impact of promotional activities on selling hffc products

A PROJECT REPORT ON

IMPACT OF PROMOTIONAL ACTIVITIES ON SELLING HFFC PRODUCTS

AT

SUBMITTED BY

THIRUMANI. KRUSHI KUMAR

(REG. NO. 15/109, 2015-17)

Submitted in fulfillment of the requirement of award of PGDM degree at

ICBM - SCHOOL OF BUSINESS EXCELLENCEPlot No. 2A, "Ishwar's Abode", Upperpalli 'X' Roads, Hyderguda P.O,

Hyderabad - 500 048, Tel: 040-65536834, www.icbm.ac.in

ICBM-SCHOOL OF BUSINESS EXCELLENCE 0

http://www.icbm.ac.in/

CERTIFICATE

This is to certify that the project report title “IMPACT OF PROMOTIONAL ACTIVITIES

ON SELLING HFFC PRODUCTS” submitted in partial fulfillment for the award of PGDM

Program of ICBM- SCHOOL OF BUSINESS EXCELLENCE, Hyderabad was carried out by

THIRUMANI.KRUSHI KUMAR (15-109) under my guidance. This has not been submitted to

any other university or Institution for the award of any degree/diploma certificate.

Prof. Qutubuddin khaja Prof. S. Zarar

(Internal Guide) (Principal)


DECLARATION

I THIRUMANI.KRUSHI KUMAR, student of ICBM-School of Business Excellence,

Hyderabad, hereby declare that this project report entitled “IMPACT OF PROMOTIONAL

ACTIVITIES ON SELLING HFFC PRODUCTS” is a bonafide record of work done by me

during the course of summer internship project work of PGDM program and all contents and

facts are prepared and presented by me without any bias.

I also declare that it has not been previously submitted for the award of any degree/diploma,

associate ship, fellowship or other similar title, of any University, Institute or Society.

Date:

Place: Hyderabad THIRUMANI. KRUSHI KUMAR


ABSTRACT

The purpose of the study is to determine the impact of promotional activity for selling HFFC

products in Hyderabad city only. Promotion is comprehensive terms, and covers the entire gamut

of advertising, publicity, public relations, personal selling and sales promotion. The personal

selling promotional strategy was applied by HFFC to promote their products and boost up its

sales.

The HFFC performed promotional activities like canopy, metro cash & carry, connectors , no

parking boards, paper inserts, pole broads mela’s. In the present competitive world if any

business organization has to survive it needs to keep an eye on various forces operating in the

market. More over competitors constantly try to win over others. In this scenario, every business

organization needs to monitor the changes taking place in the market so that they are not caught.

Market research is an efficiency tool in the hands of a marketer that helps him to take changes

taking place in the market.

The promotional activities like canopy shows and broachers distribution were carried out at main

locations like uppal and kukatpally metro cash and carry. In this activity we have given live

attention towards customers and explained about our products and handling there queries

regarding the Products.


ACKNOWLEDGEMENT

A project report is never successfully completed without the guidance and mentorship of a few

people. So, I take this opportunity to express my sincere gratitude towards all those, who have

helped me in this endeavor.

I take the opportunity to express my sincere gratitude to Chairperson Dr.Ritu zarar and

Prof. Shamshuddin Zarar, Principal of ICBM-SBE for their perseverance and attention

extended to over the course of the PGDM program. I express my humble and deep in debtness to

Prof. Jitender Govindani, Director (Academics) ICBM-SBE whose guidance and

encouragement proved to be a source of inspiration to do my best in this project.

I am extremely grateful to Mr. Manoj vishwanth, CEO, HOME FIRST FINANCE

COMPANY (HFFC), for providing an opportunity to gain valuable practical experience in the

company, by undertaking the current study.

Special thanks goes to my mentor Qutubudhin Khaja, Dept. of Marketing, ICBM-SBE for

providing me much needed information and giving me direction which paved the way for the

completion of the project.

I am also thankful to entire faculty and staff of ICBM-SBE, Hyderabad for directly or indirectly

supporting my research work.

Last, but not the least, my heartfelt appreciation to my parents who have instilled in me a strong

work ethic and the drive to excel in all my goals and endeavors.

THIRUMANI. KRUSHI KUMAR


INDEXCHAPTE

R

TITLE PAGE No.

1 EXECUTIVE SUMMARY 8-9

2 INTRODUCTION Objectives of the study Need of the study

10-12

3 LITERATURE REVIEW 13-294 RESEARCH METHODOLOGY 30-31

5 DATA ANALYSIS & INTERPRETATION 32-46

6 CONCLUSIONS 47-48

7 LIMITATIONS & FUTURE DIRECTIONS 49-50

8 BIBLIOGRAPHY 51-52

9 APPENDICES Questionnaire Industry Profile Company Profile

53-86


CHAPTER-1


EXECUTIVE SUMMARY

TITLE OF THE PROJECT

“IMPACT OF PROMOTIONAL ACTIVITES ON SELLING HFFC PRODUCTS”

A study on the promotional activities, how it influenced on selling the products of HHFC. What

marketing strategies used by the HFFC company. In this project how much the HFFC Company

has the market share and how the people know about this company? The promotional activities

used by the company like connectors i.e. tie-ups’ with the middle men for the prospecting

customer by giving them some incentive. Connectors are like hardware, granites & marbles

outlets, and kirana stores where the foot fall is more.

STATEMENT OF PROBLEM

Here, many consumers do not patronize a company’s product when they are ignorant of

its existence. Insufficient and inadequate use of marketing communication tools lead to low sales

turnover. Given the competitive pressure attributable to escalating cost, increased industrial

concentration as the result of acquisitions and mergers, the threat of product obsolescence

inherent in accelerating technological innovation.

There has been a sharp increase in the number of housing loans products with different

schemes, thus leading to competition and this competition is becoming fierce and cutthroat. In

fact, the creation of effective promotional strategies would be an essential step towards creating a

marked.

Customers find it difficult to make repeat purchase of a product whose communication is

not motivating and captivating.

After analyzing the data of the study, concluded that the promotional activities of HFFC

should be more increase in every aspects. At present only (8%) are people are know about the

products of HFFC.


CHAPTER-2


INTRODUCTION

This chapter explains about the background and states the objectives of the project. The

purpose of the study is to determine the impact of promotional activity for selling HFFC

products in Hyderabad city. Promotion is comprehensive terms, and covers the entire gamut of

advertising, publicity, public relations, personal selling and sales promotion.

The HHFC performed promotional activities like canopy, road connectors tie ups, mela’s,

metro cash and carry, paper inserts, no parking boards, broacher, etc. In the present competitive

world if any business organization has to survive it needs to keep an eye on various forces

operating in the market. More over competitors constantly try to win over others. In this

scenario, every business organization needs to monitor the changes taking place in the market so

that they are not caught. Market research is an efficiency tool in the hands of a marketer that

helps him to take changes taking place in the market.

OBJECTIVES OF THE STUDY:

To understand the promotional activities done by HFFC company to increase sales of the products

To find out the effectiveness of promotional strategies of HFFC product

To analyze the level of awareness among the public about HFFC products

To access the promotional activities in various place mela’s, middle men, connectors.

To conduct positive and constructive solutions & suggestions to improvise the existing promotional activities being done by HFFC


NEED FOR THE STUDY:

HOME FIRST FINANCE COMPANY INDIA PVT. LTD. is the new company in the east

Mumbai region in the housing loans segment... But now with the increasing competitors from

private sector in housing loan industry the company has failed to increase its market share.

The company has made the attempt to increase the sales through some promotional activities like

advertisements through papers inserts in news paper, No parking boards, pole boards, connectors

tie-up’s. Through these promotional activities the company wanted to capture the customers who

are not aware of HFFC Company.


CHAPTER-3


LITERATURE REVIEW

Marketing

Every organization works with certain objectives and these are to be achieved. To achieve

the pre-decided objectives a number of activities are to be performed. It is not necessary that one all

organizations would perform one type of activities. The activities may include production,

marketing, human resource, finance, transportation, service, research, logistics, purchasing, and

storage, trading, assembling, distribution and others. These activities are performed and these are

related to each other so that the objectives can be fulfilled effectively. Similar way the marketing

activities are performed in some of the company those are interested in marketing the products or

services for use of customers.

Marketing is one of the important activities of an organization. It is through marketing the

products or services of the company are reaching to the customers. The company gets the money

back when the products are sold out in the market. So the business cycle keeps on going further. It is

necessary to work in close coordination with production. Production alone is not going to serve the

purpose. Production without marketing become useless for the company and marketing without

production is not possible. Similarly, marketing is related to other activities like finance, research and

human resource activities. So the main concerned here is with the marketing activities.

Marketing is the process by which companies create customer interest in goods or

services. It generates the strategy that underlies sales techniques, business communication, and

business developments. It is an integrated process through which companies build strong

customer relationships and create value for their customers and for themselves.

The term marketing concept holds that achieving organizational goals depends on

knowing the needs and wants of target markets and delivering the desired satisfactions. It

proposes that in order to satisfy its organizational objectives, an organization should anticipate

the needs and wants of consumers and satisfy these more effectively than competitors.

Marketing is a very important activity for the organization. In marketing a lot of sub

activities are performed. Marketing includes the activities like identification of demand, research,

market segmentation, product development, launching of products, modification of products,

deletion of products, product design, pricing, different types of pricing, promotion of products

and services, sales promotion, personal selling, publicity, public relations, adverting, distribution


of products and services, consumer behavior, internal and international market coverage,

branding, packaging, labeling and many other activities. It is very difficult to have clear idea

regarding marketing activities.

In the research study the topic is related to promotion of products. The focus is there on

promotional activities of the products in FMCG sector in India and mainly sales promotion

strategies of the companies dealing in FMCG products in the markets. Every company is

interested to market its products or services to earn its profit. For this promotion the awareness is

to be created among the customers. Without creating awareness the customers would not come to

know about the company existence in the markets, products and services they produced and

features of their products and services. The messages regarding the products, company, features

of their products and services are to be communicated by using different promotion methods.

One of the methods is sales promotion and it covers the scope of the study.

According to Chu-Mei Liu (Assistant Professor, Department of International Business, Kai Nan

University, Taiyuan, Taiwan, ROC)

Branding is important to manufacturers, retailers and consumers. Brands with higher brand

equity have higher sales. The growth of mobile phone subscriptions is considerably faster in the

Philippines. Advertising and promotion are undertaken through cooperation between the service

providers and mobile phone manufacturers. The study tries to find out the effects of the different

activities on consumer choice of mobile phone brands. A total of 800 respondents participated in

the survey. Results of the stepwise regression analysis indicate the initial effect of advertisements

of service providers is felt during the third iteration but moved during the next iteration phase.

