CHAPTER - 1

INTRODUCTION
Housing is a primary human need next in importance only to food and clothing. A first
priority for a youngster who begins life is therefore to plan for a house. This takes
precedence over other household expenditure and creature needs. Housing, however,
is a major expenditure and cannot be funded out of a family's normal monthly income or
savings. The prospective homeowner must look for a loan substantial in size and so
structured that he can repay it over a longer period of time, in many cases almost one's
entire working life.

Loan is offered to a borrower to purchase or build a new house on the basis of his/her
eligibility and the bank's lending rules. One of the important basic human needs is
shelter. House is the ultimate dream of every middle class family. Government gave
encouragement for house finance subsidiaries by offering number of tax concessions to
individuals. With the overall encouragement given to this sector, a number of players
entered in housing finance.

One of the most important benefits of taking a home loan is the interest rate that is
allowed on the home loan. Fixed and variable interest rate options are also available for
home loans. Many financiers also offer home improvement loans at the same interest
rate as they offer the home loans.
Housing finance is a broad topic, the concept of which can vary across continents,
regions and countries, particularly in terms of the areas it covers. For example, what is
understood by the term “housing finance” in a developed country may be very different to
what is understood by the term in a developing country.

The International Union for Housing Finance, as a multinational networking

organisation, has no official position on what the best definition of housing finance is.

Housing is a significant engine for growth and development of the economy. Housing
and housing finance activities in India have witnessed tremendous growth over the years. Some
of the factors that have led to this growth are - tax concessions to borrowers, increase in
disposable income levels, changing age profile of the borrowers, easy availability of loans,
nuclear families and urbanization, etc. The proportion of Mortgages to the Gross Domestic
Product (GDP) ratio for India is much lower than that for developed countries. As per 11thFive
Year Plan (2007-2012) the total number of houses that would be required cumulatively in the
plan period is slated at 45 million units (7 million backlog plus 38 million additional units) which
will require an investment of around Rs.10 trillion between 2007-2012, i.e. Rs.2 trillion per year.
OBJECTIVE OF THE STUDY
1. To find the factors that motivates a person to take loan from banks.

2. To check the level of awareness about house loan schemes.

3. To know about the satisfaction level of customer in respect taking loan.

4. To compare the house loan scheme of different banks and various other sources.

5. To identify the before the bank.

6. To find out which sector is preferred more.

 SCOPE OF THE STUDY
Scope of the project is very vast . The entire factor influencing the customer having the
housing loan is studied .Here customers of different classes like business segments ,service
segment,professional segments etc are in excess ,the in at finding the factor influencing the
customer.

For purpose of the study the respondents were selected and for gathering information
about the loan schemes of various banks.I personally interviewed various person and I have
collected various data related to them.

 The housing finance industry in india is estimated to be US$ 5 billion approx..

 The market at 35-40% per annum for the last 5 five years
 The main players are housing finance companies , commercial banks , co-operative
banks and NBFIs.
NEEDS OF THE STUDY
It provides for:

 Purchase of flat/ house or purchase of plot of land.

 For renovation / repairs of an existing house.
 For extending an existing house.
 Short term bridge finance while purchasing another house / flat.
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It is a way of
written game plan for conducting research. In this we describe the various steps that are by a
researcher. So it s therefore desirable to design a research methodology .for this research the
research methodology is designed as under:

Sources and nature of the study :

This is the study to judge the behavior of the customers seeking house loan in the market. To
make the feasible and concrete due consideration is given to the age , income level and
occupation and various factors affecting the house loan taking decision of the customers.

Sample size:

The respondent size is 100 which is selected on the basis of convenience sampling method. The
tools adopted to analyze the data are percentage and the research design used in descriptive
research design for the purpose research study both primary data as well as secondary data has
been collected.

 PRIMARY DATA:
A survey will be conducted to get the primary information .it is the data which is
collected directly that is for the first time in my project I will be using :
1. PERSONAL INTERVIEW
2. QUESTIONNAIRE
 SECONDARY DATA:
For the secondary data the pamphlets of various schemes from different banks have
been obtained .
LIMITATION OF THE STUDY:

1. The biggest limitation of the home loan or housing finance is that it goes on for many years
so as far as an individual is concerned he or she has to keep earning money so that he or she
can repay both the interest as well as principal component of the home loan and if due to some
unforeseen circumstances he or dhe becomes jobless then it can lead to default on the loan
and the bank or financial institution taking over the home of the borrowers .

