Summer Internship Project Report

ON

“Analysis of Consumer Behaviour Towards Microfinance”

Submitted in partial fulfilment of the requirements for the Two-Year Full-Time

Post Graduate Diploma in Management

By: Under the Guidance of

Student Name – Ankit Kumar 1. Faculty Mentor’s Name- Mr. Animesh
P.I.B.M, PUNE 2. Industry Mentor’s Name- Dibyendu Deb
Enrolment No: DM18D06 3. Designation – Regional Head
BATCH: 2018-2020

PUNE INSTITUTE OF BUSINESS MANAGEMENT

APPROVED BY AICTE, AFFILIATED TO PUNE UNIVERSITY
ACCREDIATED BY NAAC.
 CERTIFICATE OF ORIGINALITY

I hereby declare that this Summer Internship Project is my own work

and that, to the best of my knowledge and belief, it reproduces no
material previously published or written that has been accepted for the
award of any other degree of diploma, except where due
acknowledgement has been made in the text.

ANKIT KUMAR
Enrolment No. DM18D06

Date: -
 CERTIFICATE

This is to certify that Mr. Ankit Kumar PGDM (2018-20 Batch) a

student of P.I.B.M- Pune Institute of Business Management, Pune has
undertaken the project on “Analysis of Consumer behaviour of
Microfinance”. The survey, data collection, & analysis work for
preparing the project has been carried out by the student in partial
fulfilment of the requirements for the award of PGDM, under my
guidance and supervision.

I am satisfied with the work of Mr. Ankit Kumar

Date: - Animesh Kumar

(Faculty Mentor’s Name)

Signature
 ACKNOWLEDGEMENT

I take the opportunity to express my gratitude to all of them who in some or

other way helped me to accomplish this challenging project in Selfin India
financial Services Pvt. Ltd., New Delhi. No amount of written expression is
sufficient to show my deepest sense of gratitude to them.

I am extremely thankful and pay my gratitude to our Batch-in-charge, and my

mentor Mr. Animesh Kumar, Pune Institute of Business Management for their
valuable guidance and support on completion of this project in its presently.

I am very thankful to my external mentor Mr. Dibyendu Deb for their

everlasting support and guidance on the ground of which I have acquired a new
field of knowledge.

A special appreciative “Thank you” in accorded to all staff of Selfin India

financial Services Pvt. Ltd. for their positive support.

I also acknowledge with a deep sense of reverence, my gratitude towards my

parents and member of my family, who has always supported me morally as
well as economically.

At last but not least gratitude goes to all of my friends who directly or indirectly
helped me to complete this project report
1. PROJECT SYNOPSIS

Analysis of Consumer Behaviour towards

Project Title
Microfinance
Company Name Selfin India Financial Company Pvt. Ltd.

