Beruflich Dokumente
Kultur Dokumente
Signature
CHINTAN VADGAMA
Roll No-13
1
Acknowledgement
2
table of contents
List of Abbreviations 5
Executive Summary 6
Introduction 9
Competitors Analysis 24
Graphical Representation 57
Conclusion 76
Limitations 77
Recommendations 78
Bibliography 83
Annexure
3
list of abbreviations
$ Dollar
% Percent
@ at the rate of
ARM Adjustable Rate Mortgage
ATM Automated Teller Machine
EMI Equated Monthly Installments
FRM Fixed Rate Mortgage
FY Financial Year
GDP Gross Domestic Product
HDFC Housing Development Finance Corporation
Industrial Credit and Investment Corporation of
ICICI India
ITR Income Tax Return
LIC Life Insurance Corporation of India
LTV Loan to Value
N.A. Not Applicable
NBFC Non Banking Financial Corporation
NHB National Housing Bank
PAN Permanent Account Number
PFY Previous Financial Year
RBI Reserve Bank of India
Rs Rupee
SBI State Bank of India
TDS Tax Deducted at Source
US United States
YOY Year of Year
4
executive summary
LOAN
SECURED UNSECURED
LOAN LOAN
PERSONAL
LOAN
ON
MOVABLE ON
IMMOVABLE
UNSECURED LOAN:
Unsecured loans are monetary loans that are not secured against
the borrowers assets. These may be available from financial
institutions under many different guises or marketing packages:
credit card debt
personal loans
bank overdrafts
credit facilities or lines of credit
5
corporate bonds
SECURED LOAN:
A secured loan is a loan in which the borrower pledges some asset
(e.g. a car or property) as collateral for the loan. In today's world the
meaning of the term secured loan is better understood only when
we see that the maximum number of people purchases their homes
with a mortgage. The term mortgage industry which has flourished
the world's housing market is simply meant as a process by which
the individual and the business can purchase the residential and the
commercial property without paying the total value.
PARTIES IN A MORTGAGE:
In a mortgage dealing with the borrower is called as the mortgagor
on the one hand and the lender is called as the mortgagee on the
other.
6
7
UNSECURED LOAN:
The which is taken without keeping any collateral and the amount
taken as loan can be used for any personal need. The interest
rate on unsecured loan is higher as compared to secured loan.
8
introduction
COMPANY PROFILE:
FULLERTON OFFER:
Fullerton India- Parivaar and Vyapaar
Fullerton offer a range of financial products and solutions, tailor
made for salaried class and the small sized shop owners and
entrepreneurs.
FULLERTON-PARIVAAR
Parivaar loan covers following range of products:
Unsecured Personal Loan
Secured Loans
Home Finance
Home Equity Loans
9
FULLERTON-VYAPAAR
Vyapaar provide a aid to business man for further growth in
business, for renovation of shop .Fullerton India Vyapaar strives to
improve the business and lives of small business community.
10
SALIENT CONTRIBUTIONS OF THE PROJECT:
Providing backbone to vertical Home Loan and Loan Against
Property and providing necessary inputs to company for increasing
market share and reducing default while dealing in Mortgage Loan
in Jabalpur.
11
OVERVIEW ON MORTGAGE LOAN:
A Mortgage Loan is offered on mortgage property which can range
from personal mortgage property to commercial or real estate
properties. Properties are kept under mortgage as a security for
paying off a loan. The term “mortgage” is often used in the same
breath as a “mortgage loan.”
12
The creditor is an individual or institution who has legal rights to the
debt secured by the mortgage and often makes a loan to an
individual of the purchase money for the property. In terms of
institutions, the creditor can be banks, insurers or other financial
institutions. He maybe called as mortgagee or lender.
The debtor is the person who takes the mortgage loan from the
creditor and must meet the mortgage conditions imposed by the
creditor in order to avoid the creditor enacting provisions on the
mortgage to recover the debt. Usually a debtor can be an
individuals, landlords or businesses. The debt issued on the
mortgage is also referred to as hypothecation which will use the
services of a hypothecary to assist in the process. He is also known
as mortgagor, borrower or obligor.
13
FIXED RATE MORTGAGE:
The FRM rates on mortgages remain the same over the tenure of
the debt which with interest rates a bit higher than 30 year treasury
bonds at the time the mortgage is issued. The debtor is required to
pay the interest on the mortgage or the mortgage rate and a little
bit of the principal with the interest on the principal falling over
time. In case of the ARM, the mortgage rate may change in
response to the Treasury Bill rate or the Prime Rate.
The leading mortgage loan providing banks in the case of India are
HDFC, LIC HOUSING FINANCE, ICICI and SBI.