2. Another limitation of home loan is that it is necessary that the value of the home will rise in
the same way as it has risen in the past few decades so any individual who is taking the home
loan in anticipation that capital appreciation will take care of interest rate can be a mistake. So
for example , if in the above example if the value of house remains at $100000 or falls to
$80000 then an individual who took the house in anticipation of capital appreciation can in
trouble because of the interest has to be paid no matter what the value of house is.

3. Another disadvantage of home loan is the presence of opportunity cost because many
people do not take into account the opportunity cost factor into consideration. So for example,
if instead of locking $ 100000 in purchasing a house an individual can invest that amount in
equity market or make a fixed deposit or invest in other income generating securities and as far
as home is concerned he or she can take in on rent. So if the rent of home is $500 per month
and an individual is earning $1000 from $100000 of his or her investments after paying interest
on loan then this $500 can be considerd as the opportunity cost of capital.
CHAPTER -2
INDUSTRY PROFILE
Housing is a primary human need next in importance only to food and clothing. A first
priority for a youngster who begins life is therefore to plan for a house. This takes
precedence over other household expenditure and creature needs. Housing, however,
is a major expenditure and cannot be funded out of a family's normal monthly income or
savings. The prospective homeowner must look for a loan substantial in size and so
structured that he can repay it over a longer period of time, in many cases almost one's
entire working life.

Loan is offered to a borrower to purchase or build a new house on the basis of his/her
eligibility and the bank's lending rules. One of the important basic human needs is
shelter. House is the ultimate dream of every middle class family. Government gave
encouragement for house finance subsidiaries by offering number of tax concessions to
individuals. With the overall encouragement given to this sector, a number of players
entered in housing finance.

One of the most important benefits of taking a home loan is the interest rate that is
allowed on the home loan. Fixed and variable interest rate options are also available for
home loans. Many financiers also offer home improvement loans at the same interest
rate as they offer the home loans.
Housing finance is a broad topic, the concept of which can vary across continents,
regions and countries, particularly in terms of the areas it covers. For example, what is
understood by the term“housing finance” in a developed country may be very different to what
is understood by the term in a developing country.

The International Union for Housing Finance, as a multinational networking

organisation, has no official position on what the best definition of housing finance is.

Housing is a significant engine for growth and development of the economy. Housing
and housing finance activities in India have witnessed tremendous growth over the years. Some
of the factors that have led to this growth are - tax concessions to borrowers, increase in
disposable income levels, changing age profile of the borrowers, easy availability of loans,
nuclear families and urbanization, etc. The proportion of Mortgages to the Gross Domestic
Product (GDP) ratio for India is much lower than that for developed countries. As per 11thFive
Year Plan (2007-2012) the total number of houses that would be required cumulatively in the
plan period is slated at 45 million units (7 million backlog plus 38 million additional units) which
will require an investment of around Rs.10 trillion between 2007-2012, i.e. Rs.2 trillion per year.
COMPANY PROFILE

DHFL Fulfiling Dreams

For over three decades, DHFL has been providing easy access to affordable Housing Finance to
realise home-ownership aspirations of millions of Lower and Middle income families in semi-
urban and rural India. DHFL was established in 1984 with this goal, by a visionary leader Late
Shri Rajesh Kumar Wadhawan. He observed that most Indians were unable to buy their dream
home and committed himself to transforming the lives of Indian households by enabling access
to home ownership through the inception of DHFL.

Led by Chairman & Managing Director, Mr. Kapil Wadhawan, DHFL has strengthened its
position as one of India’s leading housing finance companies and has been benchmarked as a
model and a pioneer for expanding financial inclusion across India.

Home ownership is all about ‘trust’. DHFL is your ‘trusted partner’ bringing confidence and
transparency to every relationship -- helping you make the right decisions and hand holding you
through the entire home purchase process. Our purpose-driven team is enthusiastic and
committed towards fulfilling your dream. DHFL is rated CARE AAA and achieved BWR FAAA
from Brickwork Ratings, which indicate the highest degree of safety regarding timely servicing
of financial obligations.