Student Name Ankit Kumar

Student Roll No DM18D06

Project Guide Name Mr. Animesh Kumar

Project Guide Designation

Confidential Report (Yes/No) No

Duration of project
20 May 2019– 20 August 2019

Location New Delhi

 SECTOR INFORMATION

Microfinance sector is one of the growing sectors in the economy. there are many
NBFCs who are dealing in microfinance. microfinance gives an opportunity to
various individual who wants to start their business but due to their financial
condition they are not able to start their business then in this case various NBFCs
help this kind of people to grow.
Microfinance help poor people who are economically backward peoples.
Combined microcredit portfolio of all lenders as on December 31, 2018, was Rs
1,57,497 crore of which NBFC-MFIs are leading with Rs 60,117 crore and 38.17
per cent market share, followed by banks with Rs 52,556 crore and 33.37 per cent
market share. The Micro and Small Enterprise (MSEs) in India is one of the most
promising sectors of the employment and economic development. Smaller firms
are inherently entrepreneurial ventures and their innovative skills, ability to take
risk and thrust to pursue remains unmatched with any other business sources. The
sector plays crucial role in providing large employment opportunities at
comparatively lower capital cost than large industries and helps in
industrialization of rural and backward areas. This sector contributes enormously
to the socioeconomic development of the country. However according to the
previous research, it has been proved that the credit availability is one of the major
bottlenecks for MSEs development in India. This paper focuses on credit
available to micro and small enterprises for the support and encouragement of the
MSE’s sector growth and performance. Focus on the impact of loans and
advances under various credit programs taken by MSEs for its performance and
growth. The study revealed that the credit has an impact on MSE’s performance.
The study concludes that the credit programs formulated by state and central
governments has to consider filed level reality and financial institutions which
are serving these credit programs have to treat MSEs as medium and large
enterprises. Then only the introduced credit programs can get success as well as
influence more on performance-oriented development of the MSES.
 Introduction
About Microfinance: Microfinance is a general term to describe financial services
to low-income individuals or to those who do not have access to typical banking
services.
Microfinance is also the idea that low-income individuals are capable of lifting
themselves out of poverty if given access to financial services. While some
studies indicate that microfinance can play a role in the battle against poverty, it
is also recognized that is not always the appropriate method, and that it should
never be seen as the only tool for ending poverty.
Microfinance is defined as any activity that includes the provision of financial
services such as credit, savings, and insurance to low income individuals which
fall just above the nationally defined poverty line, and poor individuals which fall
below that poverty line, with the goal of creating social value. The creation of
social value includes poverty alleviation and the broader impact of improving
livelihood opportunities through the provision of capital for micro enterprise, and
insurance and savings for risk mitigation and consumption smoothing. A large
variety of actors provide microfinance in India, using a range of microfinance
delivery methods. Since the ICICI Bank in India, various actors have
endeavoured to provide access to financial services to the poor in creative ways.
Governments also have piloted national programs, NGOs have undertaken the
activity of raising donor funds for on-lending, and some banks have partnered
with public organizations or made small inroads themselves in providing such
services. This has resulted in a rather broad definition of microfinance as any
activity that targets poor and low-income individuals for the provision of financial
services. The range of activities undertaken in microfinance include group
lending, individual lending, the provision of savings and insurance, capacity
building, and agricultural business development services. Whatever the form of
activity however, the overarching goal that unifies all actors in the provision of
microfinance is the creation of social value.
‘Microfinance refers to small scale financial services for both credits and
deposits- that are provided to people who farm or fish or herd; operate small or
micro enterprise where goods are produced, recycled, repaired, or traded; provide
services; work for wages or commissions; gain income from renting out small
amounts of land, vehicles, draft animals, or machinery and tools; and to other
individuals and local groups in developing countries in both rural and urban
areas’.
 Financial Services

Capital
Insurance NBFCs
Markets
Asset Asset Finance
Life
Management Company

Investment
Broking Non – Life
Company

Wealth Loan
Management Company

Investment
Banking

Market Size
The Mutual Fund (MF) industry in India has seen rapid growth in Assets Under
Management (AUM). Total AUM of the industry stood at Rs 23.80 trillion (US$
340.48 billion) between April 2018-February 2019. At the same time the number
of Mutual fund (MF) equity portfolios reached a high of 74.6 million as of June
2018.
Another crucial component of India’s financial industry is the insurance industry.
The insurance industry has been expanding at a fast pace. The total first year
premium of life insurance companies reached Rs 214,673 crores (US$ 30.72
billion) during FY19.
 Credit Growth at NBFC as a % of Total Credit
25

20

15

10

0
2015 2016 2017 2018 2019 2020

7% CAGR 10% CAGR

Along with the secondary market, the market for Initial Public Offers (IPOs) has
also witnessed rapid expansion. The total amount of Initial Public Offerings (IPO)
increased to US$ 1.2 billion raised from 37 between April – June 2018.
Over the past few years India has witnessed a huge increase in Mergers and
Acquisition (M&A) activity. In H12018, 74 deals of acquisition took place in
financial sector. The total value of such transactions was US$ 4.166 billion.