14
NBFC’s, corporative institutions are the main source for finance for
the housing sector .Home loans connotes finance for meeting the
various needs relating to housing namely:
Purchase of flat or house
Acquisition of a plot and construction of a house
Construction of house
Extension of house
Repairs ,renovation and upgradation of a house/ flat
Taking over home loan from other banks / housing finance
companies.
EMI CALCULATION
EMI's Calculation
Where
r = Interest rate at which customer have taken the
loan
n = tenor of the loan
15
EMI are calculated on monthly reducing balance. This means
that customer are charged interest only on the outstanding principal
every month.
Eligibility Calculation
Loan Amount =
EMI
16
Definition of Mortgage Company:
A mortgage company can be defined as a company specializing in
offering mortgage services such as free mortgage quotes,
calculators and guides and unmatched customer services such as
instant approval of mortgage loan applications.
Mortgage companies can offer both FRM (Fixed Rate Mortgage) and
ARM (Adjusted Rate Mortgage) schemes to borrowers. While ARM
means that the mortgage rates will not remain the same over the
tenure of the loan, interest rates will usually remain stable in case of
FRM.
17
New home loans
Mortgage refinancing
Most importantly, free online loan application facilities giving instant
approval can boost the popularity of the mortgage company a great
deal.
18
NBFC’s
US $ Billion FY 03 FY 02
Housing Finance Companies 3.91 3.24
Banks Direct 5.24 1.91
Banks Indirect 1.51 1.26
Total Direct 9.15 5.15
Growth Rate % 77.6 27.5
Sources: All figures in the above table are calculated and Industry
estimates.
19
Home Loan Disbursement In India
The home loan disbursement by the banks and housing finance
companies has increased from Rs.29359.29 Crores in 2001-02 to
Rs.51672 .7 Crores in 2002-03.
Home Loan Disbursement (Rs.In Crores)
Years HFC's Banks
1999-00 9812.03 9911.35
2000-01 12637.85 9787.24
2001-02 14614.44 14744.85
2002-03 17832.17* 33840.53
Sources: -National Housing Bank
20
Besides all nationalized bank/private banks/NBFC, there are some
local money lenders all which provide mortgage loan to common
people.
1) NAGOD JEWELERS :
PURPOSE: For any reason
DOCUMENTATION: No documents required (based on trust
bases)
INTEREST CHARGED: 3% per month @ flat rate
SECURITY: Gold and Silver
VALUATION OF FUNDING: Based on market value of gold
and silver
TENURE: 3 years
21
REASONS FOR QUITTING FROM MORTGAGE LOAN ARE:-
22
MARKET SHARE OF MORTGAGE PLAYER’S IN JABALPUR:
Other Players
23
LIC HOUSING FINANCE
PRODUCTS
LIC HOME LOAN
PURPOSE:
For purchase of land
For purchase of house/flat/row house
For construction of house on existing land
ELIGIBILITY:
Minimum age should be 24 years at the time of sanction of
loan.
Loan provided to salaried as well as to self-employed .
DOCUMENTATION:
24
FOR SALARIED:
Pay slip for last 3 months
Bank statement for last 6 months
PAN CARD Xerox
Form 16
Address proof
FOR SELF-EMPLOYED:
Income tax return
Bank statement for last 6 months
Identity proof
Address proof
LOAN AMOUNT:
Minimum Rs.3 lakh
Maximum: Unlimited based on debtor’s capability
Margin: 85% of property value
25
LIC LOAN AGAINST PROPERTY
PURPOSE:
For any purpose
ELIGIBILITY:
Minimum age should be 24 years at the time of sanction of
loan.
Loan provided to salaried as well as to self-employed
DOCUMENTATION:
FOR SALARIED:
Pay slip for last 3 months
Bank statement for last 6 months
PAN CARD Xerox
Form 16
Address proof
FOR SELF-EMPLOYED:
Income tax return
Bank statement for last 6 months
Identity proof
Address proof
LOAN AMOUNT:
Minimum Rs.3 lakh
Maximum: Unlimited based on debtor’s capability
Margin: 60% of property value
TENURE: Maximum: 15 Years
PROCESSING CHARGES: .5% of loan amount
LEGAL SEARCH CHARGES: NIL
26
STAMP CHARGES: .5% of loan amount
CHEQUE BOUNCE CHARGE: 2% of EMI amount
27
ICICI BANK
PRODUCT
ICICI HOME LOAN:
PURPOSE:
For purchase of land
For purchase of house/flat/row house
For construction of house on existing land
For extension of current living space
ELIGIBILITY:
Minimum age should be 21 years at the time of sanction of
loan.
