stages of development. This helps people like those in rural India gain access to the credit that they need to begin building futures for themselves and their children.

2.2 COMPANY PROFILE


2.2.1 MUTHOOT FINANCE LIMITED

Muthoot Finance a subsidiary of Muthoot Group was established in 1939, and is primarily involved in the financial sector of the country. We are the largest gold financing company in India in terms of loan portfolio. We provide personal and business loans secured by gold jewellery, or Gold Loans, primarily to individuals who possess gold jewellery but could not access formal credit within a reasonable time, or to whom credit may not be available at all, to meet unanticipated or other short-term liquidity requirements. Our Gold Loan portfolio as of March 31, 2010 comprised approximately 2.8 million loan accounts in India that we serviced through 1,605 branches across 20 states and two union territories in India. According to the IMaCS Industry Report 2009, as of March 31, 2010 our branch network was the largest among gold loan NBFCs in India. We have since increased our branch network to 1,921 branches as of August 31, 2010, and used our branch network to serve an average of 53,989 customers per day in the month of August 2010. As of August 31, 2010, we employed 12,220 persons in our operations. Muthoot also provides various financial services such as Insurance distribution, Wealth Management, Foreign Exchange, Money Transfer and Vehicle & Asset Finance. Muthoot Finance was selected as one of the Top 10 Finance companies to work for in India by Naukri.com. Muthoot Finance privately placed 4% of its paid up capital to Private Equity players - BaringsIndia and Matrix Partners India for Rs.1.57 billion, hence valuing the earlier privately held company at over $1 billion.

We are a “Systemically Important Non-deposit taking NBFC” headquartered in the southern Indian state of Kerala. Our operating history has evolved over a period of 70 years since M George Muthoot (the father of our Promoters) founded a gold loan business in 1939 under the heritage of a trading business established by his father, Ninan Mathai Muthoot, in 1887. Since our formation, we have broadened the scale and geographic scope of our retail lending operations so that, as of March 31, 2010, we were India’s largest provider of Gold Loans. In the years ended March 31, 2008, 2009 and 2010, revenues from our Gold Loan business constituted 95.97%, 96.71% and 98.08%, respectively, of our total income. In addition to our Gold Loans business, we provide money transfer services through our branches as sub-agents of various registered money transfer agencies, and recently have commenced providing collection agency services. We also operate three windmills in the state of Tamil Nadu.

We issue secured non-convertible debentures called “Muthoot Gold Bonds” on a private placement basis. Proceeds from our issuance of Muthoot Gold Bonds form a significant source of funds for our Gold Loan business. We also rely on bank loans and subordinated debt instruments as our sources of funds. As of March 31, 2010, we had Rs.27,192.5 million in outstanding Muthoot Gold Bonds and Rs.25,612.7 million in other borrowings. We also raise capital by selling a portion of our loan receivables under bilateral assignment agreements with various banks that purchase our portfolio primarily for meeting their priority sector lending commitments.

Our customers are typically small businessmen, vendors, traders, farmers and salaried individuals, who for reasons of convenience, accessibility or necessity, avail of our credit facilities by pledging their gold jewellery with us rather than by taking loans from banks and


http://en.wikipedia.org/wiki/Matrix_Partners

http://en.wikipedia.org/wiki/Barings

http://en.wikipedia.org/wiki/Muthoot_Group

other financial institutions. We provide retail loan products, primarily comprising Gold Loans. We also disburse other loans, including those secured by Muthoot Gold Bonds. Our Gold Loans have a maximum 12 month term. Our average disbursed Gold Loan amount outstanding was Rs.26,183.0 per loan account as of March 31, 2010. In the year ended March 31, 2010, our retail loan portfolio earned, on average, 1.67% per month, or 19.94% per annum.

As of March 31, 2008, 2009 and 2010, our portfolio of outstanding gross Gold Loans under management wasRs.21,790.1 million, Rs.33,000.7 million and Rs.73,417.3 million, respectively, and approximately 30.1 tons,38.9 tons and 65.5 tons, respectively, of gold jewellery was held by us as security for our Gold Loans . Gross non-performing assets ("NPAs") were at 0.42%, 0.48% and 0.46% of our gross retail loan portfolio under management as of March 31, 2008, 2009 and 2010, respectively.

In the years ended March 31, 2008, 2009 and 2010, our total income was Rs.3,686.4 million Rs.6,204.0 million and Rs.10,893.7 million, respectively, demonstrating an annual growth rate of 57.56%, 68.29% and 75.59%, respectively. Our profit after tax in the years ended March 31, 2008, 2009 and 2010 was Rs.636.0 million, Rs.977.2 million and Rs.2,275.7 million, respectively, demonstrating an annual growth rate of 44.61%, 53.65% and 132.88%, respectively. Our net worth as of March 31, 2008, 2009 and 2010 was Rs.2,131.1 million,Rs.3,614.5 million and Rs.5,841.9 million, respectively.We believe that the following competitive strengths position us well for continued growth:Market leading position in the Gold Loan business with a strong presence in under-served rural and semi urban markets

Gold loans are the core products in our asset portfolio. We believe that our experience, through our Promoters, has enabled us to have a leading position in the Gold Loan business in India. Highlights of our market leading position include the following:

We are the largest gold financing company in India in terms of loan portfolio. Our loan portfolio as of March 31, 2010 comprised approximately 2.8 million loan accounts in India with Gold Loans outstanding of Rs.73,417.3 million.