At DHFL, we value your dream of home ownership. The prospect of owning a Home lights up a
million emotions in you – a deep sense of fulfilment, security for the entire family and an
overwhelming feeling of relief and happiness for a place where you can spend delightful
moments with your loved ones. We understand that buying a house is one of the biggest
emotional decisions of your life. We, at DHFL, help you create wonderful memories in this
journey of building a home of your own.

Board Of Directors

DHFL is driven by qualified and motivated professionals, committed to providing efficient and
cost-effective financial services to our customers. They endeavor to make DHFL the finest
organization to work for and to do business with, every time.
Mr. Kapil Wadhawan joined DHFL in September 1996 as a Director. He became the Chairman
and Managing Director of the Company in July 2009, and has since then led DHFL into becoming
a world class financial services Company. Under his leadership, the Company commenced its
transformational journey, reaching out to customers across the length and breadth of the
country. He was instrumental behind DHFL setting up representative offices globally – at Dubai
and London. He spearheaded the acquisition of the housing finance arm of ING Vysya Bank Ltd.
in 2003 and the acquisition of First Blue Home Finance Ltd. (erstwhile Deutsche Postbank Home
Finance Ltd.) in 2011. He also established India’s low income segment specific Company,
Aadhar Housing Finance Ltd., in association with IFC, a member of the World Bank group. Mr.
KapilWadhawan also led the foray of DHFL into the education loans sector through Avanse
Financial Services Limited in 2013 and in life insurance through DHFL Pramerica Life Insurance
Company Ltd. in 2014. With his focus on business excellence and industry development, Mr.
Kapil Wadhawan has played a significant role in shaping policy guidelines on matters relating to
themortgage finance industry. His dynamic initiatives at DHFL have been pioneering for the
industry. Mr. Kapil Wadhawan is an MBA in Finance from Edith Cowan University, Australia.

 Mr. Dheeraj Wadhawan is also the Promoter and Shareholder of the Company. He is the
son of Late Shri Rajesh Kumar Wadhawan and brother of Mr. Kapil Wadhawan,
Chairman & Managing Director. He has graduated in construction management from
the University of London. He has over 13 years of experience in the real estate and
construction industry. He joined on the Board as a Non-Executive Director on May 12,
2008.
 Mr. G. P. Kohli is the former Managing Director of Life Insurance Corporation of India
(LIC) and has vast experience in insurance, housing, human resource development,
information technology and marketing, having worked in different positions in LIC. He
holds a Masters Degree in English Literature MA. (Hons) and has acquired a diploma in
Labour Laws, Labour Welfare and Personnel Management – LLD. Mr. G. P. Kohli is on the
Board of the Company as an Independent Director since May 23, 2001.
 Mr. V. K. Chopra is a Fellow Member of the Institute of Chartered Accountants of India
(FCA) by profession. Mr. V. K. Chopra had a long and illustrious career in banking, having
served in the sector for over 37 years in different capacities. He was the Chairman and
Managing Director of Corporation Bank and SIDBI and an Executive Director of Oriental
Bank of Commerce for a long tenure. His last assignment was with Securities Exchange
Board of India (SEBI) as a whole-time member for two years until March, 2008. He is a
Non-Executive and Independent Director of several listed companies. He joined the
Board of the Company as an Independent Director on May 12, 2008.
 Mr. Mannil Venugopalan holds a Bachelor of Commerce degree from Kerala University
and has worked as a commercial banker for nearly four and a half decades. He started
 his career as a probationary officer with Bank of India in 1966. In 2000, he joined Union
Bank as an Executive Director. In 2003, he returned to Bank of India as the Chairman
and Managing Director. In May 2005, he joined Federal Bank as the Managing Director
and Chief Executive Officer. Mr. Mannil Venugopalan has also been runner-up for the E
& Y Entrepreneur of the Year 2009 award. He joined the Board of the Company as an
Independent Director on February 25, 2013.