Loan provided to salaried as well as to self-employed and also
to NRI who are salaried
DOCUMENTATION:
FOR SALARIED:
Pay slip for last 3 months
Bank statement for last 6 months
28
PAN CARD Xerox
Form 16
Address proof
Track record of existing loan
FOR SELF-EMPLOYED:
Income tax return/auditor report
Bank statement for last 6 months from operating account
Identity proof
Office/residence address proof
Passport size photograph
LOAN AMOUNT:
Minimum Rs.10 lakh
Maximum: Unlimited based on debtor’s capability
Margin: 85% of property value(including registry cost)
29
ICICI LOAN AGAINST PROPERTY
PURPOSE:
• For expanding business
• For child marriage
• For children education
• For traveling
• For renovation of house
ELIGIBILITY:
• Minimum age should be 21 years at the time of
sanction of loan.
• Loan provided to salaried as well as to self-
employed
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• T.D.S. Form 16
• Address proof
• Back link property paper
• Map
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
30
• Passport size photograph
31
LOAN AMOUNT:
• Minimum Rs.10 lakh
• Maximum: Unlimited based on debtor’s capability
• Margin: 60% value of residential property/45% of
commercial property
employed
documents
32
HDFC BANK
PRODUCT
HDFC HOME LOAN
PURPOSE:
• For purchase of land
• For purchase of house/flat/row house
• For construction of house on existing land
• For extension of current living space
ELIGIBILITY:
• Minimum age should be 21 years at the time of
sanction of loan.
• Loan provided to salaried as well as to self-
employed
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• Form 16
33
• Address proof
• Track record of existing loan
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
• Passport size photograph
LOAN AMOUNT:
• Maximum: Unlimited based on debtor’s capability
• Margin: 85% of property value(including registry
cost)
34
• Maximum: 8days after submission of documents
35
HDFC LOAN AGAINST PROPERTY
PURPOSE:
• For expanding business
• For child marriage
• For children education
• For traveling
• For renovation of house
ELIGIBILITY:
• Minimum age should be 21 years at the time of
sanction of loan.
• Loan provided to salaried as well as to self-
employed
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• Form 16
• Address proof
• Track record of existing loan
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
• Passport size photograph
36
LOAN AMOUNT:
• Maximum: Unlimited based on debtor’s capability
• Margin: 50% of property value(including registry
cost)
37
AXIS BANK
Axis Bank was the first of the new private banks to have begun
operations in 1994, after the Government of India allowed new
private banks to be established. The Bank today is capitalized to the
extent of Rs. 358.56 crores with the public holding (other than
promoters) at 57.60%. Presently, the Bank has a very wide network
of more than 701 branch offices and Extension Counters. The Bank
has a network of over 2854 ATMs providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM
networks in the country. Axis Bank allows it client to prevail the
facility of taking home loan and loan against property for purchasing
house/land.
PRODUCT
AXIS HOME LOAN
PURPOSE:
• For purchase of plot
• For purchase of new house
• For construction of house on existing land
• For extension of current living space
• For takeover of existing loan
ELIGIBILITY:
• Minimum age should be 24 years at the time of
sanction of loan.
• Loan provided to salaried as well as to self-
employed
38
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• Form 16
• Address proof
• Track record of existing loan
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
• Passport size photograph
LOAN AMOUNT:
• Minimum: Rs.1 lakh
• Maximum: Rs.50 lakh
• Margin: 85% of property value(including registry
cost)
PROCESSING CHARGES:
• 1% of loan amount + service tax i.e.12.36%
39
LEGAL CHARGES: Rs.400-600
SECURITY: Registry papers
STAMP CHARGES: 1% of loan amount + Rs.310 stamp
CHEQUE BOUNCE CHARGE: Rs.500 per cheque bounce + Rs.63 as
Service tax
CHARGES FOR CHANGING RATES: 1% of outstanding principle
amount
NUMBER OF DAYS FOR SANCTIONING OF LOAN
• Maximum: 7 days after submission of documents
PURPOSE:
• For expanding business
• For child marriage
• For children education
• For traveling
• For renovation of house
ELIGIBILITY:
• Minimum age should be 24 years at the time of
sanction of loan.
• Loan provided to salaried as well as to self-
employed
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
40
• PAN CARD Xerox
• Form 16
• Address proof
• Track record of existing loan
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
• Passport size photograph
LOAN AMOUNT:
• Maximum: Unlimited based on debtor’s capability
• Margin: 85% of property value(including registry
cost)
INTEREST CHARGE:
• For residential: 12.75 % @ reducing rate
• For commercial:13.75% @ reducing rate
41
CHARGES FOR CHANGING RATES: 1% of outstanding principle
amount
NUMBER OF DAYS FOR SANCTIONING OF LOAN
• Maximum: 7 days after submission of documents
42
SBI BANK
SBI Bank is a one of the largest nationalized bank in India. This bank
is actively involved since 1973 in non profit activity called
Community Service Banking. SBI Bank helps common man to fulfill
their dream of making his own house into reality by providing wide
range of loan products.