We have the largest branch network among gold loan NBFCs. As of March 31, 2010, we operated 1,605 branches across 20 states and two union territories in India, and in the month of August 2010, we served an average of 53,989 customers daily. Our branch network has expanded significantly in recent years from 373 branches as of March 31, 2005 to 1,921 branches as of August 31, 2010, comprising 335 branches in northern India, 1,322 branches in southern India, 197 branches in western India and 67 branches in eastern India.

We believe that due to our early entry we have built a recognizable brand in the rural and semi-urban markets of India, particularly in the southern Indian states of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka. As of March 31, 2010, the southern Indian states of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka constituted 75.38% of our total Gold Loan portfolio.

We have a strong presence in under-served rural and semi-urban markets. A large portion of the rural population has limited access to credit either because of their inability to meet the eligibility requirements of banks and financial institutions


because credit is not available in a timely manner, or at all. We have positioned ourselves to provide loans targeted at this market.

We offer products with varying loan amounts, advance rates (per gram of gold) and interest rates. The principal loan amounts we disburse usually range from Rs.2,000.0 to Rs.100,000.0 while interest rates on our Gold Loans range between 12.00% to 30.00% per annum.

2.2.1.1 Muthoot Organisational Structure fig. 2.1


2.2.2 MANAPPURAM GENERAL FINANCE AND LEASING LIMITED


With the Trust, Commitment and Transparency extending over 61 years, Manappuram Group has emerged as a force to reckon with, under the stewardship of Mr. V.P. Nandakumar, the Chairman of the company. Today with 9 companies under its fold, having more than 1,950 branches spread over 19 States of India and a total business over Rs. 70 Billion, a workforce of over 14,500 and a customer base of over 5 Million, we are India`s Largest Listed and Highest Credit rated Gold Loan Company.

We are involved in providing a wide range of financial solutions to our customers that will make their life easy.

The company was founded in 1949 by late Mr. V.C. Padmanabhan, a great visionary of his times. The company commenced its operations at Valapad, mainly with money lending activity on a very modest scale. The principal asset of the company was the impeccable integrity devotion and foresight of its founder. The company soon established itself as a safe haven for investments of the people of the area providing absolute safety and assured returns. On the sad demise of the founder in 1986, his illustrious son, Mr. V.P. Nandakumar, the present Chairman took over the reins. Under his dynamic leadership, the company never had to look back. Mr. Nandakumar was working as an officer of the erstwhile Nedungadi Bank, before he took over the captaincy of the company. Known for his sharp business acumen and professionalism, Mr. Nandakumar has been instrumental in taking the organization to its present level. With an alert mind and unconventional methods of problem solving, Mr. Nandakumar has put this organization on the launching pad. He believes that the future belongs to those who can advantageously use the technology to serve the customers by evolving customized products and services.

The Group`s flag-ship Company, Manappuram General Finance and Leasing Limited (MAGFIL) was established in 1992 in the wake of economic reforms launched by the Government of India mainly to take advantage of the importance assigned to Leasing as a vehicle to promote decentralized pattern of Economic Growth through small and medium enterprises. In a short span of time, MAGFIL had several Firsts.

First NBFC from Kerala to receive a Certificate of Registration issued by RBI mainly on the strength of the company`s ability to settle the depositors` claim in full.

First NBFC from Kerala to get a credit rating of "MA+" from ICRA, (a credit rating agency approved by RBI) which signifies the company`s ability to make timely repayment of the principal and interest under its Public Deposit Programme. Within a short span of time MAGFIL recorded a phenomenal growth to become a premier NBFC from South India.

It is the FIRST NBFC from Kerala to have received Adequate Safety rating for its Secured Non- convertible Redeemable Debenture issue for Rs. 50 million.

First NBFC from Kerala to go for public issue.


First NBFC from Kerala to issue bonus shares at the ratio 1:1.

First NBFC from Kerala to receive Foreign Direct Investment (FDI).

First NBFC from Kerala to receive AD- II (Authorised Dealer - II) License from RBI.

First NBFC from Kerala to obtain Broker`s License from IRDA (Insurance Regulatory & Development Authority).

First NBFC in the country to receive a Short-term rating of A1+ by ICRA and P1+ by CRISIL. These are the Highest Short Term Rating awarded by ICRA and CRISIL to any Corporate in India and Long term rating of LA+ for its working capital limit.

The shares of the company are listed in Mumbai, Chennai and Cochin Stock Exchanges and are actively traded in BSE at levels far above par.

In 1993, this Group set up Manappuram Benefit Fund Limited, a NIDHI Company to provide specialized services to its members. Today, it is one of the topmost Nidhi Companies in South India.

Manappuram Chits (I) Limited, a chit fund company registered under the Chit Fund Act 1982, a central legislation enacted by Government of India, was set up in the year 2000, where most of the Chit Fund Companies in Kerala found it difficult to conform to the discipline of this central legislation.

As a part of its diversification, the company also started Forex business upon the Reserve Bank of India granting it a full-fledged money changers license in the year 2002.

The company also commenced in a big way for instant money transfer facility, in collaboration with Xpress Money, Coinstar, Instant Cash, Zoha, Ezremit and MoneyGram. Instant Money Transfers being the fastest method of inward and outward remittance of funds will be useful to NRIs for remitting money to or from their relatives in India, who will be able to receive the proceeds within a few minutes of remittance.

Whilst the company`s core activity continues to be Gold Loan, it has entered very aggressively into fee-based activities especially in the wake of opening up of insurance sector allowing private participation. In November 2006, company was awarded Broker`s License by IRDA to sell insurance. As an Insurance broker, the company is able to offer its customers a wide variety of products tailor-made to their requirements.