The consumers relate information about the service provider with a combination of brand

concept and unit usage flexibility. The relationship of variable to choice is significant with only

price upward difference with current model showing an inverse relationship and the brand

concept commanding the highest positive contribution.

Elements of Marketing Mix

Marketing mix is the combination of the elements of marketing and what roles each

element plays in promoting products and services and delivering those products and services to

the customers. The elements of the marketing mix are also referred to as the 5 P's of marketing.

In the beginning for years together marketers accepted the 4 P's of marketing. The experts have


added the fifth P recently and that is people. Now, there are five P”s of marketing mix. These Ps

are called elements of marketing mix. These are elaborated further in the next paragraph. The

original 4 P's of marketing along with the fifth P added to marketing mix are:

(a) Product

The product is a combination of tangible and intangible aspects of the products offered by

the manufacturer to the customers. It can be defined as a bundle of satisfaction and

dissatisfactions offered by company to the customers at a point of time. Their physical attributes

what they do, how they differ from your competitors and what benefits they provide. The

products can be classified as durable and non durable, consumers and industrial goods,

perishable and non perishable, finished and semi-finished etc.

(b) Price

Price means the monetary value of the product has been fixed for exchange purpose. The

price is the amount a customer pays for the product. It is fixed after considering various factors

such as market share, competition, material costs, product identity and the customer's perceived

value of the product.

The business may increase or decrease the price of product if other stores have the same

product. It is through price the company gets its money back in business. It should be fixed in

such a way the company is in position to recover the costs and earn profits also. If it is fixed very

low then it may be difficult to come to the breakeven point and if fixed very high then it may

have deterrent effect on the sale.

(c) Promotion

The promotion concept is applied for products or services and to the business. The

promotion include all communications a marketer used in the market for his products of services

to create awareness, persuade the customers to buy and retain in future also. For improvement in

the position of sales or progress of business this method is used.

The message is given to target group regarding the features and benefits of the products

or services to the target customers. Without communication the features, benefits and schemes

would not be known to the customers and objectives of in launching of products or services and

increasing sates would not be completed. When communication creates awareness then only the


interest would be created and customers would take the decision for buying. For promotion

different methods of communication can be used.

(d) Place

Place represents the point or location where the product is made available to purchase. It

is required that the products and customer should be available at a point then only the sales

would be possible. If not then the sale does not taken place. This term is used for distribution

channel. It can include any physical store as well as virtual stores on the Internet. Place is not

exactly a physical store where it is available Place is nothing but how the product takes place or

create image in the mind of customers. It depends upon the perception of customers. The

products or services should reach to the customer that channel is called distribution channel of

placement.

These above mentioned elements of marketing mix are only for products. With the

development of service sector in every economy, the marketing of services is also needed. Due

to this the elements of marketing mix for service have been extended. The three more elements

for service have been added. These are:

(e) People

The services are being provided with the help of employees and to the customers. There

is direct contact for delivery of the services to the customers. The type of people providing the

service matters a lot from business point of view. The people are to be selected, trained and

motivated to keep the customers very happy. So the people are very important for service

marketing. It is to be managed effectively.

(f) Process

For availing a service certain activities are to be performed. For that purpose procedure,

mechanism and flow of activities by which services are delivered are to be decided. Without The

service cannot be delivered properly with uniformity. That would maintain the standard format

for availing the services. This is called process. For example, one wants saving account facility

in a bank then he has to apply for opening an account. After this the pass book, cheque book and

ATM card would be issued and service can be availed after this...


(g) Physical Evidence

There are essential conditions for providing the service. These are two types. One is

internal and another is external. These create the environment in which the service or product is

delivered. For example to provide the hotel service and external evidence required are building,

parking place, gate and a long drive- way. Internal evidence required like counter, telephone,

passbooks, reservation facilities, cigarettes etc. Without this providing hotel service, a question

does not arise.

Peppercorn (2013)presents the following critical factors for development of housing

finance markets: a) Value for money, i.e. maximize the impact of public resources, leveraging

government initiatives with the involvement of the private sector, with the goal of achieving a

higher multiplier; b) Coordination, i.e. ensure the coordination between administrations and

public/private sectors, to maximize the efficiency and effectiveness of the programs; c)Public

sector role, i.e. from provider to enabler of housing; and d)Inclusive housing finance, i.e. include

non-salaried borrowers. According to Peppercorn, poorer households tend to borrow from

informal sources, at higher rates.

According to Kannan Srinivasan (2001)

The authors investigate whether and how pricing and promotional activities influence

prescription choice behavior using a comprehensive panel of physicians and data on competitive

price and promotional activities. The authors find that physicians are characterized by fairly

limited price sensitivity, detailing and samples have a mostly informative effect on physicians,

and physicians with a relatively large number of Medicare or health maintenance organization

patients are less influenced by promotion than other physicians are.


PROMOTION Introduction

Generally, promotion is communicating with the public in an attempt to create awareness

and persuade them toward buying products and/or services. The word promotion is also used

specifically to refer to a particular activity that is intended to promote the business, product or

service. A store might advertise that it's having a big promotion on certain items, for instance, or

a business person may refer to an ad as a promotion. Promotion means a method is used for

getting people to create awareness among people about products or services being offered by the

company.

Advertising, public relations, point-of-sale displays, and word-of-mouth promotion are all

traditional ways for promotion. Promotion is the method for providing the link of information

between the seller and prospects of the products or services... The choice of a promotional

strategy will be dependent upon objectives, type of offers, budget, and availability of said

promotional vehicle. The other concept used for promotion is called marketing communication.

When any communication is given in the market with the help of any media is called

marketing communication. The requirement of promotional activities in the market is increasing

with increasing competition level. In past, the need for promotional efforts was not there at all.

The demand for promotional efforts increased slowly and in present time without promotional

efforts the business cannot be carried out effectively as per plans of the company. Especially care

is to be taken. In some of the leading companies there are difference sections taking care of

different tools for promotion separately. Further, the role of promotion relating activities would

be increased. The importance of promotion would be very high in near future in the global

scenario.

Meaning of Promotion

The concept of promotion has been defined by experts as follows:

(a) Promotion is defined as the coordination of all seller-initiated efforts to set up channels of

information and persuasion to sell goods and services or promote an idea. Promotion is best

viewed as the communication function of marketing. In short we can say that the strategy to get

hike and to create awareness.


(b) It is not enough for a business to have good products sold at attractive prices. To generate

sales and profits, the benefits of products have to be communicated to customers. In marketing,

this is commonly known as "promotion".

(c) Promotional marketing is a business marketing strategy designed to stimulate a customer to

take action towards a buying decision. Promotional marketing is a technique that includes

various incentives to buy such as advertising, sales promotion, personal selling, publicity and

packaging.

The Marketing Management -By PHILIP KOTLER, which is one of the masterpieces in

the field of marketing, has given an excellent coverage in the various fields of marketing. The

author has very elaborately examine the various issues in designing the marketing strategies for

various companies, tactical marketing and also the hurdles that arises in the administrative side

of marketing which were all very much useful in analyzing the various problems of this research

study and finally in also putting forth various feasible recommendation and suggestion for this

research work. This book has also presented various frameworks for analyzing certain recurrent

problem in the field of marketing, which were also effectively used in this research work.

The RESEARCH MARKETING, By McGauran L.L. gives more stress on the various

categories of information that should be collected for carrying out the preliminary investigation

for the various research studies. The author McGauran L.L. gives importance to six categories of

information that to be used for preliminary investigation namely

a. the product b. the company, industry and competition c. the market d. the channel of distribution

e. the sales

f. the sales promotion policies.

PROMOTION MIX

For selling the products or service the marketing department is using a number of methods. The

objective is to create awareness, remind the customer to persuade and but the products. The

company is interested to increase the sales and profits of the company in the market. The market

may be different for different products and service.


Elements of Promotion Mix

(a) Advertising

Advertising is a one method of presenting message to persuade an audience to purchase or

take some action upon products, ideals, or services. Any paid form of non-personal presentation

of ideas about products or services in the media by and identified sponsor.

The advertisement is given by using the brand name of the products or services and their

benefit to users are highlighted. The media used for communication includes television radio,

newspapers, magazines, billboard posters, periodicals, cinema etc. In one effort through

advertisement the message reaches to a large number of customers or audience. Advertising is

intended to persuade and to inform. In advertisement by the identified sponsor the message is

designed and given to media for further communication. The sponsor may be company, dealers,

or jointly given the company and dealers.


(I) Objectives of advertising:

The advertisements are placed in the media targeting the audience mainly the prospects

or customers with the objectives to communicate them. When a new advertisement is

placed regarding the company has launched first time and customers do not know about

this. The objective is to create awareness among them. It is through advertisement they

would come to know.

If the customers know then they can be reminded for the existing products or service so

that they should not forget the products and services of the company.

After repeated advertisement, the objective is to persuade them to take buying decision.

The customers have to think when it is reminded repeatedly. One day they have to go for

it whenever they are in need of such products of services.

For existing customers, the further objective of advertisement is to retain them in future

also. They should not think to change over to the new products of other companies. They

are kept informed regarding the new features and benefits of the products time to time.

(ii) Advantages:

Cost-effective with large audiences are covered in one effort on media. It reached to a

large number of audiences through television, radio, newspaper etc. The amount spent in

one advertisement is high but the cost calculated per head per advertisement is less.

The coverage by the mass media is very wide. If we take example of one advertisement

placed on national radio, in one attempt it covers the whole territory of India. It covers all

direction, urban, sub urban and rural area. The coverage is very wide through

advertisement.

Effective method of presentation of ideas about the products or services through audio

video feature. With both audio and video the message can be explained with very high

degree of clarity. The objective of communication is served properly.

It has the ability to create images and symbolic appeals to the target audience. It can be

related to certain situations to explain the message effectively so image can be created in

mind of audience.


In advertisement the message is placed by the company or advertising agency on behalf

of the company. Whenever they want to review the message it can be done easily. They

have proper control over the message in advertising.

(iii) Disadvantages:

Costly, particularly television: When the cost per audience is calculated with radio, it is

higher side. For repeated advertisements the budget for advertising is very high. Some of

the medium companies may not like to go for this type of advertisements.