PRODUCT
SBI HOME LOAN
PURPOSE:
• For purchase of plot
• For purchase of new house
• For construction of house on existing land
• For extension of current living space
• For takeover of existing loan
ELIGIBILITY:
• Minimum age should be 18 years at the time of
sanction of loan.
• Maximum 70 year is fixed at which borrower should
the loan should be fully repaid
• Loan provided to salaried as well as to self-
employed
43
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• Form 16
• Address proof
• Track record of existing loan
• Voter id/ driving license\
• Copy of approved plan
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
• Passport size photograph
• Copy of approved plan
LOAN AMOUNT:
• For purchase/construction 15% for loan up to Rs.1
Cr and 20% for loan above Rs.1 Cr
• For repairs/ renovation :15%
44
PROCESSING CHARGES:
• .50% of loan amount (including service tax)
ELIGIBILITY:
• Minimum age should be 24 years at the time of
sanction of loan.
• Maximum age limit-60 year
• Loan provided to salaried as well as to self-
employed and to engaged in agriculture activities
45
• For salaried net monthly income should exceed
Rs.12000 or net annual income exceed
Rs.150000
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• Form 16
• Address proof
• Track record of existing loan
• Copy of approved plan
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
• Passport size photograph
• Copy of approved plan
• Land/building tax paid receipt
• Sales deed
• Agreement of sales
• Non encumbrance certificate
LOAN AMOUNT:
• Minimum amount: Rs.25000
46
• Maximum amount: Rs.1 Cr
• Margin: 75% of property value(including registry
cost)
INTEREST CHARGE: 13% @ floating rate
TENURE: Maximum: 20Years
PROCESSING CHARGES:
• .50% of loan amount
• Minimum charge: Rs.500
• Maximum charge: Rs.10000
47
SBI REVERSE MORTGAGE LOAN
PURPOSE:
• Supplementing income
• Any personal expenses
• House repairs
ELIGIBILITY:
• No. of borrowers: Single or jointly with spouse in
case of a living spouse
• Age of first borrower :Above 60 years
• No. of surviving spouses on the date of sanction of
loan: Should not be more than one. Borrowers
will have to give an undertaking that they will
not remarry during the currency of the loan. If the
borrowers choose to remarry, the loan will be
foreclosed.
• Age of spouse: Above 58 years
• Residence: Borrower should be staying at self-
acquired and self owned house /flat against which
loan is being raised, as his permanent primary
residence.
• Title of the Property: Case– Title in single name
and loan availed jointly with spouse. Title holder
should make a Will in favour of the other spouse.
The Will should confirm that this is the last Will and
that it supercedes all earlier wills, if any. The
borrower to undertake that no fresh Will shall be
made during the currency of the loan.
48
• Encumbrances: The property should be free from
any encumbrances. However in case of property
purchased by availing Home Loan from SBI and
mortgaged to SBI, it will be considered for
RML, subject to closure of the Home Loan account
out of the proceeds of RML.
DOCUMENTATION:
• Property papers
• Map sanctioned
• Back linking paper of land
LOAN AMOUNT:
• Minimum amount: Rs.3 lacs
• Maximum amount: Rs.1 Cr
• Margin- 90% of the property value
PROCESSING CHARGES:
• .50% of loan amount
• Minimum charge: Rs.500
• Maximum charge: Rs.10000
49
CHARGES FOR CHANGING RATES: 1% of outstanding principle
amount
50
NUMBER OF DAYS FOR SANCTIONING OF LOAN
• Maximum: 7 days after submission of documents
51
SOURCING PROCEDURE BY DIFFERENT FINANCIAL
INSTITUTIONS IN JABALPUR
COMPANY NAME SOURCING METHODS
D.S.A., home loan agents, customer
LIC Housing relationship associates, direct dealing with
Finance customers through net, advertisements.
ICICI Home Loan Individual sourcing, reference, specialized
Finance marketing team, contacting builders.
Campaign, contacting builders,
advertisements, telephone directory,
HDFC LTD. references.
Fullerton India sales zoning, pre-marketing activities,
Credit Ltd. references
Individual sourcing, reference, contacting
Citi Financial through net, directory, advertisements.
Campaign, contacting builders,
advertisements, telephone directory,
SBI Bank references.
Other Players references, contacting builders
52
INTRODUCTION
Risk is a concept involving negative impact to value that may arise
from a future event, or we can say that "Risks are events or
conditions that may occur, and whose occurrence, if it does take
place, has a harmful or negative effect. Risk is also considered as an
uncertain event that can lead to certain losses in future. An event to
the consequences of uncertainty constitutes a risk. In everyday
usage, risk is often used synonymously with the probability of a
known loss.
CREDIT RISK: The credit risk affects the fund based activities of
the financial services .this risk arises in evaluating the proposals for
lending. Credit risk involves over-funding by the financial services
to their debtors and underestimating liabilities of the debtor.