Thus the company has emerged as a one-stop financial Super Market. In order to look after the fee-based activities exclusively, the Group has promoted a separate company called Manappuram Insurance Brokers Private Limited (MAIBRO) as wholly owned subsidiary of MAGFIL, the flagship company of the Group.

The Group has received ISO 9001-2000 certification in the year 1993 as a hallmark of its having attained the International Quality Standards.


As a premier organization, the company has derived its strength from the dedication of its highly motivated staff. Being an organization with a vision, the company has recognized that the best of investments are investment in people and has accordingly assigned considerable importance in the matter of training its staff. It is a matter of considerable pride that the company has a full-fledge training establishment with very few parallels in the NBFC sector, where in-house training courses are conducted almost continuously in a very professional manner for up gradation of the skills and for enhancement of functional efficiency so as to make the organization a "Customers` Delight". Every employee has been given very clear idea of his role which enables them to function more efficiently and produce better results.

The Group functions with a tremendous sense of social responsibility. The setting of Manappuram Institute of Management (MAINMA) in September, 2005 to be groomed into a management institution of all India repute was dictated by this social responsibility.

The Company has signed an agreement with M/s. Hudson Equity Holdings Limited and Sequoia Capital India Investment Holdings for preferential issue of compulsorily convertible preferential shares of Rs.100/- each for Rs. 234 million each, aggregating to Rs. 468 million to be converted into equity shares later. When converted into equity, both these investment companies together will be holding Rs. 4,667,284 (Rupees Four Million, Six Hundred and Sixty Seven Thousand, Two Hundred and Eighty Four) equity shares of Rs. 10/- each at a price of Rs. 100.272 constituting a maximum of 29.79% of paid- up equity share capital of the company. These funds have been raised for expanding our business in gold loan and vehicle loan by opening of more branches across the country.

In November 2008, the company has also received capital infusion of Rs. 1 Billion and 80 Million from UK and the US-based equity firms, with participation from its promoters. The UK-based Ashmore Alchemy, a joint venture between Ashmore and Alchemy has invested Rs. 320 million through its Mauritius-based investment vehicle, AA Development Capital India Fund, LLC.

Considering the increase in the size and volume of operations of the company, we have appointed Earnest & Young, an internationally reputed firm as our auditors.

The company`s vision in the short term is to emerge as a strong national player, with a wide Branch network across the entire country to serve its customers as a one-stop financial super market that makes our customers` life easy.


2.2.2.1 Manappuram Organisational Structure

fig. 2.2


Chairman

Board of Directors

Managing Director

Chief General Manager

Finance Manager

Operations Manager

Personnel Manager

Marketing Manager

Branch Manager

CHAPTER III RESEARCH OBJECTIVES

AND SCOPE OF RESEARCH PROJECT


3.1 PROBLEM DEFINTION

One of the most discussed topics in the present competitive gold loan market is about the best gold loan company. The two stand out names in this context is Muthoot Finance Limited and Manappuram General Finance and Leasing Ltd, Both companies face a cut throat competition among each other to reach the top position of this market. In order to maintain and increase the market share both companies have to find out their weakness and turn it into their strengths. Satisfied customers are vital for the existence of the firms. This study aims to bring out the reasons which make customers choose one company over the other.

3.2 OBJECTIVES OF THE RESEARCH PROJECT

3.2.1 PRIMARY OBJECTIVES

The primary objective of this study is to compare the gold loans provided by Muthoot Finance Limited and its competitors.

To analyze the gold loan facility provided by Muthoot Finance limited.

To observe the working of the various departments in relation with the study.

To analyze the rate of customer satisfaction.

To know about the preferences of the customers.

To study the behavioral factors of customers in choosing a particular gold loan.

3.2.2 SECONDARY OBJECTIVE

To suggest various factors to improve customer satisfaction. Thus, increasing the market share of the company.


3.3 SCOPE OF THE RESEARCH PROJECT

The scope of the study is to identify and analyze the factors which make the gold loan provided by Muthoot Finance Limited the best and most sought after. The reason behind the huge success of this facility is unlimited. This study intends to:

To know the present market share of Muthoot Finance Limited.

Indentify the factors responsible for the high customer satisfaction.

To evaluate the social security and empowerment process of the company.

To evaluate the suggestions of the customers which is necessary for the further development of the organization.


CHAPTER IV RESEARCH METHODOLOGY

AND LIMITATIONS


In this chapter, explains the structural frame work .The research methodology considered as a blue print of the study. It determines the strengths, reliability and accuracy of the project. Methodology can be said as the methods used by researchers in selecting samples, sample size, data collection and various tools in data collection.

4.1 RESEARCH PLAN

4.1.1 PRELIMINARY INVESTIGATION

Preliminary investigation involves the following: Direct visit to the company. Discussions with the branch manager. Analysed about the scope and viability of the existing facilities. Secondary data were used to get an overview about the two companies.

4.1.2 EXPLORATORY STUDY

Personal interviews with branch manager, staff and the customers. Questionnaires were used to understand various factors affecting the gold loan

financing decision. To analyse and interpret the data collected using figures and tables. The last phase of this project is to give suggestions to both Muthoot Finance and

Manappuram Finance.

4.2 RESEARCH DESIGN

“A research design is the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance” by F.N.Kerlinger (1959)

4.2.1 PHASES OF RESEARCH DESIGN

Sample designSample design deals with the method of selecting items to be observed for the given study.

Observational designObservational design relate to the conditions under which the observations are to be made while conducting research studies.

Statistical designThese design concern with the quantitative and statistical aspects of the design such as technique of study, the methods of model building etc.