Difficult to determine effectiveness: The advertisements are placed in different media for

audience. On this a huge amount is spent but it has become difficult to measure the

effectiveness that how much is the effect on sales, customers perception etc.

Alone advertisement cannot sell the products to the customers without supply of products

to the customers or dealers. It cannot work alone.

It is bit difficult to trust because many times false advertisements are given by the

unidentified sponsors. The false claims are done through advertisement and that misguide

the customers. The credibility of advertising is not very high in the markets.

When the critical analysis of advertising is done on the basis of its advantages and

disadvantage, then it can be said the advertising is very useful for promoting the products

or services of the company in the markets. It can be concluded that despite of its

limitations it is needed in the present time of competition.

(b) Sales Promotion

Sales promotion is one of the promotional mixes other than advertising, publicity/public

relations and personal selling. The efforts are put to increase the sales by motivating everyone

whoever in involved in the sales of the products.

The major parties involved in the sales are salesmen, dealers and customers. The sales

promotion efforts are targeting them to stimulate them to buy through different incentives or

benefits. The objective of promotional efforts is short term. When the company is interested to


increase the sales of the products or services the different methods are being used.

When efforts are there other then advertising and personal selling is called sales promotion.

Marketing efforts through which the targeted parties are stimulated to buy the products for extra

value or incentive. These efforts can be targeted to salesmen, customers and dealers to increase

sales in short term.

The sales promotion activities can be divided as customer oriented, trader oriented and sales

force oriented. Through sales promotion tool the extra benefits are provided to the targeted group

so that they can be stimulated to buy the products and increase the sales and profits of the

company.

They are to be motivated by providing extra benefits so that the relative worth of their

money is increased. The second party is sales force. They need to be motivated so that they put

their best efforts so they provide proper link between company and traders and customers and

company. Timely information, support and supply of products are maintained so that the sales

can be increased. When the products are sold through dealers they are needed to be motivated.

(I) Objectives of sales promotion:

To introduce new products: When the company is interested to introduce the new product

in the market the sales promotion method like samples is used. The free samples of the

products are given to the parties for introduction of the product. If the sample is liked by

the customer then the product can be bought in future.

To attract new customers and retain the existing ones: Sales promotion measures are used

with the objectives to attract new customers and retain the existing one by providing extra

benefits. The customers are attracted towards the products that offers price off, discount,

gift, premium prize, etc on buying.

To Increase sales of seasonal products: There are some products like woolen clothes,

rainwear, air conditioner, fan, refrigerator, cooler, room heater, sunscreen lotion, etc. ,

these are used by the customers in particular season only. The demand of these products

is not there is their off season. So the increase the sales of such products the sales

promotion works wonderful. The customers are provided more and additional benefits to

motivate the customers for buying. Thus the sales of seasonal products increase.


The company is using different types of sales promotional methods so that the objectives can be

fulfilled. It is not necessary that at one time all type of methods would be used. For different

parties for different objectives the promotional methods used may differ. It depends up to the

strategy of the company.

(ii) Advantages of sales promotion:

There is very useful for price sensitive customers. It can make good appeal to them. Such

customers wait for sales promotion scheme to buy the products.

Provides extra benefits to the customers through sales promotion schemes and create in

customers to buy the products.

Helps in increasing the sales of the current, seasonal, slow moving, out of use or fashion

products.

Neutralize the competition effects through sales promotion tools.

The profits and sales of the company are increased with the sales promotion tools time to

time.

The effect of this method is direct and can be measured easily on sales after sales

promotion scheme.

It supports the push strategy of promotion. The products are pushed near to the customers

to buy.


It is focusing on short-run effect on sale. The sales are to be increased at a particular point

of time of promotion efforts.

The long term gains are sacrificed for short term gains and do not develop the brand

image of the products and company in the market.

It is suitable mainly for price sensitive customers and such customers become habitual to

buy when sales incentives are given.


(c) Personal Selling

Personal selling is one of the promotional methods used for increasing the sales of the

products or services. In personal selling the salesmen of the company personally meet the

customers, dealers relating to sales. They go directly to the concerned parties when the nature of

the product is such that it cannot be distributed through wholesalers, retailers etc.

The need for salesmen is felt depending upon the nature of the products, distribution

network and policy of the company. In personal selling there is personal presentation by the

firm’s sales force for the purpose of making sales and building customer relationships. Personal

selling is paid personal communication that attempts to inform customers and persuade them to

purchase products or services.

The salesmen approach the customers with all detail information regarding products,

company management, features and benefits of the company, knowledge of customers profile,

products of competitors and other related information. Before meeting the customers the

salesmen prepare the list of prospects, details of prospects, job of salesmen, products features,

management detail, company profile, competitor’s products etc.

Home work is essential for the salesmen for effective selling. He explains all required

information to the customers with the efforts to convince them to buy. If the customers agree

then he takes the order from them. Later on follow up action is also done by the salesmen.

During discussion

When demonstration of the products is required then it is also arranged by the salesmen.

All doubts, fear, anxiety relating to products and company are clarified by the salesmen during

his visits to the customers. The task given to the salesmen is very challenging.

(i) Objectives of personal selling:

To create long term customers relationship with the customers. Through feedback,

problem handling and assurance the company is interested to long term relationship.

To meet the requirement of personal presentation through personal selling. When

demonstration and doubt clarification are required the best suitable method of sales

promotion is personal selling.


To meet the requirement of industrial or heavy price products sales. This type of products

cannot be sold out through dealers, wholesalers or retailers.

(ii) Advantages:

Two way communications under personal selling is very effective.

Face to face communication makes the things very clear and fears, doubts confusions are

avoided on the spot.

Demonstration of products performance is possible in personal selling. This helps in

convincing the customers easily to buy the products.

It gives long term impact on the customers because the assurance is given by the sales

men.

Contributes in developing good relationship and image of the company in markets.


The coverage of sales force is very limited because there is involved of individual

salesmen. So he can cover a limited number of customers in a time.

It is a very expensive method of promotion because the cost involved per customer is

very high in comparison with other methods of promotion.

It is only suitable for high price products only and not for low price or FMCG products.

Heavy budget is needed for personal selling activities. It is not suitable for small and

medium size of the companies.

(d) Public Relations / Publicity

The fourth element of promotion mix is public relation/ publicity. In Public relations

the efforts are put to create and maintaining good public image for products or services,

businesses of the company, non-profit organizations, celebrities, leaders etc. Public relations

is defined as building good relationships with the concerned parties of company out of public

so to create good image regarding products, services and business of the company. The public

should make positive publicity of the company so that adverse situation can be handled in

future.

Public relations convey messages to the target public with the help of the media on

behalf of a client, with the objective to influence the opinions and create favorable image for


products, services and business of the company. The major parties involved in the public are

employees, customers, dealers, bankers, suppliers, consultants and government. The different

messages are given focusing on different target segments.

Public relations convey messages to the target public with the help of the media on

behalf of a client, with the objective to influence the opinions and create favorable image for

products, services and business of the company. The major parties involved in the public are

employees, customers, dealers, bankers, suppliers, consultants and government. The different

messages are given focusing on different target segments. It is very effective when it is

supporting the goal of the organization. It is viewed as a strategic management function.

The advantages of publicity are low cost, and credibility of publicity made is very high. It

gives very good impact on the prospect customers. It spreads very fast.

The disadvantages of publicity are also there. It is very difficult to find out from where

the publicity has originated. It lack of control over the message. If the adverse publicity is

there then it is difficult to control it. It may damage the image of the company. In this

case special care should be there so that the adverse publicity should be avoided.

Selection of Promotion Mix

There are four different methods of promotion methods and each method is having its

own advantages and limitation. Considering strengths and weaknesses of each method and

objectives of promotion the resources are applied to make the efforts of promotion successful.

Out of these for promotion purpose any one or more are to be selected. There is no hard and fast

rule that a particular method is to be selected. The selection is done by considering the

requirement of promotion campaign. The promotion efforts should be very effective. For this

purpose the following factors are to be considered:

Type of products to be sold

(a) Time of selling the products.

(b) Objectives of the company

(c) Promotion budget

(d) Target customers and their locations


(e) Availability of promotion methods.

(f) Methods used by the competitors.

(g) Personal interest of top management.

(h) Product life cycle of the products or services

There may be other reasons for selection of particular methods of promotion. Generally the

leading companies are using two or more or in combination of these methods so that their sales

targets, customers relationship and image of the company etc, are maintained properly. The

company is in position to maintain its position in the market. The selection of promotion mix

must be in position to give the competitive edge to the company over other competitors.


CHAPTER-4


RESEARCH METHODOLOGY

RESEARCH METHODOLOGY:

1) DATA COLLECTION METHODS USED:

Primary and secondary data collected to carry out the research work.

Primary data:

Information was collected directly from the connectors for the project work. The data collected

during the study included the data collected through questionnaire and face-to-face interview

with customers.

Sample Size - 100

Secondary data:

Secondary data includes data collection of information from websites, reviews and Internet

information about housing loans and financial industry.

2) MEASUREMENT TECHNIQUE:

Questionnaire:

Questionnaire is a formalized instrument for collecting information directly from the

respondents. During this research questionnaire was used as tool for getting information from the

connectors in the Hyderabad.

Sampling Method:

The sample is selected based on non- probability sampling method.

Sample size:

Sample size is 100 connectors


CHAPTER-5


DATA ANALYSIS & INTERPRETATION

Connector’s nature of business

TABLE

Steel & cement Hardware kirana stores Others

20 40 26 14

GRAPH

Steel & cement hardware kirana stores others0

5

10

15

20

25

30

35

40

45

Nature of business

no.o

f con

nect

ors

INTERPERTATION

For the promotional activities purpose we are chosen some of the retail outlet for our tie up’s called as connectors. We targeted most of hardware following with steel and cement and kirana stores because most of the middle income people visit the store least once in a week, were foot fall is high.


When you think of housing loans, what bank/ company comes into your mind

State bank of India ICICI Bank HDFC Bank IDBI Bank Capital first company Others (mention)__________

Table

SBI ICICI BANK HDFC BANK IDBI BANK CAPITAL FIRST COMPANY84 14 2 0 0

GRAPH

SBI ICICI BANK HDFC BANK IDBI BANK CAPITAL FIRST

COMPANY

0102030405060708090

Banks

no.o

f con

nect

ors

INTERPERTATION

From the observation majority of the people were prefer the housing loans from the SBI bank i.e. 84%. The perception of the people that as it was a government sector, their no extra charges or any illegal effects may not happen. Next place is the private sector where ICICI bank as good market share when compare to other banks


Heard HFFC Company before

Yes No

TABLE

GRAPH

YES NO0

102030405060708090

100

opinion

no.o

f con

nect

ors

INTERPRETATION

According to the above graph, it’s a pathetic response from the connectors, they never heard about the HFFC Company. 92% people said never heard before and it’s a most difficult task to the company to take market share in Hyderabad. So HFFC must do more promotional activities to know the brand among the people.