INTEREST RATE RISK: The interest rate risk arises when there are
frequent changes in the interest rates in the market. Though we
had a fairly stable interest rate regime prior to the economic and
53
financial sector reforms, the interest rates are volatile in the past
five years. These rates keep on fluctuating as per the changes made
by RBI in their fiscal policy i.e. CRR . According to the present
scenario RBI has increased the cash reserve ratio which inturn
affects the prime lending rate offered by different financial
institutions.
INTENTIONAL RISK:
54
Intentional risk is those risk in which debtor obtain loan
amount from fraud, forgery. Debtor with pre-determined intension
get their fraud documents made same as original documents like
showing illegal property document as legal property document,
showing fraud PAN CARD, giving wrong address proof etc.
Intentional risk can be eliminated whereas circumstantial risk can
only be mitigated not eliminated.
55
EXPLANATION OF MULTIPLE CAUSE DIAGRAM FOR DEFAULT
IN MORTGAGE INDUSTRY:
Default is considered to be the main effect that results in
winding up of any financial institution. Default is considered as a
situation where a company is unable to recover its debt amount
from its customers.
The above diagram gives a holistic view or picture of cause and
effect of default in mortgage industry. There are many causes which
results in default of case .The main causes which results in default
are:
1) Over Funding: Over funding is again became an effect
which are caused by property valuation mistake and
by unchecked liability.
2) Wrong document assessment : When the documents of
customer are not valuated properly results in default
which are in turn caused by employee carelessness
and by malafied intentions of employee.
3) Circumstances: Circumstances are the situation which
arises because of some unpredictable situations in
future. These can be as follows:-
a) Debtor’s Suspension
b) Death of debtor’s
c) Natural Calamity
d) Medical Problem
56
All the above points reflect us cause and effect of resulting in
default of cases in financial institutions.
RESEARCH METHODLOGY
MEANING OF RESEARCH
Research Methology is a way to systematically solve the
research problem. It may be understood as Science of studying how
research is done, Scientifically in it we study the various steps that
generally adopted by a reseacher in studying his reseach problem
along with the logic behind them. “Accuracy of the study depends
on the systematic application of the method.” The researcher has to
decide the method to be used that helps him to get a desired
direction in a systematic way.
Definitions
According to Clifford Woody
“Research comprises defining and redefining problems,
formulating or hypothesis or suggested solutions collecting:
organizing and evaluating data making deductions and reaching
conclusions to determine whether they fit the formulating
hypothesis.”
Thus, Research Methodology is a strategy that guides a
researcher in providing answers to research questions and for this
research survey is being done.
Research in common parlance refers to a search for
knowledge. In fact research is an act of scientific investigation.
57
Steps of Research process
The seven major steps
58
OBJECTIVE-
To estimate the market share of mortgage loan in Jabalpur.
To understand customers need for mortgage loan and the
lenders
There preferred rates and problem faced by them while taking
loan
Reducing risk in mortgage loan
Sampling Design-
Sampling is the selection of some part of aggregate or totality
on the basis of which a judgement or inference about the aggregate
or totality is made.
Sampling Unit-
The sampling unit of my survey includes the existing and non
existing customer required loan for their automobile. This suvery
was done with the help of proper questionnaire.
Sampling Size-
In my survey,I have used a sample unit of 250 salaried
respondents.
Sampling Method-
In my survey,I have used Simple Random Sampling Method.In
this I administered a structured questionaire and personal interview.
Data Collection-
Data Collection was done in two ways they were-
1. Primary Data Collection
2. Secondary data Collection
59
Primary Data Collection –
Primary Data was collected by using structured questionaire and by
taking interviews of the respondents.A structured questionaire was
formulated after conducting a pilot Survey.
60
PROCESSING AND ANALYSIS OF DATA WITH THEIR
INTERPRETATION:
17%
Not Interested
INTERPRETATION:-
Approximate population of Jabalpur is 8 lakh out of which
approximately 50% are from the salaried class . Taking average size
of 5 member in 1 family i.e. 80000 family in whole Jabalpur town are
from the salaried class. According to survey, the percentage
distribution who have already taken a mortgage loan tells us that
around 54400 family are there who has already taken mortgage
loan where as 17% of the total family i.e.13600 family are not
interested in taking a mortgage loan and around 15% of the total
family in Jabalpur i.e.12000 family have not yet taken mortgage
loan but they are planning to take loan in future.
61
According to this survey, we can say that there are still 12000
houses untouched in Jabalpur for mortgage loan .Hence, we can say
that there is a market of around 12000 in mortgage loan who are
planning for the loan where as around 10% i.e.1360 houses from the
family who are not interested in taking mortgage loan can be
converted into taking loan by using some marketing strategy.