4.2.2 COLLECTION OF DATA

The successes of the study are based upon the proper collection of data. Normally data collected comes under two categories; Primary and Secondary.

4.2.2.1 PRIMARY DATA

The data collected directly by the investigator are called primary data. They are original and give first hand information. It can be collected by different methods viz. direct personal investigation, indirect oral investigation etc. Primary data were collected through - Questionnaire- Personal interview- Survey method- Observation- Expert opinion

Questionnaire

The primary data was collected mainly by using a questionnaire. In study, structured questionnaire consisting of a list of questions pertaining to the dichotomous questions, multiple choice questions and questions for recommendations and suggestions. This facilitates the respondents to fill up the questionnaire is an easy and fast manner.

The questions are divided in two following sections:-

Personal details Inquiry details

Personal Interview

The personal interview was taken from half of the respondents. This was mainly to elicit information that was left out in the questionnaire opinions and suggestions were asked for the betterment of the project.

Survey method

Survey is the most commonly used method of primary data collection in marketing research. This is widely used because it’s extreme flexibility. Survey research is a systematic gathering of data from respondents through questionnaire. Survey technique used in the study is personal interview. The advantages of this method are:

It requires relatively shorter period of time to complete

Researcher can procure many different types of information


The amount of information produced on each aspect is larger.

There is a possibility of more accurate reply

4.2.2.2 SECONDARY DATA

The collected by the investigator from the data already collected by others for some other purpose are called secondary data. Thus secondary data are refined data from primary data. It is also called second hand data because data is collected from previous reports about the organization from the internal books, magazines and World Wide Web. Secondary data are collected through - Annual reports- Websites- Journals and magazines


4.3 SAMPLING PLAN

Sample Frame

In a present study, convenience sampling method is used for collecting the primary data. In the survey, 60 customers are selected as sample.

Tools for collection of data

A questionnaire is developed to collect data from the respondent under the sample.

Analysis of Data

The primary data are analyzed by using statistical techniques like percent

4.3.1 STATISTICAL TOOLS

The tools used for the analysis are Simple percentage and Diagrammatic representation.

Simple Percentage

Percentage refers to a special of ratio percentage are used in the making comparison between two or more data. Percentage is used to describe relationship. Since the percentage reduce everything to a common base thereby allow meaningful comparison to be made

Number of frequencyTotal number of frequency

× 100

Diagrammatic Representation

Diagrams are used to represent the tabulated data diagrammatically as they will give a vivid picture about the information collected. The diagrams include.

Simple Bar diagram

Multiple Bar diagram

Pie diagram

In this particular study the attitudes of a selected sample have been analyzed. There is a note of relevance to primary data .since the research objectives can only be achieved through collecting primary data.


CHAPTER V DATA ANALYSIS, INTERPRETATION

AND PRESENTATION


1. How often do you take a gold loan in a year?

Table 5.1

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramOnce 11 13 36.67 43.332-5 times 19 9 63.33 306-10 times 0 8 0 26.67More than 10 times 0 0 0 0

fig. 5.1

Once 2-5 times 6-10 times More than 10 times

0

2

4

6

8

10

12

14

16

18

20

Muthoot ResponseManappuram Response

INTERPRETATION

The above chart was designed to understand number of times a customer applies for a gold loan in Muthoot and Manappuram.

The response of the customers suggest that 36.67% of Muthoot’s customers applies for a gold loan just once while the rest of the 63.33% applies for a gold loan 2-5 times.

In case of Manappuram, Customers who choose their gold loan facility once stands at 43.33% and those who choose the same 2-5 times a year stands at 30%. Rests 26.67% of the customers choose this facility 6-10 times a year.

Both Muthoot and Manappuram don’t have any customers who apply for gold loan more than 10 times.


As per the scale below, rate the following factors of Muthoot Finance Limited and Manappuram General Finance and Leasing Limited:

5- Excellent 4- Very Good 3- Good 2- Fair 1- Bad

I. Rate of interest

Table 5.2

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramExcellent 6 6 20 20Very good 10 6 33.33 20Good 9 11 30 36.67Fair 5 7 16.67 23.33Bad 0 0 0 0

fig. 5.2

Excellent Very good

Good Fair Bad0

2

4

6

8

10

12


INTERPRETATION

The above chart was designed to understand the satisfaction of the customers with the interest rate on gold loan offered by Muthoot and Manappuram.

Here, 20% of the customers of both Muthoot and Manappuram believe that the interest offered by both companies is excellent. While 33.33% and 20% of customers of Muthoot and Manappuram think the rate of interest is very good.

30% (Muthoot) and 36.67% (Manappuram) of the respondents believe the interest rate is good.

16.67% (Muthoot) and 23.33% (Manappuram) of the respondents believe the interest rate is fair. None of the respondents thought that interest rate offered by both companies was bad.

II. Location of the institute


Table 5.3

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramExcellent 8 5 26.67 16.66Very good 17 11 56.67 36.67Good 5 8 16.66 26.67Fair 0 5 0 16.67Bad 0 1 0 3.33

fig. 5.3

Excellent Very good

Good Fair Bad0

2

4

6

8

10

12

14

16

18


INTERPRETATION

The above chart shows the customer response on the location of both the institutes.

Here, Muthoot has a superior lead over Manappuram. This is easily recognisable as 26.67% of Muthoot’s respondents believe that location of the institutes is excellent while 56.67% of them believe it is very good.

On the other hand, 16.66% and 36.67% of Manappuram’s respondents considered the location factor excellent and very good respectively.

The share of customers who choose ‘Good’ as their choice to this question stands as 16.66% (Muthoot) and 26.67% (Manappuram).