YES NO

8 92

Rate the familiarity of the of HFFC Company

1Lowest

2 3 4 5Highest

TABLE

1 2 3 4 5Lowest Highest

56 25 6 9 4

GRAPH

Lowest Highest1 2 3 4 5

0

10

20

30

40

50

60

rating

no.o

f con

nect

ors

INTERPRETATION

According to research that held in Hyderabad city most of the people were not heard about the HFFC Company. Majority of the people rated to lowest i.e.56% and only 4% of the people were well known with this company. This Company should concentrate more on the awareness of the brand.


Familiarity with financial products/services such as housing loans, business loans etc...

extremely familiar very familiar moderately familiar slightly familiar not at all familiar

TABLE

EXTREMELY FAMILIAR VERY FAMILIARMODERATELY

FAMILIAR SLIGHTLY FAMILIARNOT AT ALL FAMILIAR

8 7 4 33 48

GRAPH

EXTR

EMELY

FAMILIA

R

VERY F

AMILIAR

MODERATEL

Y FAMILIA

R

SLIGHTLY

FAMILIA

R

NOT AT A

LL FA

MILIAR

0102030405060

Chart Title

no o

f con

nect

ors

INTERPRETATION

Most of people are not at all familiar with products available in the HEEC Company. This is the big drawback of the company and need to pay more attention on the advertising, to bring awareness among the people.


Regular customers to the connectors

Government employees Salaried person Business man Builders Agents Real estate brokers

TABLE

GOVT. EMPLOYEES

SALARIED EMPLOYEES BUSINESS MEN BUILDERS AGENTS

4 12 50 31 3

GRAPH

govt. em-

ployess

salaried employees

business men builders agents0

10

20

30

40

50

60

regular customers

no.o

f cus

tom

ers

INTERPRETATION

According to the connectors response, most of the were visiting their outlet were business men with 50% i.e. in the hardware shops, builders visiting was about 31% i.e. in granite and marble and steel cement outlets and remaining were in the kirana stores were the footfall is high with salaried employees.


HFFC company advertisement seen in which prospective area.

Newspaper Poster in shops Magazines Bill boards Never seen

TABLE

NEWSPAPERPOSTERS IN

SHOP MAGAZINESBILL

BOARDSNEVER SEEN

18 14 0 0 68

GRAPH

newspaper18%

posters in shop14%never seen

68%

Advertisments

INTERPRETATION

According to the above pie chart most people never had seen any advertisement of the HFFC Company i.e. 68% and few people saw the advertisement in the shop as posters and in newspapers as inserts. But 0% in magazines and billboards because those are high budgeted so HFFC did not take those activities till now.


People are quite familiar with HFFC Company

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

TABLE

STRONGLY AGREE AGREENEITHER AGREE NOR DISAGREE DISAGREE

STRONGLY DISAGREE

2 8 21 53 16

GRAPH

strongly agree agree neither agree nor disagree

disagree strongly disagree0

102030405060

opinion scale

no. o

f con

nect

ors

INTERPRETATION

According to my observation connectors said that people are not familiar to HFFC Company almost 53% were disagreed to the statement and remaining connectors 40% were also on the same path. This shows that HFFC Company is lacking badly on the promotional activities. Only 2% people are strongly agreed with the given statement


Recommendation for housing loans to customers for their future purpose

HFFC Company SBI ICICI Bank HDFC Bank Others(mention)__________

TABLE

HFFC SBI ICICI HDFC OTHERS

6 64 12 15 3

GRAPH

HFFC SBI ICICI HDFC Others0

10

20

30

40

50

60

70

Banks

no. o

f con

nect

ors

INTERPRETATION

Most of the connectors recommend the SBI bank is the best option to choose any loans, almost 64% were voted of this statement and the next option is HDFC bank for housing loans and then ICICI bank. Most of the people said that SBI is government sector, so there no chance changing interest rates and it is so genuine.


Attributes/characteristics of HFFC financial product/service do you like

Without IT returns Ease of loans Post loans services Clarity of information Loan to high risky ventures/individuals No hidden cost

TABLE

WITHOUT IT RETURNS

EASE OF LOANS

CLARITY OF INFORMATION

LOAN TO HIGH RISKY

INDIVIDUALSNO HIDDEN

COAT

POST LOANS

SERVICES56 12 0 30 2 0

GRAPH

INTERPRETATION


without IT returns

56%

ease of loans12%

loan to high risky indiciduals30%

no hidden coat2%

Attributes of HFFC

If we ask the connectors that in which aspects were you feel that HFC Company were good, they response that, 56% were respond to without any IT returns, Sanctioning loans for high risky individuals they are with 30%

Satisfaction level of the connectors for the incentive given to them

Highly satisfied Satisfied Neither satisfied nor dissatisfied Not satisfied Highly dissatisfied

TABLE

HIGHLY SATISFIED SATISFIED

NEITHER SATISFIED NOR DISSATISFIED

NOT SATISFIED

HIGHLY DISSATISFIED

6 30 12 34 18

GRAPH

highly satisfied satisfied neither satisfied nor dissatisfied

not satisfied highly dissatified05

101520253035

opinion scale

no. o

f con

nect

ors

INTERPTATION

The HFFC company is allotting Rs.2000/- per connector as incentive, if they brought a final approval lead. So among this statement some of the connectors are satisfied i.e. 30% and 34%


were not satisfied by the given incentive. This shows that company should increase the amount of the connectors so that they feel it’s a profitable incentive and bring the leads for the company.

Efficient in promotional activities for HFFC brand

Extremely efficient Very efficient Moderately efficient Slightly efficient Not at all efficient

TABLE

EXTREMELY EFFICIENT

VERY EFFICIENT

MODERATELY EFFICIENT

SLIGHTLY EFFICIENT

NOT AT ALL EFFICIENT

2 6 24 46 22

GRAPH

extremely efficient very effiecent moderately effiecnt slightly effiecent not at all effiecnt05

101520253035404550

opinion scale

no. o

f con

nect

ors

INTERPRETATION


From the above observation the promotional activities need to be more efficient to capture the minds of the customers. 46% were saying that the connector’s idea is good and slightly efficient and if more advertising leads to more sales of the products.

The draw backs of HFFC product/services are

High interest rate Lack of awareness among people Poor promotional activities Unreliable Poor customer service Any other(mention):______________

TABLE

HIGH RATE OF INTEREST

LACK OF AWARENESS

AMONG PEOPLE

POOR PROMOTIONAL

ACTIVITIES UNRELIABLE

POOR CUSTOMER

SERVICE ANY OTHER32 38 30 0 0 0

high ra

te of in

terest

lack o

f aware

ness am

ong peo

ple

poor pro

mtional activit

es

unreliab

le

poor custo

mer ser

vice

any o

ther0

10

20

30

40

parameters

no. o

f con

nect

ors

Interpretation


The main drawback of the HFFC is that high rate of interest with 32% voting and followed with

lack of awareness among the people with 38 %. The promotional activities are also very poor

with 30%, which means need to increase more promotional activities.

From above all the observation I conclude that Hyderabad people are not at all familiar with the

HFFC Company. This impact falls on the sales of HFFC. The promotional tools which are used

by the HFFC Company are very poor. One lakh is not at all efficient for the promotions. They

should increase budget for the promotional in order to increase their sales. Most of the

Hyderabad people not at all aware of the HFFC Company, people are rejecting the product of

HFFC because the high rate of interests.

Making connectors as prospective customers is not a good idea, but bringing the leads from

connectors is a better option for increase in sales. In Metro cash & carry the policy of connectors

does not work. Connectors are not at all satisfied for the given incentives. HFFC should take

over it at this point. Companies have to do more promotional events to bring market share in the

Hyderabad city, if not slow the company will be vanished.


CHAPTER-6


CONCLUSIONS

After analyzing the data of the study I conclude that the HFFC Company is in the bottom

level of the market with 8% of awareness and the promotional activities need to make more

frequently in order to increase the selling products. Newspaper inserts, posters, pole boards, no

parking boards and mela campaigns were felt less informatory to about 15%, 16% and 10%

respectively. Second and third importance was given to availability by 32% and promotional

activities (11%) are not major factors which prevents them for not being the customers.

Findings of the study:

HFFC Company is very poor in the promotional activities. Only 8% of the people were aware of

the HFFC Company which is very bad figure for the company and it is very difficult task to grad

the market share. Most of the people were not all familiar with the company products like

The learning about the products is happened by postures in shops 30% and paper inserts 12%.

36 % of the respondents have observed the advertisements of HFFC Company

Among 36 respondents who have observed the advertisements, 11respondents (38%) feel that the

advertisements were informatory.

Among 11 respondents who felt the advertisements were informatory 58 felt posters, 34% says

newspapers inserts’, 8% felt melas.


CHAPTER-7


LIMITATIONS & FUTURE DIRECTIONS

The survey was held only in Hyderabad city. The survey is only 100 respondents and with the

middle men like shops outlets. Granite & marbles, steel & cement, hardware and kirana stores.

Because most of the foot falls happen in the kirana stores and most o f the people visit hardware

and cement shop for construction purpose so there is high chance taking loans. We are not

directly interacting with the prospecting customers.

SUGGESTIONS:

As there is very less promotional activities about HFFC products, company should try to

promote their products.

The products like housing loans and business loans have a great potential to grow in the market

but the awareness is very less. So the company must take appropriate steps in order to increase

the sales. And much effort is needed to promote their products.

During the study I came to know that the availability of the housing loan product have very

tough competition in the market. Connectors says, they learnt about the product mainly through

posters, newspaper inserts and melas. And posters, newspaper inserts were more informatory. So

the efforts of the company are going in a right direction. But only suggestion is to increase the

frequency television ads and ad boards

The connectors expect good incentive. And get motivates to bring prospecting customers. Most

of the connectors say interest rates is the major reason for not being more sales. So the company

should make an attempt to make them understand the value for money what they get from HFFC

Company.