14, 8%
INTERPRETATION :
This chart represents the percentage distribution of actual
lenders from which the sample have taken mortgage loan. As we
can see that the maximum percentage is of SBI and this can be
due to the following reason:
1. SBI covers a large area having many branches in town and in
surrounding villages
2. Policy and norms are lenient as compared to others.
62
3. Many customers prefer to take loan in which they have bank
account
Others contributes the second highest share as it comprises
many small financial institutes like Allahabad bank, Canara Bank,
Punjab National Bank and local players also. LIC shows the third
highest share as a actual lender because its policy are lenient .
63
CHART REPRESENTING PURPOSE FOR TAKING A LOAN BY THE
SAMPLE WHO HAS ALREADY TAKEN A MORTGAGE LOAN
17, 8%
45, 22%
46, 22%
INTERPRETATION:
As we can see from the chart , purchase of new land
contributes as the highest share as a purpose for those who have
already taken mortgage loan. The following may be the reason for
the purchase of land:
1. As a investment tool
2. For fulfilling existing need for construction of house on that
land
Purchase of house shows a second highest share in the chart
stating the facts such as:
As an investment tool
For an immediate need of a house.
64
CHART REPRESENTING RANGE OF AMOUNT OF LOAN TAKEN
BY THE SAMPLE WHO HAS ALREADY TAKEN A MORTGAGE
LOAN
76
80
70 61
60
No. of people
50
40
30
17 17
20
10
0
Less then 5 Lac 5 to 10 Lacs 10.1 to 15 Lacs 15.1 & above
Amount Range
INTERETATION:
As we have calculated above that out of total family i.e.80000 only
54400 family have taken loan .So we can conclude from the above
chart that 36% of the family have taken amount less than 5 lacs i.e.
19584 family whereas 44% of the family ranges in 5-10 lacs i.e.
23936 family .Amount range from 10.1-15 lacs and 15.1 and above
have 10% family individually i.e.5440 family in both the ranges.
65
CHART REPRESENTING MAXIMUM RANGE OF INTEREST RATE
AT WHICH THE SAMPLE WHO HAS ALREADY TAKEN A
MORTGAGE LOAN
60 55
50 45
39
No. of people
40
31
30
20
10
0
5-7.5% 7.5-10% 10-12.5% 12.5-15%
Range
INTERPRETATION:
From the above chart we can depict that maximum range in which
the customer charged interest rate comes under 10-12.5% and the
second highest range of charging interest rate by customer is
between 12.5-15%.The reason why customer prefer to go for higher
interest rates is due to the following reasons:
1. Unable to get Loan from preferred rates and from desired
lender
2. The customer which are ranging from 5-7.5% generally belong
to government sector and prefer to take loan from heir
department . But department generally don’t provide them
desired amount of loan due to which they take remaining
amount of loan from some other financial institution at higher
rate.
66
3. Time taken to get loan by financial institution results in
switching to institution who offer them loan amount at higher
rates.
4. Needy based customers prefer to take loan at higher rate
offered by financial institution.
CHART REPRESENTING MAXIMUM TENURE PREFERED BY THE
SAMPLE SIZE WHO HAS ALREADY TAKEN MORTGAGE LOAN
90 81
80
70 59
no. of people
60
50
40
30
14 17
20
10
0
5-10 11-15 16-20 21 & above
range
INTERPRETATION:
This chart help us to analyze the maximum tenure preferred
by customer for repaying the whole loan amount with interest who
have already taken mortgage loan. Maximum Tenure preferred by
the customer ranges from 16-20 years is highest i.e.47% of family
because maximum lenders offer loan at interest rate between 10-
12.5% .
11-15 years of tenure is the second preferred range by the
customer i.e.35% because of the following reason:
1. Less interest rate offered by the financial institution
2. Less amount of loan taken by customer
67
Tenure ranging from 5-10 year comprises only 8% of the total
family who have taken mortgage loan. This has a lesser share
because of higher EMI, customer taken loan for tax rebate.
Tenure above 21 & above has 10% of share i.e. only 10% of
total family preferred loan tenure to be above 21 & above because
of the following reason:
1. Prime lending Rate have been increased which in turn affects
the EMI paid by the customer. So, generally customer take longer
tenure to Reduce the EMI.
2. This category also includes customer who have taken loan of
higher amount.