None of Muthoot’s customers selected fair and bad as their option while 16.67% and 3.33% of Manappuram’s clients opted for fair and bad respectively.

III. Staff behavior


Table 5.4

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramExcellent 7 7 23.33 23.33Very good 9 12 30 40Good 10 7 33.33 23.33Fair 4 4 13.34 13.34Bad 0 0 0 0

fig. 5.4

Excellent Very good

Good Fair Bad0

2

4

6

8

10

12


INTERPRETATION

Staff behavior is interpreted in the above chart. About 23.33% of both the organizations thought that the behavior of staff is excellent.

The share of customers who choose very good as the option stands at 30% for Muthoot and 40% for Manappuram.

33.33% and 13.34% of Muthoot’s respondents believe that staff behavior was good and fair respectively. This preference was selected by 23.33% and 13.34% in case of Manappuram.

None of the respondents to the questionnaire believe that the behavior of staff in both these institutes was bad.

IV. Gold loan application procedure


Table 5.5

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramExcellent 12 6 30 20Very good 3 7 10 23.33Good 11 14 36.67 46.67Fair 4 3 13.33 10Bad 0 0 0 0

fig. 5.5

Excellent Very good

Good Fair Bad0

2

4

6

8

10

12

14


INTERPRETATION

The above chart was designed to interpret the response of customers to Muthoot’s and Manappuram’s gold loan procedure.

It was interpreted that 30% and 10% of Muthoot’s respondents as well as 20% and 23.33% of Manappuram’s respondents believed that this factor was excellent and very good respectively.

As for option ‘Good’ and ‘Fair’ the share stands at 36.67% and 13.33% (Muthoot) and 46.67% and 10% (Manappuram).

No one selected ‘Bad’ in response to this question for either company.

V. Infrastructure facilities


Table 5.6

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramExcellent 8 4 26.67 13.33Very good 14 6 46.67 20Good 5 12 16.66 40Fair 3 7 10 23.34Bad 0 1 0 3.33

fig. 5.6

Excellent Very good

Good Fair Bad0

2

4

6

8

10

12

14


INTERPRETATION

The above chart represents the rating given by the customers on the infrastructure facilities of both institutes.

26.67% was the share of Muthoot customers who thought that these facilities were excellent and almost half of the total respondents (47.67%) believed it is very good.

And as for Manappuram, those who believed this facility is excellent stands at 20% and 40% of the total thought it is very good.

The option ‘Good’ was selected by 16.66% (Muthoot) and 40% (Manappuram) respectively.

The option ‘Fair’ was selected by 10% (Muthoot) and 23.34% (Manappuram) respectively.

It was suprising to see 3.33% of Manappuram’s respondents believed that the infrastructure facility provided by the organization was bad.

2. Time taken for the whole gold loan procedure?


Table 5.7

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramLess than 5 minutes 4 0 13.33 05- 10 minutes 9 6 30 2011- 30 minutes 15 19 50 63.3331- 60 minutes 2 5 6.67 16.67Others (Please mention) 0 0 0 0

fig. 5.7

Muthoot Response

Less than 5 minutes5- 10 minutes11- 30 minutes31- 60 minutesOthers (Please mention)

fig. 5.8

Manappuram Response

Less than 5 minutes5- 10 minutes11- 30 minutes31- 60 minutesOthers (Please mention)

INTERPRETATION


The above pie diagrams represents one of the main factors which decides the fate of any gold loan financing company i.e. time taken for clearing a gold loan.

13.33% of Muthoot’s respondents believed that it takes less than 5 minutes for the whole gold loan procedure. But this option was not at all selected by any of the Manappuram’s respondents.

Those respondents who thinks the whole gold loan procedure takes 5- 10 minutes stands at 30% (Muthoot) and 20% (Manappuram).

The option ’11-30 minutes’ was selected by 50% (Muthoot) and 63.33% (Manappuram) respectively.

The option ’31-60 minutes’ was selected by 6.67% (Muthoot) and 16.67% (Manappuram) respectively.

None of the respondents believe that the whole gold loan procedure takes more than 1 hour.

3. How satisfied are you with the security standards of Muthoot Finance Limited Manappuram General Finance and Leasing Limited?


Table 5.8

Opinion Muthoot Response Manappuram Response % of Muthoot % of Manappuram100% 2 0 6.67 0

80- 99% 12 14 40 46.6760- 79% 9 8 30 26.6640- 59% 6 6 20 20

>40% 1 2 3.33 6.67

fig. 5.9

100%

80- 99%

60- 79%

40- 59%

>40%

0 2 4 6 8 10 12 14 16

Manappuram ResponseMuthoot Response

INTERPRETATIONThe above bar diagram is also another important determinant of a gold financing company’s success.

It is interpreted that 6.67% of Muthoot’s respondents are 100% satisfied with their security standards while none of the Manappuram’s respondents are fully satisfied with the company’s security standards.

It is also interpreted that 40% (Muthoot) and 46.67% (Manappuram) of the respondents are 80% - 99% satisfied with the security facilities.

Those respondents who trusted Muthoot’s and Manappuram’s security standards 60% - 79% stands at 30% and 26.66% respectively.

Both the institutes had 20% of the total respondents who believed that the security standard was 40% - 59% trustable.

Both the institutes had 3.33% (Muthoot) and 6.67% (Manappuram) of the total respondents who believed that the security standard was less than 40% trustable.