CHAPTER-8


BIBLIOGRAPHY

BOOKS-

MKTG- Charles W. Lamb (Author), Joe F. Hair (Author), Carl McDaniel (Author)

Principles of Marketing: A South Asian Perspective (English) 13th Edition-Author: Philip Kotler , Prafulla Y Agnihotri , Ehsan Ul Haque

Websites-

www.google.com

www.googlescholars.com

www.homefirstindia.com

www.mbaprojects.com

www.slideshare.com

www.marketing91.com

www.wikipedia.org

Reference-http://www.emeraldinsight.com/doi/pdfplus/10.1108/10610420210419540

http://journals.ama.org/doi/abs/10.1509/jmkg.65.3.79.18329

http://www.researchandmarkets.com/reports/2167693/

emerging_opportunities_in_the_indian_housing_loan


http://www.researchandmarkets.com/reports/2167693/emerging_opportunities_in_the_indian_housing_loan

http://www.researchandmarkets.com/reports/2167693/emerging_opportunities_in_the_indian_housing_loan

http://journals.ama.org/doi/abs/10.1509/jmkg.65.3.79.18329

http://www.emeraldinsight.com/doi/pdfplus/10.1108/10610420210419540

http://www.marketing91.com/

http://www.slideshare.com/

http://www.mbaprojects.com/

http://www.homefirstindia.com/

http://www.googlescholars.com/

http://www.google.com/

http://www.flipkart.com/author/ehsan-ul-haque

http://www.flipkart.com/author/prafulla-y-agnihotri

http://www.flipkart.com/author/philip-kotler

https://www.amazon.com/s/ref=dp_byline_sr_book_3?ie=UTF8&text=Carl+McDaniel&search-alias=books&field-author=Carl+McDaniel&sort=relevancerank

https://www.amazon.com/s/ref=dp_byline_sr_book_2?ie=UTF8&text=Joe+F.+Hair&search-alias=books&field-author=Joe+F.+Hair&sort=relevancerank

https://www.amazon.com/s/ref=dp_byline_sr_book_1?ie=UTF8&text=Charles+W.+Lamb&search-alias=books&field-author=Charles+W.+Lamb&sort=relevancerank

http://www.seminarsonly.com/EngineeringProjects/Marketing/

ImpactofPromotionalActivitiesforSellingHCLProducts.php.

https://afribary.com/read/1388/

Theimpactofpromotionalactivitiesonbournvitaproductinenugumetropolisacasestudyofcadburynig

eriaplcinenugu

CHAPTER-9


https://afribary.com/read/1388/Theimpactofpromotionalactivitiesonbournvitaproductinenugumetropolisacasestudyofcadburynigeriaplcinenugu



http://www.seminarsonly.com/EngineeringProjects/Marketing/ImpactofPromotionalActivitiesforSellingHCLProducts.php

http://www.seminarsonly.com/EngineeringProjects/Marketing/ImpactofPromotionalActivitiesforSellingHCLProducts.php

QUESTIONNAIRE

“A STUDY AND UNDERSTANDING IMPACT OF PROMOTIONAL ACTIVITIES ON SELLING HFFC PRODUCTS”

Hello,Thank you for allowing me to communicate with you. I sincerely request you to fill in the

important information in this questionnaire. Please answer the questions as honest as possible. I’m assured you that all responses will be strictly confidential and used for academic purpose only. I appreciate your time and generosity.

Krushi Kumar

NAME: _________________ CONTACT NO: ____________________

1. What is your organization name:_______________________

2. What is your nature of business:________________________

3. When you think of housing loans, what bank/company comes into your mind? State bank of India ICICI Bank HDFC Bank


IDBI Bank Capital first company Others (mention)__________

4. Have you heard of our HFFC Company? Yes No

5. How familiar are you with HFFC Company?Please rate

6. How familiar are you with our financial products/services such as housing loans, business loans

etc..,? extremely familiar very familiar moderately familiar slightly familiar not at all familiar

7. Who are your regular customers? Government employees Salaried person Business man Builders Agents Real estate brokers

8. Where have you seen our company advertisement? Newspaper Poster in shops Magazines Bill boards Never seen


1Lowest

2 3 4 5Highest

9. Do you agree that people are quite familiar with our company? Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

10. Which company do you recommend for housing loans for your customers? HFFC Company SBI ICICI Bank HDFC Bank Others(mention)__________

11. Which attributes/characteristics of our HFFC financial product/service do you like? Without IT returns Ease of loans Post loans services Clarity of information Loan to high risky ventures/individuals No hidden cost

12. Are you satisfied by the amount of incentive being given by our HFFC Company? Highly satisfied Satisfied Neither satisfied nor dissatisfied Not satisfied Highly dissatisfied

13. Do you think HFFC Company is efficient in promotional activities for HFFC brand? Extremely efficient Very efficient Moderately efficient Slightly efficient Not at all efficient

14. What do you think the draw backs of HFFC product/services?


High interest rate Lack of awareness among people Poor promotional activities Unreliable Poor customer service Any other(mention):______________

15. Do you suggest any promotional activities for HHFC Company to increase their sales?

Answer:

*** THANK YOU ***


INDUSTRY PROFILE

INTRODUCTION

Housing is an important sector for any economy as it has inter-linkages with nearly 269

other industries. The development of housing sector can have direct impact on employment

generation, GDP growth and consumption pattern in the economy. To help develop housing in

the country, there is need to have a well-developed housing finance market. In India, housing

finance market is still in its nascent stage compared to other countries. The outstanding amount

of housing finance from all sources accounts for less than 8 per cent of GDP when compared

with 12 per cent in China, 29 per cent in Malaysia, 46 per cent in Spain and 80 per cent in the

US.

The demand for housing is increasingly being made by individuals and households given

increasing level of income and prosperity. The supply of houses have to come from builders,

developers and construction companies scattered widely across the country, both in the private

and public sector when examined in the context of demand and supply of housing units,

especially in the face of scarce land in the urban areas.

In India, housing finance market is very complex. The government, both at centre and

states, is a facilitator and is assisted by two regulators, Reserve Bank of India (RBI) and National

Housing Bank (NHB). The housing finance market is dominated by commercial banks, both

domestic and foreign. In addition, there are cooperative banks and housing finance companies,

self-help groups, micro-finance institutions, and NGOs. The RBI regulates commercial banks

and partially cooperative banks (which are mainly governed by the State Governments under

State Cooperative Acts) while the NHB regulates the housing finance companies. The others are

not regulated by any authority in the country.


The financial sector reforms initiated in 1985 and 1991 unleashed development forces in

the economy. This resulted in higher employment, increased income levels, faster urbanization

and higher demand for houses, especially in urban areas. Therefore, concerted efforts were made

by the Government and the Reserve Bank to encourage housing during the 1990s. The long term

goal of the National Housing Policy, announced by the Government in 1998, was to eradicate

houseless ness, improve the housing conditions of the poor and provide minimum level of basic

services and amenities to all. Fiscal incentives were also granted, in general, to the housing

sector. The government has been initiating as well as strengthening measures to extend housing

to the weaker sections of the society. A number of measures were announced from 2001 but a

concerted effort was made in 2006 after some fears were expressed that there was a housing

bubble developing in India which could eventually burst. It was then recognized that role of

housing could be critical in India and therefore measures announced thereafter aimed to improve

business environment in the country.

BRIEF REVIEW OF LITERATURE

A number of empirical studies establish that key determinants of housing prices are

income levels, interest rates, supply conditions, demographic changes, number and size of

households, maintenance costs, property taxes, and speculative pressures (Poterba, 1984; OECD,

2005).

House prices are an important determinant of household sector’s gross and net wealth and

thereby of consumption and savings. In many countries, including India, house property is the

household’s largest asset and price developments in housing markets can impact growth directly


but mainly through credit channel since real estate can serve as collateral for consumer

borrowing (Kiyotaki and Moore, 1997; Bernanke and Gilchrist, 1999).Furthermore, housing

cycles can influence economic activity through wealth effects on consumption and private

residential investment mainly due to changes in profitability and the impact on employment and

demand in property related sectors.

And if house prices are not aligned with the fundamentals, they can threaten the

economic and financial stability of the country mainly because of the macro-financial linkages,

as empirical evidence demonstrates. One of the most important causes of financial crises was

collapses in real estate prices, either residential or commercial or both (Reinhart and Rogoff,

2008). There have been cases where such collapses have taken place after bubbles in the real

estate prices, and both, the financial sector and the real economy are adversely affected after the

bubble bursts. The current crisis can be taken as an example, wherein decline in the real estate

prices led to a drastic drop in securitized asset prices in 2007. Further, the instability which

followed impacted balance sheets of many financial institutions as was predicted by Feldstein

(2007). The financial crisis then got carried forward to the real sector.

Housing sector is impacted by both, monetary and fiscal policy, macro prudential norms

and labour policy prevalent in the economy (Hilbers et al, 2008). To explain the recent crisis, a

generally accepted argument was that the loose monetary policy and excessive availability of

credit were the causes for the real estate bubble in these countries. As argued by Taylor (2007)

these levels of interest rates were lower than in previous U.S. recessions relative to the economic

indicators as at the time captured by the “Taylor rule”. The low interest rates encouraged

borrowing and buying of houses. While Spain had one of the largest deviations from the Taylor

rule, this country also had the largest housing boom (measured by the changes in housing

investment as a share of GDP). Sweden’s Central bank, the Riksbank is one of the rare central

banks that have taken the approach of targeting real estate prices. Policy of the Riksbank is to

look at property prices during decisions about interest rates (Ingves, 2007). In comparison with

larger countries, the smaller ones have a stronger monetary transmission through the housing

channel but a robust financial system is an imperative requirement for such a transmission to be

successful. Cross-country studies indicate that the growth in housing finance depends upon a

number of factors such as credit history of the borrower, ability of the financing institution to


secure collateral, macroeconomic stability prevailing in the economy and trends in household

income (Warnock and Warnock, 2007).

IMF (2011) observed that shocks to disposable income, mortgage interest rates and prices

play an important role in short term consumption. In comparison with equity price busts, housing

price bursts involve more serious macroeconomic developments. Housing price booms put

forward noteworthy risks. Some of the factors which appear to account for the greater severity of

housing price busts as compared with equity price bursts are:

(i) Wealth effects on consumption are larger in case of housing price busts than in the case

of equity price busts;

(ii) In comparison with the equity price busts, unfavorable effects of the housing price busts

on the banking system (capacity and willingness of the banking system to lend) were stronger

and faster;

(iii) Link between boom and bust is more powerful for housing prices, than for equity prices.