Committees Of The Board

The Board of Directors of the Company have constituted six committees namely – Audit
Committee, Stakeholders’ Relationship Committee, Nomination and Remuneration
Committee, Corporate Social Responsibility Committee, Risk Management Committee and
Finance Committee which enables the Board to deal with specific areas / activities that
need a closer review and to have an appropriate structure to assist in the discharge of their
responsibilities. The Board Committees meet at regular intervals and perform the duties
and functions as entrusted upon them by the Board.

 Audit Committee

Mr. Mannil Venugopalan – Chairman

Mr. G. P. Kohli – Member

Mr. V. K. Chopra – Member

 Stakeholder's Relationship Committee

Mr. G. P. Kohli – Chairman

Mr. Kapil Wadhawan – Member

Mr. Harshil Mehta – Member

 Nomination And Remuneration Committee

Ms. V. K. Chopra – Chairman

Mr. G. P. Kohli – Member

Ms. Vijaya Sampath – Member

DHFL Project Finance

The DHFL Project Finance vertical offers a comprehensive financial solution to developers
for construction and development of residential projects.

At DHFL, our vision over the last 33 years has been to fulfill the aspirations of owning a
home. Our experience and understanding of the LMI segment has shaped our emergence as
a comprehensive financial services provider. DHFL's project finance business is a backward
integration of creation of retail pool by offering loans to developers for construction and
development of housing projects, thereby addressing the huge demand and supply gap in
the affordable housing category particularly in emerging towns and cities.

The Project Loan vertical acts as precursor in creating a retail pool under the approved
project route wherein DHFL provides affordable housing finance to customers for projects
financed by the company. Consequently, DHFL has made extensive inroads into Tier 2 and
Tier 3 cities and towns leading to a unique product-process innovation. Through its Project
Finance vertical, DHFL provides a comprehensive solution to the developer by leveraging
business synergies and plays a transformational role in driving financial inclusion across the
Nation.
CHAPTER -3
 THEORETICAL FRAMEWORK
SWOT ANALYSIS
STRENGTHS

• Brand name of DEWAN HOUSING FINANCE LIMITED (DHFL) is established over the years.

• Single window clearance - a single employee provides wide variety of facilities to the
borrower, minimizing the hassle of wastage of time.

• Appraisal techniques are used.

• Specialized software's are big assets.

• There is no penalty for prepayment from borrowers own service.

WEAKNESSES

• High interest rates as compared to other housing finance institutions.

• Top management takes large amount of time to approve high value seeking loan borrowers.
No publicity.

• No marketing managers work, only through dsa's (direct sales agent).

• People are not aware of wide variety of schemes offered by the company; tend to think the
company as only providing home loans.

• There is the shortage of staff at almost all branches which does not ensure easy addressable
of the customers problems. Delegation of authority and responsibility is not proper.

OPPORTUNITIES

• Special rates of interest are offered during exhibitions.

• Special rates of interest can be introduced for employees of PSU'S & reputed national or
multinational companies'

• Product life cycle is to be reviewed.

• The growing category of the builders ensure that good, high value & qualitative projects,
providing them home loans with the new and innovative schemes can lead to over all
development of the company.

THREATS

• The competition in market is very high due to the private players.

• The rates of interest of other players are quite low.

• Innovative schemes with home loan from other players.

• The processing process is quite slow which leads to low housing finance.
CHAPTER-4
DATA INTERPRETATION AND ANALYSIS
ANALYSIS AND INTERPRETATION OF DATA AND RECOMMENDATIONS

The data collected in the aforesaid manner have been tabulated in condensed form to draw the
meaningful result. The different techniques are adopted to analyze a data. All the data and the
material is arranged through internal resources and the last part of the project consist of the
conclusions drawn from the report, a brief summary and recommendations and giving the final
touch to the reports by stating a conclusion.

COMPARATIVE CUSTOMER PREFERENCE ANALYSIS IN HOME LOAN SECTOR

The title of this report is "COMPARATIVE CUSTOMER PREFERENCE

ANALYSIS IN HOME LOAN SECTOR". The subject was chosen to gather information about the
perception of people towards home loan / sector. Marketing is essential for each and every
organization for its successful operation. It forms the basis of all other functions. Marketing is
human activity directed at satisfying needs and wants through exchange processes. Therefore
marketing is a social and managerial process by which individuals and groups obtain what they
need and want through creating, offering and exchanging products of value with others is an
act or operation or service by which original project and the final consumers are linked together
in between these two points i.e. producer and consumer. Hence every activity facilitating the
movement of goods and services, including market and marketing research are covered under
the term marketing.
Marketing of a product involves a variety of activities of which selling is merely one of them.
This project provided the important data regarding the demand and awareness of DHFL home
loan sector.