4. How did you come to know about Muthoot, Manappuram and its facilities?

Table 5.9


Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramNewspapers 9 6 30 20Journals and Magazines 5 3 16.67 10T.V Advertisements 11 12 36.67 40Notice 2 5 6.66 16.67Friends and relatives 3 4 10 13.33Others (Please specify) 0 0 0 0

fig. 5.10

Muthoot Response

NewspapersJournals and MagazinesT.V AdvertisementsNoticeFriends and relativesOthers (Please specify)

fig. 5.11

Manappuram Response

NewspapersJournals and MagazinesT.V AdvertisementsNoticeFriends and relativesOthers (Please specify)

INTERPRETATION

The 1st pie diagram shows the mediums through which the public came to know about Muthoot Finance Limited while the 2nd pie diagram shows the same for Manappuram General Finance and Leasing Limited.


Here, it is interpreted that newspaper as a medium penetrates about 30% for Muthoot and 20% for Manappuram.

The main medium of advertising for both the companies is T.V. advertisements which stand at 36.67% for Muthoot and 40% for Manappuram

Other sources like journals and magazines- Muthoot (16.67%) and Manappuram (10%), notice- Muthoot (6.66%) and Manappuram (16.67%), friends and relatives- Muthoot (10%) and Manappuram (13.33%) also play vital roles in penetrating the market share for both the companies.

5. Taking into consideration, the recent fluctuations of gold rates. Do you think Muthoot Finance and Manappuram Finance are successful in providing effective gold loans?

Table 5.10

Opinion Muthoot Response Manappuram Response % of Muthoot % of Manappuram


Strongly agree 7 3 23.33 10Agree 14 14 46.67 46.67Neutral 6 9 20 30Disagree 3 4 10 13.33Strongly disagree 0 0 0 0

fig. 5.12

Muthoot Response

Strongly agreeAgreeNeutralDisagreeStrongly disagree

fig. 5.13

Manappuram Response

Strongly agreeAgreeNeutralDisagreeStrongly disagree

INTERPRETATION

It is interpreted from the above 2 pie diagrams that a majority of the respondents (46.67%) both of Muthoot Finance as well as Manappuram Finance agrees to the fact that both companies were able to provide effective gold loans even after the recent fluctuations in gold rates.


Those respondents who strongly agree to this fact constitute 23.33% and 10% of the respondents of Muthoot and Manappuram respectively.

20% (Muthoot) and 30% (Manappuram) opted for neutral while rest 10% (Muthoot) and 13.33% (Manappuram) disagreed to this fact.

6. In case of default, Does Muthoot Finance and Manappuram Finance assist by providing long payback period?

Table 5.11

Opinion Muthoot Response Manappuram Response % of Muthoot % of ManappuramStrongly agree 12 5 40 16.67Agree 14 16 46.67 53.33


Neutral 4 9 13.33 30Disagree 0 0 0 0Strongly disagree 0 0 0 0

fig. 5.14

Strongly agree Agree

NeutralDisagree

Strongly disagree

02468

10121416

1214

4

00

5

16

9

0 0

Muthoot Response Manappuram Response

INTERPRETATION

Here, it is interpreted a majority of the respondents agrees that both financial institutions assist by providing long payback period.

This was closely followed by the opinion that the respondents strongly agrees that both financial institutions assist by providing long payback period.

Followed by neutral with 13.33% (Muthoot) and 30% (Manappuram)

MUTHOOT V/S MANAPPURAM

1. RATE OF INTEREST

Table 5.12


Name of institute Muthoot Finance Manappuram Finance

Interest rate (% p.a.) 12.0-24.48 12.0-28.08

Financing (In %) 60-80 88-93

Maximum loan amount 1,00,00,000 1,00,00,000

Max Tenure (In years) 0.25 1

Interest rate type Fixed Fixed

The above table is a very important determinant of in the comparative study of gold loans offered by Muthoot and Manappuram.

2. BRANCHES IN KOLLAM

Muthoot (95):

AlimukkuAnchalAnchalmoodAyurAnandavallewaramAnchal- Market Jn.ArumurikadaBharanikavuChakkuvallyChandanathoppuChatannoorChavara- ThekkumbaghamChamakkadaChannapettaChavaraChengamanadCherumooduEdappallykottaEnathu


KadakkalEast kalladaElampalEzhukoneKadappakkadaKalayapuramKannanelloorKaravaloorKarunagapally 2KalluvathukkalKaralimukkuKaricodeKarunagapally TownKarunangapally MergedKilikollurKottarakkaraKottarakkara- Hospital JnKeralapuramKizhakketheruvuKottarakkara- City branchKottarakkara MarketKottiyamKulathupuzhaKunnicodeManapallyKulakkada EastKundaraMadhatharaMayyanadMukkadaMynagappallyNedumancavuNilamelMulavanaNallilaNellikunnamOchiraOdanavattomPallimukkuParankimammukalPathanapuramOyoorPanicker kadavuParippally


PathanapuramnedumparampuPattazhiPolaithodePoreekkalPunalur thookkupalamPerumpuzhaPooyappallyPunalurPunnalaPunthalathazhamPuthoorRandamkutty Jn. (2nd mile stone)South paravoorPuthicavuRamankulangaraRoaduvilaSakthikulangaraSasthamkottaThadicaduThazhavaThuvayurSooranad patharamThattamalaThevalakkaraVadakedathukavuVadayattukottaValakomVelichikkalaYeroorVaddyVallikkavuVeliyam

Manappuram (27):

AnchalAnchal MooduAyur


BharanikavuChandanathoppuChathannoorKadakkal KadappakkadaKaricode KarunagapallyKollamKottarakkara Kottiyam KulathupuzhaKundaraNellimukkuNilamel Ochira OdanavattomPallimukku Pathanapuram PunalurPunnala Puthoor RamankulangaraSouth ParavoorThattamala

The above list of the names of branches of both institutes shows that Muthoot has a far superior lead over its rival Manappuram in terms of number of branches within Kollam district.