68
CHART REPRESENTING NUMBER OF PEOPLE FACING
PROBLEMS WHILE TAKING MORTGAGE LOAN
24, 14%
147, 86%
INTERPRETATION:
This chart clearly tells us about the percentage distribution of
the number of people who have already taken a loan and have
faced problem while getting mortgage loan. Out of 171 family 147
family have not face any problem while getting loan. The rest 24
family have faced problem for getting loan because of following
reason:
1. Number of days taken by institution to sanction the loan
2. Slow processing of documents
3. Strict policy of institution
69
CHART REPRESENTING PEOPLE WHO OWN PROPERTY AT THE
TIME OF TAKING LOAN BY A SAMPLE SIZE WHO HAVE
ALREADY TAKEN A MORTGAGE LOAN
74, 43%
YES
NO
97, 57%
INTERPRETATION:
From this pie chart we can see that there are 97 family out of
171 family who have taken mortgage loan and have already
property owned by them at the time of taking mortgage loan .This
can be interpreted from the above data that these family took loan
for some personal reason i.e. Loan Against property is preferred
here by the customer whereas 74 family have no property owned by
them at the time of taking loan that helps us to analyze that these
family prefer to taken home loans may be for their existing need or
to fulfill their investment need .
70
CHART REPRESENTING EARNINGS OF INDIVIDUALS WHO
HAVE TAKEN A MORTGAGE LOAN
60 52 53
50 45
no. of people
40
30
20
20
10
0
5000-15000 15001-25000 25001-35000 35001-above
range
INTERPRETATION:
This chart represents earnings/month of individuals who have
taken loan. The maximum range varies between 15001-25000 and
25001-35000. Financial institutions should prefer this category
because of their efficient earnings which help them to pay the EMI
on regular basis and reduces the chance of case getting default.
Range between 5000-15000 earnings/month also provide a good
contribution to the sanctioned loan .Therefore this category need to
touched but should check their liability before giving loan to these
category. Individuals whose earnings/month belongs to 35001-
above generally prefer loan only for tax rebate not as their
requirement so only 20 family out of 171 family prefer to taken
loan .Basic focus of institution should be on these 3 range after
checking their liability because these are the most prospect
customer for financial institutions.
71
CHART REPRESENTING NUMBER OF PEOPLE WORKING IN A
FAMILY WHO HAVE ALREADY TAKEN A MORTGAGE LOAN
140 117
total no. of families
120
100
80
60 40
40
20 10 4
0
1 2 3 4
no. of people working
INTERPRETATION:
This graph helps us to check the financial liability of the
customer before sanctioning of loan amount. Through this graph
we can interpretate that maximum customer having only 1 earning
member in their family while taking loan .It implies that the
customer earning/month is good enough to repay the EMI on regular
basis and to their liability is least .
72
ANALYSIS OF THAT SAMPLE WHO HAS NOT YET TAKEN BUT
ARE PLANNING TO TAKE MORTGAGE LOAN IN FUTURE:
3, 8% 6, 17%
6, 17%
INTERPRETATION:
As we have already observed from the above percentage
distribution chart which represents number of family who have
already taken mortgage loan or those family who are not interested
in taking loan as well as those family who are planning to take loan
in future.
As we have calculated that there are around 12000 families in
Jabalpur town who are planning to take loan in future. As per the
survey those sample size i.e. 37 sample gave their purpose for
taking loan in future. This graph represents the proposed purpose
for which they are planning to take mortgage loan. 28% of total
12000 families i.e.3360 family are planning to take loan for
purchase of house where as 2280 families are planning to take loan
73
for the purpose of renovation of their existing house and around
2040 families are planning to take loan for purchase of new land.
From this survey we can say that basically the untouched market is
keener in home loan whereas only 960 families are there who are
planning to take loan against property for some other reason.
74
CHART REPRESENTING PREFERRED LOAN AMOUNT BY THOSE
SAMPLES WHO ARE PLANNING TO TAKE MORTGAGE LOAN IN
FUTURE
30 26
25
no. of people
20
15
10 8
5 1 2
0
Less then 5 Lac 5 to 10 Lacs 10.1 to 15 Lacs 15.1 & above
amount range
INTERPRETATION:
From this chart we can say that maximum number of sample
size i.e. from 37, 26 sample belong to the range amount of 5-10
lacs whereas only 5 sample belong to less than 5 lacs and only 1&
2 belong to 10.1-15 lacs and 15.1 & above range respectively.
75
CHART REPRESENTING PREFERRED LENDER FOR TAKING
LOAN BY THOSE SAMPLES WHO ARE PLANNING TO TAKE
MORTGAGE LOAN IN FUTURE
12 10
10
no. of people
8 7 7
6
6 5
4 2
2
0
L
I
S
C
FC
I
IC
IA
SB
ER
LI
IC
C
HD
AN
TH
O
IN
T IF
lender
CI
INTERPRETATION:
Here in this chart maximum sample prefer to take loan from SBI,
second preferred lender is LIC where as other institutes also holds
second preferred lender because it include all small institutes like
Allahabad bank, Canara bank , Dena bank etc. reason for SBI
preference are as follows:
1) Many branches of SBI in town
2) Many customer prefer to take loan from the bank where they
have their personal account.