Probability of housing prices busts being preceded by a boom were higher in the case of

housing prices boosts.


INSTITUTIONS IN HOUSING MARKET AND

HOUSING FINANCE IN INDIA

A number of institutions have been instrumental in developing the housing finance market in

India. These mainly are the Central and State governments, RBI and NHB. The flow of credit to

housing sector and housing finance markets are also discussed in the section.

Government

The role of the Government in recent years has switched from that of a provider of

housing units to more of a market facilitator. The Five Years Plans starting from 1951 had

assigned housing sector a prominent place in the economy. The National Buildings Organization

(NBO) was established in 1954 under the Ministry of Housing and Urban Poverty Alleviation for

technology transfer, experimentation, development and dissemination of housing statistics. NBO

was further restructured in 1992 and 2006 with the revised mandate keeping in view the current

requirements under the National Housing Policy, and various socio-economic and statistical

developments connected with housing and building activities. The setting up of Housing and

Urban Development Corporation Ltd. (HUDCO) on April 25, 1970 to comprehensively deal with

the problems of growing housing shortages, rising number of slums and for fulfilling the

pressing needs of the economically weaker section of the society was one of the significant steps

in the series of initiatives taken by Government. The National Housing Policy was announced in

1988 which had a long term aim of eradicating houselessness, improving the conditions of the

inadequately housed and providing a minimum level of services/amenities to all. National

Housing bank was established in 1988 under an Act of the Parliament to function as a principal

agency to promote housing finance institutions and to provide financial and other support to such

institutions. The National Housing and Habitat Policy, 1998 was formulated after a thorough

review of the earlier policy. In 2007 another National Urban Housing and Habitat Policy was

formulated in view of the changing socio-economic parameters of the urban areas and growing

requirement of shelter and related infrastructure.

Consequent to these focused initiatives, supportive government measures like easing

regulations and releasing more land for housing purposes have had a positive impact on the

growth of housing finance in India. The central and state governments have been offering tax

concessions for the housing sector. Several state governments have passed legislation to


safeguard the interest of lessors, encouraging construction of properties for rent. In recent years,

rationalization of stamp duty and computerization of land records in many states has been

initiated. The government is also considering repealing of the Urban Land Ceiling Act in most

states across the country. Opening up the real estate sector to FDI has also had positive impact on

the housing finance in India.

Reserve Bank of India

Asset prices are very important for monetary policy, because when bubbles, big or small,

burst, the cleaning up of the mess, is a long and unhappy experience. The Reserve Bank has

initiated several measures in the housing sectors. Commercial banks are required to lend 3 per

cent of the incremental deposits towards the priority sector, in which housing is an important

component. The Reserve Bank also includes investment made by banks in the Mortgage Backed

Securities (MBS) since 2004 as flow of credit to housing; assigning lower risk weight to housing

and benign interest rate environment has contributed to increase in housing loans. Growth in

housing loans has also been assisted by the comfort of relative safety of such assets given the

tangible nature of the primary security and the comfort obtained from the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002

and the amendment in December 2012.

National Housing Bank

National Housing Bank has been playing an important role in regulating and supervising

the housing finance companies. In recent years, especially since 2001, a number of new players

have entered the housing finance market with competitive offerings which have helped increase

the demand for housing loans. These housing finance companies/banks have been passing on the

benefit of lower cost of funds to customers. Most of these financing institutions, besides

simplifying the process of availing loans, have also introduced new products and variants

targeted at specific customer segments.

India Mortgage Guarantee Corporation

India Mortgage Guarantee Corporation (IMGC) was founded in June 2012 with a vision

to make early home ownership a real possibility through the provision of mortgage guarantees. It

benefits the home buyer (borrower) by lowering down-payment amounts and increased home

ownership at an accelerated pace and makes loan available at better terms. It benefits the lender


by providing higher capital relief, increased earning on assets withoutincremental risk. It also

helps in prevention, detection and mitigation of losses caused by borrower default, imparts

ability to test and learn. It further enables the extension of loans to new market segments, and

opens up avenues for increased revenue volumes and profitability.

Housing Finance Companies

Housing Finance Companies (HFCs) registered with NHB are the second largest players

in the housing market. The outstanding amount of housing loans by 56 HFCs with 2,065

branches spread across the country increased from Rs. 33,250 crore as at end-March 2001 to Rs,

86,155 crore as at end-March 2006 to Rs. 2,90,427 crore as at end-March 2013. The outstanding

housing loans accounted for more than 74 percent of the total credit portfolio of the HFCs in the

last three years. The main disbursal of housing loans in 2012-13 by HFC is to individuals (84.0

percent) followed by loans to builders (12 percent), and corporate bodies and others (4 percent).

It was observed that around 87 percent of the housing loans had the maturity of above 7 years.

This indicates that the preference of the majority of HFCs housing loan customers was for

housing loans on a long tenure rather than short or medium tenure. In 2012-2013, maximum

loans by HFCs were distributed in Maharashtra and Tamil Nadu followed by UP and Karnataka.

In the case of HFCs loans to Individuals, 72 per cent of housing loans were disbursed for the

purpose of constructing or acquiring a new house while 25 percent was disbursed for purchase of

an old or an existing house.

Housing Loan by Cooperative institutions

The disbursal of housing loans by cooperative institutions has decreased from Rs.868 crore in

2000-01 to Rs.530 crore in 2005-06 but then eventually rose to Rs. 11,571 crore in 2011-12.

Housing Finance Market

Housing industry is important systemically, as it affects 269 industries (ranging large,

medium and small like cement, steel, paints, building hardware, etc.), directly and indirectly. A

number of efforts were made by different institutions to help develop the market. The guidelines

issued by the Reserve Bank encouraged the development of the housing sector – loans extended

up to a stipulated amount in the housing sector were included in the priority sector and targets

were set for commercial banks to lend to the sector. In this context, HUDCO and also the

National Housing Bank were instrumental in developing the housing finance markets. The

government also stipulated that Life Insurance Corporation of India (LIC), General Insurance


Corporation of India (GIC) and Provident Funds are statutorily required to invest in housing

sector.

Banks and HFCs, as indicated above, are the major players in the housing finance market in

India. While Banks are subject to regulation and supervision by the Reserve Bank of India, HFCs

are regulated and supervised by National Housing Bank under the provisions of the National

Housing Bank Act, 1987 and the directions and guidelines issued thereunder from time to time.

The regulatory measures include prudential norms, transparent and standardized accounting and

disclosure policies, fair practice code, asset liability management and other risk management

practices etc. These measures have helped to ensure the development of the sector on healthy and

sustainable lines.

NHB extends financial assistance to banks, HFCs, and cooperative sector institutions,

towards their individual housing loans. Refinance by NHB has increased substantially from Rs.

1,008 crore in 2000-01 to Rs.5, 632 crore in 2005-06 and to Rs.17, 542 crore in 2012-13. SCBs

account for a major component of disbursement (Table 7). Cumulative disbursement by NHB is

Rs.86, 277 crore between 2006-07 and 2012-13 of which 52 percent is to SCBs and 46 percent to

HFCs.

Interest Rates

The interest rates charged on home loans could be fixed or floating. There is no uniform

reference rate for floating interest rates across the banks. In most banks, PLR of the bank is the

reference rate for the floating rate. In others, whenever there is a review of PLR and/or risk

weights, floating rate on housing loans is also reviewed. These rates could be reset based on the

cost of funds and repriced on a quarterly/semi-annual/ annual basis. In general, the rate of

interest is decided on the basis of cost of funds, operating expenses and profit margin.

Approximately, 80-90 per cent of outstanding housing loans are on floating rate basis, however

the range varies widely between banks from 60 per cent to 90 per cent, and some banks grant

loans to real estate only under floating rates.

In the case of fixed rate loans, generally, risk premium is added to the floating rate to

cover the market risk, depending on the tenure of the loan. Some banks simply determine the

fixed rates based on the prevailing floating rates and anticipated behaviour of the interest rates in

near future while others take into account the cost of funds, provisioning requirements and peg it

at a level where outflow is not affected by the revision. In most cases, fixed rate loans are not


really ‘fixed’ and the rate is subject to resets, linking to the prevailing rates, at periodic intervals,

e.g., every three or five years

Tenor of Loans

The maximum tenor for retail home loans sanctioned by banks varies from 20 years to 25 years

while the minimum tenor varies between 1 year and 2 years with the average tenor ranging

between 8 years and 16 years. A few banks extend loans to housing companies, co-operatives

and building societies with a maximum tenor of 10 years. In the case of HFCs, the maximum

tenure of loan is 15 years and for the cooperative sector is 5 years.

Interest Payment as share of income

The average share of the principal repayments and interest on account of housing loans in

the monthly income of the borrowers ranges between 40.0 per cent and 65.0 per cent, and

generally is around 50 per cent of the net carry home income. The norms set by banks are

diversified, with the cap ranging between 40.0 per cent and 85.0 per cent of the net carry home

income, depending on the income levels of the loaner. Some banks follow a graded system with

the cap rising with the increase in annual income. In the case of HFCs, the limit is 40 per cent

and in the cooperative sector, generally less than 35 per cent.


BENEFITS OF HOME LOAN

Home loans are loans you have access to, depending on whether you want to buy or build a

house and can also be used to repair or extend an existing house.

Who can avail of these loans?

According to lending institutions, any Indian resident who is over 21 years of age

at the beginning of the loan and below 65at its maturity can avail of the loan. Salaried Employees

as well as Self- Employed citizens can apply. NRI Salaried and RBI Self Employed, under RBI

guidelines, can approach only nationalized banks and other HDFC for loans.

Why should one option for a loan to buy a house?

Taking a loan seems like a good option when the money at hand is insufficient to buy the house

of your dreams. Consider couples in their twenties and thirties. They enjoy a good income

currently, buy their accumulated capital isn’t enough to purchase a house. Whereas a home loan

can give them access to capital their current earnings.

Also, if you take a 10 years old loan when you are thirty, you could repay it by the time you’re

forty. So you don’t have to be burdened with the interest and are free to plan your retirement

savings.

The Quantum of loan that one can avail of:

Loan sanctioned depend on your repayment capacity – which is based on your current income

and your future repayment capacity. You would include your spouse’s name to enhance the loan

amount. The maximum loan can be sanctioned varies with each bank/ institutions and ranges

from Rs.10 lakhs to Rs. 1 crore.