AWARENESS ABOUT HOME LOANS

YES
NO

Awareness about home loans Percentage

Yes 92
No 8

INTERPRETATION
The above Pie chart depicts that 92% of total sample size is aware about the home loans and only
8% are unaware.

EASE OF GETTING HOME LOAN

EASE OF GETTING HOME LOAN

YES
NO

Ease Of Getting Home Loan Percentage

Yes 51
No 49
 INTERPRETATION

51% of the sample size finds easy to get the home loan while 49% finds it difficult The ratio is
more or less same.

PREFERENCE OF TAKING HOME LOAN

PREFERENCE OF TAKING HOME LOAN

YES
NO

Preference of taking Home Loan Percentage

Yes 76
No 24
 INTERPRETATION

The above graph depicts that maximum percentage of the sample size prefers to go for home
loan.

LOAN RECEIVED

LOAN RECEIVED

YES
NO
 Loan Recieved Percentage
Yes 67
No 33

INTERPRETATION

It has been found from the graph that 67% of the sample size has gone for the home loan.

LAGGING AREA

LAGGING AREA

CONFINED ONLY IN URBAN AREAS

NON EFFECTIVE ADVERTISEMENTS
DELAY IN PROCESSING
 Lagging Area Percentage

Confined Only In Urban Areas 12

Non Effective Advertisements 78

Delay In Processing 10

INTERPRETATION

The above Pie chart shows that Non effective Advertisement is the lagging area of DHFL in
comparison to other home loan banks.

CHAPTER - 5
FINDINGS AND SUGGESTIONS
Following are few suggestions in the light of the research study-
 Housing finance is a market with infinite growth potential. The Government as well as
the housing financing agencies should effort more to improve the creditability and
functioning of housing finance system in India.
 The major problems of housing finance sector of India are shortage of funds, inadequate
mortgage and securitisation laws, unhealthy competition among housing finance agencies
and traditional thinking of Indians etc. Most of these problems of shortage of funds can
be minimised by giving an industry status to housing finance sector by the Government
of India.
 To achieve the industry status for housing sector only government positive attitude is not
sufficient but also the functioning of developers and promoters should be in an
organisation systematic.
 It may be a sound decision for a safety conscious customer to go for fixed rate of
interest that accords certain stability to his quantum of loan repayment. He can also sure
that any increase in interest rates will not lead to an increase of his loan liability.
 It feels cumbersome for a general housing loan seeker to go through all details and
technicalities of housing loan offers of different agencies. But a friendly marketing
atmosphere can help him to arrive at the right decision.
 The steps of Government of India such as to cut down the interest rates on housing
finance and to provide tax rebate on housing loans interest can be appreciated for
boosting up the housing finance market in India.
CONCLUSION
Following are the main findings of the present study-
 Housing finance is comparatively a new concept in the finance sector of India. It is
developed rapidly during the last two decades due to the enthusiastic interest of
Government of India to cut-short the housing problem of the country.
 The role of Central Government in social housing scheme is confined to the laying of
broad based guidelines, providing necessary advice and rendering financial assistance in
the form of loans and subsidies to the State Governments. State Government looks after
the housing schemes launched by the Central Government and also launches additional
housing scheme as per its regional requirements.
 The share of housing mortgage in Gross Domestic Product GDP is increasing year in the
country by year and is expected to go up substantially in the next coming years, but it is
quite lower to other Asian countries.
 Residential property markets constitute almost 80% of the real estate market in terms of
volume and growing every year.
 The property markets are moving from fragmented to organized and the sector is likely
to institutionalize with the relaxation in foreign direct investments.
BIBLOGRAPHY

A. BOOKS
 Buckley, R.M. (1996) – HOUSING FINANCE in developing countries
 Griappa , S. (1998) – housing finance and developing in india

B. WEBSITES
 WWW.Housing.org
 www.iuhf.org
 www.guide2homeloan.com
 www.housingfinanceinternational.org