76
CHART REPRESENTING PREFERRED INTEREST RATE AT
WHICH SAMPLES ARE PLANNING TO TAKE MORTGAGE LOAN
IN FUTURE
20
16
14
15
no. of people
10
7
5
0
0
5-7.5% 7.5-10% 10-12.5% 12.5-15%
rate range
INTERPRETATION:
As from the above result we can say that most preferred interest
rate at which sample wants to take loan is 7.5-10% and 5-7.5%. Its
will always preferred by customer to pay less interest on their loan
amount.
77
CHART REPRESENTING WHAT WILL ATTRACT MORE WHILE
TAKING THE LOAN IN FUTURE BY SAMPLES WHO ARE
PLANNING TO TAKE LOAN IN FUTURE
20
15
no. of people
15
11 11
10
0
INTEREST RATE COMPANY BRAND SERVICE PROVIDED
priority
INTERPRETATION:
This chart helps us to indicate the preference of customer who
wants to go for mortgage loan in future. From this chart we can see
that maximum number of customer gets attracted towards
institutes who offer less interest rate on mortgage loan. Company
brand and service provided are the second preferences of the
customer. Both showing equal share in this chart.
78
CHART REPRESENTING DECISION OF THOSE SAMPLES WHO
ARE PLANNING TO TAKE MORTGAGE LOAN IN FUTURE
FOR TAKING LOAN WHEN LENDING RATE INCREASES
15, 41%
YES
NO
22, 59%
INTERPRETATION:
This chart helps us to know customer decision when institutes
increase their lending rate or interest rate. According to this chart
we can say that around 59% of 37 sample will delay their decision
for taking loan whereas around 41% of 37 sample will not delay
their decision of taking loan.
79
conclusion
80
limitations of the project
81
recommendations
Lower EMI's
Lower EMIs for repayment for loan may be considered by way
of lower rate of interest and or extended period of repayments.
EMI may be considered to vary as per the repaying capacity of the
customers from time to time basis. As per the survey
conducted we came to know that the interest rates
preferred by the customers are between 7.5-10% and 10-12.5%
while the those of Fullerton are quite higher as compared to
others .Therefore they must emphasize on its rates.
Discounts/Incentives
Today we are living in a world of discounts and incentives. By
offering more discounts and incentives to the customers,
Fullerton will be branded as a market leader.
Liberalized policy
Company must adopt a liberalized policy while providing
loans. It doesn’t mean that it should be too liberal so that there
might be many loop holes but liberal enough so that a
customer can get loan without much trouble. They should
also provide a higher loan sanction amount limit to their branch
82
managers so that they don’t have any problem to provide
loan of higher amount.
Mass Marketing
In this highly competitive world there is a need to do mass
marketing to tell the potential customers about the services
been offered by the Fullerton, it would definitely help increase the
customer base. More promotion activities should be
undertaken.
Market penetration:
While indulging in the mortgage loan, company should
remember that housing sector has great economic significance for
the country and taking the Jabalpur region, to increase its
share it has promote its products as well as the company’s name.
It should also concentrate to cover a larger area since taking
into consideration the physical boundaries of Jabalpur since
Fullerton has a very less branches.
83
Opportunity Strategy
It is well know fact that high non performing assets, poor
services and slow technology adoption by the financial
institutions is making the customers to think twice whether to
continue or otherwise with such institutes. By overcoming these
shortcoming, there is a need to evolve opportunity strategies for
providing better services/facilities to gain the confidence of
present and prospective customers with the sole aim of the
making them satisfied and delighted, thereby increasing the
standard of living of the people as well as increasing the standard
of living of the people as well as increasing their financial
status. This will serve as long term gains for the nations economy
and will enhance the permanency of the customers towards
Fullerton.
Reducing malpractice
Establishing a good and healthy relationship with co-workers
by motivating them through different ways and providing
them a feeling of togetherness and cohesiveness so that they
do not indulge in any type of wrong intensions which might be
hazardous for the enterprise.
84
Local Valuer:
Valuer is a person who does technical assessment of property,
therefore that person should belong to local region so that he
can properly evaluate the property and the client itself.
85
GUIDELINES FOR THE IMPLEMENTATION BASED ON
CONCLUSIONS:
From the conclusion we can clearly see that if Fullerton
increases its share it can do a business of 90 crores. We can
suggest them to increase there branches in Jabalpur so that they
can cover a larger area as well as to sharpen there policy and
structure for the mortgage loans.
86
bibliography
Websites referred:
1) www.nhb.com
2) www.fullertonindia.com
3) www.guidetohomeloans.com
4) www.wikipedia.com
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annexure
88
Have you faced any problem while getting the
mortgage loan?
a) Yes b) No;
If yes, then specify the problem:
_______________________________________________________________
89
e) Others
90