Benefits of taking a home loan:

A home loan is very different from a personal loan like a car loan for instance. You can utilize a

home loan for financing an asset that will hold its value and even appreciate over the period of

the loan. Though its price could fluctuate in the short terms, Total Estate will show capital

appreciation over the years. The value of your house generally while the loan remains constant.


If you had opted to wait, save up and buy a house, it would, in the long run cost you much more;

home loans also come with many tax benefits.

Tax benefits of taking a home loan:

The income tax authorities look with favor upon those servicing a housing loan from specified

financial institutions. And, it is up to you to be wise enough to take advantage of this.

Section 24 of the Income Tax:

Interest on loan till Rs.1.5 lakhs per annum is exempted from income tax (under section 23/

24(1) of the Income tax act).

Section 88 of Income Tax Act:

You get a 20% rebate on repayment of principle during a financial year. Once again, over the

years, the principle repayment eligible for rebate has been enhanced from Rs.10,000 to the

current limit of Rs.20,000 Stamp duty, registration fee or transfer of such house property to the

assesses is also considered under this amount.

Financial Institutions, which give, home loans:

Leading Banks Housing finance companies

FINANCIAL IMPLICATIONS OF AVAILING A LOAN (SMALL OR BIG)

There are several expenses involved apart from repayment of the actual loan amount:

1. Processing fees- A processing fee (PF) is charges at the time of submission of the application

form and covers expenses incurred for processing the application form. This fee has to be paid

upfront by the customer – in some cases, it is non-refundable.

2. Administration fees- to meet operating expenses.


3. Pre-EMI- A simple interest calculated on the disbursement amount in case of a plot under

construction.

4. EMI- The EMI is an abbreviated form of the equated money installment and is simply

referred to as monthly installment in common parlance. And, being a self-explanatory term that

is exactly what it is. The amount you will have to pay you financier every month when repaying

your loan. Being a monthly payment, at the end of the year, you would have paid 12 EMIs.

TYPES OF LOANS AVAILABLE

Broadly two types- fixed rate and variable rate loans; while the former deals with a fixed rate of

interest over the entire duration of the loan, the latter has the rate of interest changing according

to the fluctuations in the market.

LOAN THAT ONE CAN AVAIL

Up to 85-90% of the total cost based primarily upon the individual’s payback capacity.

GENERAL CONDITIONS THAT GOVERN A HOME LOAN:

These are likely to vary with respect to the different types of housing loans:

The maximum period of the loan is normally fixed by HFIs. However, HFIs do

provide for different tenors with different terms and conditions.

The Installment that you pay is normally restricted to amount 45% of your monthlygross

income.

You will be eligible for a loan amount, which is the lowest as per your eligibility.This is

calculated on the basis of your gross income and payback capabilities.

Some HFIs insist on guarantees from other individuals for due repayment of your loan. In

such cases you have to arrange for the personal guarantee before the disbursement of your

loan tasks place.

Most HFIs have a panel of lawyers who go through your property documents to ensure that

the documents are clear and are not misrepresented. This is an added benefit that you get

when you avail of a loan from an HFI.


You repay the loan either through Deduction against Salary, Post dated cheques, and

standing instructions or by Cash/DD.

WHAT ALL ONE CAN TAKE THE LOAN FOR?

There are different types of home loan tailored to meet ones needs here’s all some of them.

Home purchase loan: This is the basic home loan for the purchase of new home.

Home improvement loans: These loans are given for implementation repair works &

renovation in a home that has already been purchased by the client.

Home construction loan: This is available for the construction of new home.

Home extension loan: This is given for expanding or extending an existing home for

e.g.: addition of an extra room etc.

Home conversion loan: This is for those who have financed the present home with home

loan & wish to purchase& move to another home for which some extra funds are required

through home on version loan ,existing loan is transferred to the new home including the

extra amount required eliminating the pre payment of the previous loan.

Land purchasing loan: this loan is available for the purchasing of land for both

construction and investment purpose.

Bridge loan: these are designed for those people who wish to sell the existing home &

purchase another one. The bridge loan help finance the new home, until a buyer is found for

the home.


COMPANY PROFILE

HFFC is a young Housing Finance Company that was co- founded in 2010 by former MphasiS

Chairman, Jaithirth (Jerry) Rao and former Citibank Consumer Banking Head, P.S Jayakumar.

WHAT WE DO

We provide loans to low and middle-income individuals, who want to buy homes. A majority of

our customers are first time home buyers and find it challenging to deal with big financial

institutions for their home loan requirements. Loan amounts for these homes typically vary

between 1 lakh to 30 lakh Rupees.

HOW WE ARE DIFFERENT?

It’s not what we do; it’s how we do it We make smart use of technology to create innovative

solutions that include door- step services, paperless process and easy prepayment options.

Since 2010, we have sanctioned over 6000 loans. We have established tie-ups with developers

like Mahindra Life spaces, VBHC Value Homes, Poddar Developers and Maple Developers who

are focusing on building affordable homes across India. Our Head Office is in Mumbai and we

have a presence in over 25 cities across 10 States.

Mission-HHFC aims to serve the housing loan needs of low and middle income customers,

who are unable to avail loans from banks and HFCs due to various factors.

Vision- To be predominant player in affordable housing finance in India


All about home loans

I. Basic Gaayan

II. Pre – Loan Gaayan in 10 easy steps

III. Post – Loan Gaayan

I. BASIC GAAYAN

Type of Home Loans available with us:

LOANS FOR HOME PURCHASE (FROM OUR APPROVED DEVELOPERS)

This is the most common type of loan and it's as easy as a pie. We are not blowing our own

trumpets here, but with us you can get a loan approved within 24 hrs flat. Just a few clicks or a

couple of taps on your Smartphone and you are all set to experience the best service you've ever


had with a financial institution. Loans can be up to 90% of the property value and tenure can be

as long as 25years. Also, you can avail a loan with joint borrowers depending upon you and your

co-borrowers' eligibility.

SELF CONSTRUCTION LOANS

This is our current favorite. Suppose you own a plot of land or have inherited it and wish to

construct a house in it, you can consider taking a home construction loan. We are here to make

your loan application process a smooth ride for you. We will scrutinize the property related

documents along with your own credentials and there you are, standing on your own plot &

watching your dream home come up.

HOME IMPROVEMENT / RENOVATION & EXPANSION LOANS

You are looking at the specialist here. Your house needs a repair badly, or you are adding a new

balcony. May be you are getting married and need to expand and build a new floor or just a

bathroom. For any such alteration work, our home improvement & expansion loan is there for

you. We finance 80-85% of the total repair cost.

BALANCE TRANSFER LOANS

If you are unhappy with the services of your current lender with respect to interest rates or the

tenure of the loan or any related issues, we would be more than happy to get you on-board. We

guarantee nothing but the best service. As per RBI guidelines, closure charges are done away

with. So, why trudge along when you can run!

NRI HOME LOANS

These are loans, specifically designed for the benefits of non-resident Indians. Quick & easy

process, entirely online. The hassle-free paperwork, an array of pre-payment options and

maximum loan tenure makes us a perfect fit to service an NRI customer.


SHOP LOANS

Some residential complexes have dedicated areas to build shopping complexes or small shops.

We finance these shops inside the residential complexes. It's a pretty good investment for small

business owners who often look for expansion.

II. PRE – LOAN GAAYAN IN 10 EASY STEPS

Step 1: Identify the property you want to buy

You must carefully consider several factors before finalizing the property that you want to

purchase:

Type of property i.e. apartment in a large project v/s constructing a house on your own plot.

Credibility and track record of the builder. Quality of construction and amenities available visa is

price, Completion time.

Step 2: Understand the property price and arrange finance

Post identification of property that you want to purchase, it is necessary to understand the

fully loaded property price. This would help in planning for the financial arrangements for the

purchase. Apart from the basic price (per square foot rate) of the flat quoted by the builder, the

additional charges can be on account of Value Added Tax (VAT), Service Tax (ST),

Maintenance Charges, Deposit for Electricity and Water, Registration and Stamp Duty, etc.

Please ask the builder to provide details of all the above charges so that you can arrive at the total

price of the flat and make arrangements for finance accordingly.

Items such as Car Park are optional and have to be added to arrive at the final price. The

table provided below will assist you in planning your finances.


Details Amount (Rs.) Details Amount (Rs.)

1. Basic price Own funds immediately available

2. Value Added Tax (VAT) Own funds available later

(FDs, land sale, etc.)

3. Service Tax (ST) Loan required

4. Electricity &

Water Deposit

5. Maintenance charges

6. Registration & Stamp duty

7. Optional (Car park, etc.)

8. Others

Total Total

Step 3: Apply for a loan

Applying for a loan with HomeFirst is very simple & convenient. Just provide the documents as

listed below and we would ensure hassle free processing of your Home Loan application

DOCUMENT DETAILS

Identity Proof (Anyone) Pan Card

Passport

Voter Id Card

Driving License

Identity Card issued by Employer

Address Proof (Anyone) Passport

Electricity Bill

Telephone Bill


Ration Card

Lease Agreement

Photographs 1 passport size photograph

Income Proof

Salaried:

Latest 3 months salary slip

Form 16 (latest year)

ITR (latest year)

Self-employed:

•ITR, P&L and Balance sheet for latest 3 years OR

Proof of business (3 years)

Bank Statements Latest 6 month

*NOTE: Applications are currently accepted only for the following approved projects*

Some of the queries you may have regarding the loan are answered below:

1. What % of the property price can be financed?

Home First can provide finance up to 90%* of the property value. The balance amount has to be

arranged by you from other sources such as your savings, etc. (*For loan amounts less than Rs.

20 lakhs)

2. What will be the duration of the loan?

Home First offers loan tenure of 1 year to 25 years. If you opt for a long tenure, you can get the

advantage of a lower monthly outflow in the form of EMI.

3. What is the rate of interest and other charges?

The rate and interest is product specific. Please refer to the individual product pages for the rates.


4. Will I be charged any fee for early prepayment?

No prepayment fee will be charged by Home First for early prepayment of the loan(both entire

and partial).

5. Who can be co-applicants to the loan?

All co owners of the property have to become co-applicants to the loan. A person who is not a

co-owner can also become a co-applicant to the loan.

Step 4: Credit appraisal and loan sanction

Home first will consider the applicant and co applicant’s income, assets, liabilities, credit

history (CIBIL), qualifications and other factors to arrive at the decision to approve the loan.