DATA COLLECTED FROM SECONDARY SOURCES

Table 5.13


The above chart shows the Estimated Gold Portfolio of the different gold loan providers in India.

It is interpreted that Muthoot Finance is 1st with an estimated portfolio of Rs. 7,342 Crores in F.Y. 2009- 10.

Manappuram Finance which has shown a steady growth in the past few years still lags behind Muthoot Finance in the 2nd position with an Estimated Gold Portfolio of Rs. 2,560 Crores.

Table 5.14

Net NPA / Net Loans (%)

2008 2009 2010

Manappuram Finance

1.6% 0.94% 0.49%

Muthoot Finance

0.47% 0.57% 0.56%

Market Share 2008 2009 2010

Manappuram Finance

3.7% 4.9% 6.8%

Muthoot Finance

11.0% 13.4% 19.5%

Manappuram/ Muthoot

2.97 2.73 2.87

The above table was compiled from figures collected from the financial report of Muthoot Finance and Manappuram Finance.


It is interpreted that Manappuram's earlier higher NPA's had to do with vehicle loans. NPA's strictly on gold loans are much lower than that of Muthoot Finance.

Muthoot seems to be doing a good job based on ROE. It's advantageous to Manappuram if Muthoot can't raise capital.


CHAPTER VIFINDINGS,

SUGGESTIONS AND CONCLUSION


6.1 FINDINDS

The present study “Comparative study on gold loan provided by Muthoot finance and its competitor (Manappuram finance)” is conducted considering both primary and secondary data. The major finding of the study can be summarized as follows:

The management and employees of both the companies maintains a good relationship.

Most of the respondents (58.33%) have monthly income range between Rs.5000 – Rs 10,000.

Media advertisement has an important role in spreading popularity of both companies among public i.e. 36.67% (Muthoot) and 40% (Manappuram) respectively.

Majority of the respondents’ have the opinion that the behaviors of both company’s staff are cordial and friendly.

Majority of the customers were satisfied with the services, hence there was no need of complaints to be lodged.

NBFCs score over banks on two fronts despite charging higher interest — quick approval and disbursal of loans, and less documentation. An NBFC at the most takes 30 minutes to give the loan after verifying the gold, and the only document required is an identification proof of the person pledging the gold.

It was also found that customers of both the companies are more than satisfied with the security standards on their gold jewellary.

It was indentified from the customer response that both companies were successful in proving effective gold loans even after the recent fluctuations in the prices of gold.

The study was also aimed at finding best gold loan financing company. After analyzing and interpreting the data collected through primary and secondary sources, the following conclusions were made:

The estimated gold loan portfolio of Muthoot Finance Limited (7,342 Crores) is far superior to Manappuram General Finance and leasing Limited (2,560 Crores) which indicate the sound market position of Muthoot Finance Private Limited.

It was also interpreted that Muthoot Finance Limited has more regular customers than Manappuram General Finance and Leasing Limited. This is an important indicator of the bigger market base that Muthoot Finance Limited has over his closest rival Manappuram General Finance and Leasing Limited.

The interpretation of data also indicated that the public are more satisfied with the interest on gold loan offered by Muthoot Finance Limited over Manappuram General Finance and Leasing Limited. This might be a result of its experience in the gold loan market and its objective to provide gold loans at cheaper and affordable rates.


Another important finding was presence of Muthoot throughout the country as well as aboard. Although Manappuram is on a branch establishment drive it still lacks in the number branches per area.

The graph 5.4 shows neck to neck competitions between the two gold loan giants to satisfy the customers. Here it is difficult to differentiate the two and find the best on staff behavior.

The graph 5.5 is also a clear indicator of the close competition between the two institutes on the requirements for a gold loan as well as the whole gold loan procedure.

It has been interpreted that Manappuram General Finance and Leasing Limited lacks a little bit on the infrastructure side of business. Muthoot being the more established among the two knows the infrastructure requirements to grow in this industry.

The pie charts 5.7 and 5.8 are very important to any gold loan financing companies. It indicates that the time taken for the whole gold loan procedure is very less compared to Manappuram General Finance and Leasing Limited. This gives Muthoot an all important edge over Manappuram.

This graph 5.9 shows the satisfaction of customers on the safety provided by the two institutes on their gold. Here too, Muthoot has an important edge over Manappuram on the safety of the securities according to the public opinion.

It was also interpreted that Muthoot Finance was successful in providing long pay back periods to its customers. This is also an another reason for its success in this industry.

6.2 SUGGESTIONS


6.2.1 FOR MANAPPURAM FINANCE

They should take up more promotional measures to increase the market share of their products.

They should concentrate on expansion plans and open new branches in unexplored areas.

Manappuram should work on improving their gold loan processing time.

Infrastructure facilities should also be improved and should be of international standards to compete with Muthoot Finance.

Security standards and Interest rates are the other areas where Manappuram Finance should work on.

6.2.2 FOR MUTHOOT FINANCE

Muthoot should work on its marketing strategies to improve its market share.

Most of the people are unaware of the different financial products offered by Muthoot. So the company should take necessary steps to create awareness among the public.

The company can also give attractive offers to old customers as well as prospective new customers.

The company can also look into new ventures as it has established itself as the leader in gold loan financing field.

Muthoot should also speed up its process in offering IPO as it lags behind Manappuram which has already came up with IPO’s.