The appraisal may involve visits to the residence and office, as well as personal discussions with

the applicant and co applicants.

If the loan is approved, a sanction letter will be sent to you. You have to return a signed copy of

the sanction letter to acknowledge acceptance of the same.

Step 5: Down payment for the loan

Home First may sanction up to 90% of the property price depending on the credit appraisal. The

balance amount, referred to as Down Payment, has to be paid by you directly to the builder.

The actual % of loan sanctioned and the balance portion will be specified in the sanction letter.

You have to make the down payment to the builder and hand over the payment receipt to Home

First.

Other documents that need to be completed at the time of making down payment are:

1. Construction Agreement.

2. Agreement for Sale.


These documents have to be handed over to Home First in original in order to commence disbursal of the loan.

Step 6: Construction phase and Pre EM Interest payments

During construction phase, Home First will disburse funds to the builder on your behalf.

This will be based Home First will charge only interest on the amount disbursed as loan, during

the construction phase. Interest will be billed on a monthly basis and the billing statements will

be sent to you before the 1st of every month. Payments have to be made before the 4th of each

month. These interest payments are referred to as Pre EMI Interest payments.

EMI payments will start only after completion of the project and registration of the property.

Step 7: Registration, possession and EMI payments

Once the construction is complete and the property is ready for possession, the Sale Deed

has to be executed and registered. This ensures transfer of ownership rights of the property from

the builder to the buyer. The original sale deed after registration has to be handed over to Home

First. This indicates the mortgage of the property with Home First. The sale deed can be

executed only after the full consideration for the property has been paid to the builder either

through the buyer’s own funds or loan.

Repayment of the loan through Equated Monthly Installments (EMIs) commences from the 4th

of the subsequent month after registration. The EMIs will be as per the terms governing the

transaction as mentioned in the loan agreement. Try our EMI Calculator to find out the EMI

payable for any combination of loan amount, interest rate and tenure.

Electronic Clearing Service (ECS) mandate (Should be ACH), authorizing Home First to debit

your bank account on a specified date for payment of EMIs, will be collected from you.

Step 8: Prepayment of loan

Home First allows partial as well as full pre payment of the loan after registration when regular

EMIs have commenced.

Partial prepayment:


You can make a partial prepayment and thus reduce your outstanding loan amount and

Interest outflow. Home First will give you the choice of:

1. Reducing your EMI proportionate to the reduction in loan amount. The tenure will remain the

same as your original tenure in such cases.

2. Reducing your tenure and keeping the EMI the same.

Full prepayment:

You can make a full prepayment and repay the entire loan outstanding. This will ensure

that the loan is closed and the loan agreement is terminated. All original documents pertaining to

the property collected from you during the loan approval process will be returned to you.

Home First will NOT charge any prepayment or closure charge for Partial or Full Pre Payment.

Step 9: Property and credit insuranceTo safeguard yourself from loss to the property by fire and other hazards, it is advisable to take a

Property Insurance. This would help you recover your losses to the property in the event of an

untoward incident. A copy of the insurance policy has to be submitted to Home First. All

General Insurance companies offer property insurance.

Credit insurance enables the loan to be repaid by the insurance company in the case of any

unfortunate occurrence to the borrower.

Ask your relationship manager for more details on insurance products.

Step 10: Document checklistSerial No. Document Process

1 Application form To be submitted to Home First for loan processing

2 Processing fee cheque To be given to Home First

3 Sanction letter Issued by Home First to the borrower if loan is

Sanctioned. Original to be retained by borrower.

Copy to be signed and given to Home First

4 Agreement for Sale To be executed between buyer and builder. Original

to be handed over to Home First


5 Construction Agreement To be executed between buyer and builder. Original

to be handed over to Home First

6 NOC No Objection Certificate to be provided by builder

7 Payment receipts from

Builder All payment receipts to be handed over in original

to Home First

8 Sale Deed To be executed between builder and buyer and

registered. Registered document to be

handed

over in original to Home First

9 Loan Agreement To be executed between Home First and

Borrower/co borrowers. A copy will be given to

borrower on request

10 ECS mandate/PDCs To be provided by borrower toHome

First for repayment of loan

*NOTE: Processing Fee Cheque favouring "Home First Finance Company India Private

Limited"

(III) Post – Loan GaayanWell, you just made a huge commitment, and the new responsibility of servicing the loan will

continue for some time now. Here's a to-do list, after taking a loan.

1. Timely re-payments: This should become your second nature. Make sure you never

default on a payment, since even a single default will cost you dearly not only in financial

terms, but will also lower your CIBIL score.

2. Pre-pay as and when possible: Get rid of your home loan burden faster, remember

whatever you pre-pay the amount will directly get apportioned towards your principle.

Just to make it easier RBI has also removed the charges on prepayments.


3. Take advantage of the tax benefits: There are several tax benefits available under Section

24 and Section 80 C of the Income tax Act that will help you save on the interest and

principal amount repaid.

4. Tenure reduction is better than EMI reduction: If you opt to reduce your EMI amount

after pre-paying some part of the loan you end up paying more interest. If it's possible, try

to pay the same EMI as its higher amount every month will ensure your tenure reduction

and save a sizable amount on your interest payments.

5. Paperwork is important: Don't lose your documents like (sanction letters, loan agreements

etc). Until your loan has been fully repaid, make sure all your paperwork is in order; you

have details of the all the repayment records. Once your loan account is closed, make sure

you get a letter from us saying that your loan has been repaid in full and you are in

possession of the original property documents.

JOURNEY OF HFFC

In 2010 first branch opened in Bangalore, with less man power and in 2011 first external fund

raiser with Bessemer ventures. In 2013 reached 1000 loans with good returns. In 2014 turned in

profitable company in housing loans companies. In 2015 Reached customer base of 5000 people.

More than 100 employees are working under HFFC. Our Head Office is in Mumbai and we have

a presence in over 25 cities across 10 States.


BOARD OF DIRECTORS

MR. JAITHIRTH (JERRY) RAO

He is an alumnus of Loyola College in Chennai, Indian Institute of Management in

Ahmadabad and the University of Chicago. In 1998 Mr. Rao founded MphasiS, an IT

Services and BPO Company. Prior to founding MphasiS, Mr.Rao held several positions in

Citibank in various capacities across Asia, Europe, South America and North America. Mr.

Rao is currently the Chairman of the NASSCOM Foundation, Trustee of the Sujaya

Foundation and the Chairman of the India Foundation for the Arts. Mr. Rao has been

honoured by the State of Karnataka with the Rajyotsava Award in 2008. He also won The

Ernst & Young 'Entrepreneur of the Year' Award in the ICT category twice. Besides this,

he is the winner of the Economic Times 'Entrepreneur of the Year' Award and

Distinguished Alumnus Awards from the University of Chicago and Loyola College

MR. SAKTI PRASAD GHOSH'S

Career spans over four and a half decades starting as a Probationary Officer (Class

I) in Reserve Bank of India and retired as Executive Director, National Housing Bank

(NHB). During his career, he was placed on deputation with Unit Trust of India, National


Agricultural Bank for Rural Development (NABARD) and NHB to assist in building these

institutions.

Mr. Ghosh has been involved with Asian Development Bank (ADB) as Financial

Management Specialist-cum-Staff Consultant and was also associated with Vidyasagar

University, West Bengal, as nominee of Chancellor and Governor of West Bengal. Mr.

Ghosh holds a Master's degree in Commerce from Calcutta and a Diploma in Financial

Management from Jamnalal Bajaj Institute of Management (University of Mumbai).

MR. AKHIL AWASTHI

He is the Managing Partner of the Tata Capital Growth Fund. He has completed the

Advanced Management Program from the Harvard Business School, has a First Class

Masters in Business Administration from University of Delhi, and is a qualified Mechanical

Engineer with distinction.

He has over 16 years of private equity experience in India and 23 years of experience in

financial services spanning private equity, asset management and corporate banking and

has been involved with all stages of the private equity lifecycle.

He is also an elected member of the Executive Committee of Indian Private Equity &

Venture Capital Association and a member of Indian Management Association.

MR. MANOJ VISWANATHAN

He holds a Bachelor's degree in Electrical & Electronics Engineering from BITS,

Pilani and an MBA from XLRI Jamshedpur. He possesses an experience of more than 18

years in consumer lending encompassing sectors such as Automobile Loans, Mortgage and

Un-secured Lending. Mr Viswanathan has played an important role in building the branch-

based consumer-lending model for Citigroup in India.


MR. AAKASH GOEL

He is a Vice President with BVP India in Bangalore and focuses on mobile, internet

and software investment sections of the firm. He has 10 years of experience across the

fields of investing, consulting and entrepreneurship.

He currently serves on the boards of Remedinet, HFFC, NetAmbit and is closely

involved in the firm's investments in Hungama.com, MediAssist and Anunta Technologies.

Aakash joined Bessemer from Sequoia Capital where he focused on investing in consumer

internet and payments. Prior to Sequoia, Aakash helped launch a fashion e-commerce

company as a co-founder of the e-commerce venture. Previously he worked with McKinsey

& Co serving clients across India and North America in Technology, Outsourcing and

Financial Services sectors where he helped clients on issues related to business

scale-up/growth, market-entry/strategy, operations transformation, post-merger

integration/turn-around, Capex/Opex right-sizing.

Aakash holds a B.S. from IIT Roorkee and an MBA from IIM Calcutta and was awarded a

merit scholarship at both the institutes for academic excellence.

Aakash is a trained private pilot and an avid mountaineer. A little known fact about him is

that he has trekked up to the Everest Base Camp.

MS. SUJATHA VENKATRAMANAN

She is a MBA in Finance & Marketing and a B.A. (Honours) in Economics from Delhi

University.

Ms.Venkatramanan is a seasoned retail banking professional for over 20 years, with proven

ability to manage portfolio risks across 14 countries, ranging from the Indian subcontinent

and Middle East, to highly volatile Turkey and 'Emerging Europe'. She brings extensive

hands-on experience in Credit Risk Strategy and Management across the Retail Lending

landscape, covering Mortgages, Commercial Real Estate lending, Credit Cards, Personal


Loans, Overdrafts, Auto, Margin Lending, Business Lending, purchase of securitized

portfolios and Structured Products.

She has worked for 18 years with Citibank in various leadership roles across the globe, then

as Head, Risk Advisory for Kairoleaf Analytics (part of the listed AurionPro Solutions

group) and is now an independent consultant in the Banking and Risk Advisory arena.


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