6.3 CONCLUSION


The comparative study between gold loan offered by Muthoot Finance and Manappuram Finance was aimed at finding out the reasons which makes these two companies stand out among other gold loan financing companies and also to identify the best gold loan provider among these two financing giants.

It helped me to find out the different factors responsible for the success of these two companies.

The major finding that can be concluded from this study is that Muthoot Finance Limited is still the best gold financing company in India and its toughest competitor- Manappuram General Finance and Leasing Limited still lacks in many areas although it has grown rapidly in the past few months and given Muthoot a run for its money.

This experience has helped me gain knowledge about the business of gold loan financing in India.


CHAPTER VII LIMITATIONS OF THE STUDY

7.1 LIMITATIONS


Time allowed for the study was not sufficient.

A sample survey was selected.

The data provided by the respondent may not be correct or accurate.

Some of the samples selected for the study did not respond properly to the

questionnaire. However proper care had taken to make the analysis and interpretations

more meaningful.

Questionnaires are impersonal, this means that it may be difficult to understand

answers and thus to act on them. Also, there is a chance that the question may be

misinterpreted, rendering the answer useless.

Questionnaires also invite people to lie and answer the questions very vaguely which

they would not do in an interview.

Open questions can take a lot of time to collect and analyse.

People are not always willing to fill questionnaires in so they may just throw them

always.

Sometimes questions used are too standardised (closed) so some peoples preferred

answers may not be included, and this also does not allow for much detail.

Peer pressure of embarrassment may cause people to not want to answer certain

questions, or they may want to impress the researcher and fabricate the truth by filling

in untrue answers, making questionnaires unreliable and sometimes invalid.

BIBLIOGRAPHY

BOOKS


Philip Kotler, “Marketing Management” ”, Prentice- Hall of India, New Delhi, 8 th

Edition, August 1994

JOURNALS

17th Annual Report of Manappuram General Finance and Leasing Limited

Draft Red Herring Prospectus of Muthoot Finance Limited issued on 30 th September 2010

WEBSITES

http://www.muthootfinance.com/

http://www.manappuram.com/

http://www.thehindubusinessline.in/2010/11/27/stories/2010112751420600.htm

http://www.theequitydesk.com/forum/forum_posts.asp?TID=2635&PN=1


http://www.theequitydesk.com/forum/forum_posts.asp?TID=2635&PN=1

http://www.thehindubusinessline.in/2010/11/27/stories/2010112751420600.htm

http://www.manappuram.com/

http://www.muthootfinance.com/

GOLD LOAN MARKET SURVEY QUESTIONNAIRE FOR MUTHOOT FINANCE

1. Name of the customer:

2. Age:

3. Occupation:

4. Sex: Male Female

5. Monthly salary:


a) Once b) 2- 5 timesc) 6- 10 timesd) More than 10 times

7. As per the scale below, rate the following factors of Muthoot Finance Limited:


I. Rate of interest :II. Location of the institute :

III. Staff behavior :IV. Gold loan application procedure:V. Infrastructure facilities :


a) Less than 5 minutesb) 5- 10 minutesc) 11- 30 minutesd) 31- 60 minutese) Other (Please mention) ________________

9. How satisfied are you with the security standards of Muthoot Finance Limited?

a) 100%b) 80-99%c) 60-79%d) 40-59%


e) >40%

10. How did you come to know about Muthoot Finance Limited and its facilities?

a) Newspapersb) Journals and Magazinesc) T.V. Advertisementsd) Noticee) Friends and relativesf) Others (Please specify)

11. Taking into consideration, the recent fluctuations of gold rates. Do you think Muthoot Finance was successful in providing effective gold loans?

12. In case of default, Does Muthoot Finance assists by providing long payback period?

13. Why do you prefer Muthoot Finance Limited over other Gold loan institutes and Government organisations?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

14. Any complaints about Muthoot Finance Limited?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

15. Any suggestions to improve the services offered by Muthoot Finance Limited?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Date:

Signature:


GOLD LOAN MARKET SURVEY QUESTIONNAIRE FOR MANAPPURAM FINANCE

1. Name of the customer:

2. Age:

3. Occupation:

4. Sex: Male Female

5. Monthly salary:


a) Once b) 2- 5 timesc) 6- 10 timesd) More than 10 times

7. As per the scale below, rate the following factors of Manappuram General Finance and Leasing Limited:


I. Rate of interest :II. Location of the institute :

III. Staff behavior :IV. Gold loan application procedure:V. Infrastructure facilities :


a) Less than 5 minutesb) 5- 10 minutesc) 11- 30 minutesd) 31- 60 minutese) Other (Please mention) ________________

9. How satisfied are you with the security standards of Manappuram General Finance and Leasing Limited?

a) 100%b) 80-99%c) 60-79%


d) 40-59%e) >40%

10. How did you come to know about Manappuram General Finance and Leasing Limited and its facilities?

a) Newspapersb) Journals and Magazinesc) T.V. Advertisementsd) Noticee) Friends and relativesf) Others (Please specify)

11. Taking into consideration, the recent fluctuations of gold rates. Do you think Manappuram Finance was successful in providing effective gold loans?

12. In case of default, Does Manappuram Finance assists by providing long payback period?

13. Why do you prefer Manappuram General Finance and Leasing Limited over other Gold loan institutes and Government organisations?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

14. Any complaints about Manappuram General Finance and Leasing Limited?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

15. Any suggestions to improve the services offered by Manappuram General Finance and Leasing Limited?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Date:

Signature:


boney hector d'cruz (am.ar.u3com08013)- final project

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