Furthermore, India’s leading bourse Bombay Stock Exchange (BSE) will set up
a joint venture with Ebix Inc to build a robust insurance distribution network in
the country through a new distribution exchange platform
Source: - www.ibef.org
 The History of Modern Microfinance
ABSTRACT:
In the late 1970s the concept of microfinance had evolved. Although,
microfinance have a long history from the beginning of the 20th century we will
concentrate mainly on the period after 1960.
Many credit groups have been operating in many countries for several years, for
example, the "chit funds" (India), tontines" (West Africa), "susus" (Ghana),
"pasanaku" (Bolivia) etc. Besides, many formal saving and credit institutions
have been working for a long time throughout the world.
During the early and mid-1990s various credit institutions had been formed in
Europe by some organized poor people from both the rural and urban areas.
These institutions were named Credit Unions, People's Bank etc. The main aim
of these institutions was to provide easy access to credit to the poor people who
were neglected by the big financial institutions and banks.

In the early 1970s, few experimental programs had started in Bangladesh, Brazil
and some other countries. The poor people had been given some small loans to
invest in micro-business. This kind of micro credit was given on the basis of
solidarity group lending, that is, each and every member of that group
guaranteed the repayment of the loan of all the members.
Many banks and financial institutions have been pioneering the microfinance
program after 1970. These are listed below.
ACCION International:
This institution had been established by a law student of Latin America to help
the poor people residing in the rural and urban areas of the Latin American
countries. Today, in 2008, it is one of the most important microfinance
institutions of the world. Its network of lending partner comprises not only Latin
America but also US and Africa.
SEWA Bank:
In 1973, the Self-Employed Women's Association (SEWA) of Gujarat (in India)
formed a bank, named as Mahila SEWA Cooperative Bank, to access certain
financial services easily. Almost 4 thousand women contributed their share
capital to form the bank. Today the number of the SEWA Bank's active client is
more than 30,000.
GRAMEEN Bank:
Credit unions and lending cooperatives have been around hundreds of years.
However, the pioneering of modern microfinance is often credited to Dr.
Mohammad Yunus, who began experimenting with lending to poor women in the
village of Jobra, Bangladesh during his tenure as a professor of economics at
Chittagong University in the 1970s. He would go on to found Grameen Bank in
1983 and win the Nobel Peace Prize in 2006.
Since then, innovation in microfinance has continued and providers of financial
services to the poor continue to evolve. Today, the World Bank estimates that
about 160 million people in developing countries are served by microfinance.
Grameen Bank (Bangladesh) was formed by the Nobel Peace Prize (2006) winner
Dr Muhammad Younus in 1983. This bank is now serving almost 400, 0000 poor
people of Bangladesh. Not only that, but also the success of Grameen Bank has
stimulated the formation of other several microfinance institutions like, ASA,
BRAC and PROSHIKA.

Overview
Microfinance Definition:
According to International Labor Organization (ILO), “Microfinance is an
economic development approach that involves providing financial services
through institutions to low income clients”.
In India, Microfinance has been defined by “The National Microfinance
Taskforce, 1999” as “provision of thrift, credit and other financial services and
products of very small amounts to the poor in rural, semi-urban or urban areas for
enabling them to raise their income levels and improve living standards”.
"The poor stay poor, not because they are lazy but because they have no access
to capital.
"Microfinance is the supply of loans, savings, and other basic financial services
to the poor."
As these financial services usually involve small amounts of money - small loans,
small savings, etc. - the term "microfinance" helps to differentiate these services
from those which formal banks provide
It's easy to imagine poor people don't need financial services, but when you think
about it they are using these services already, although they might look a little
different.
 NBFCs have served the unbanked customers by pioneering into retail asset-
backed lending, lending against securities and microfinance. NBFCs aspire to
emerge as a one-stop shop for all financial services
Non-Banking Financial Companies are expected to raise their share to 19-20 per
cent by 2020 through recapitalisation program for public sector
New RBI guidelines on NBFCs with regard to capital requirements, provisioning
norms and enhanced disclosure requirements are expected to benefit the sector in
the long run

Factors affecting to the Growth of NBFC

 Stress on Public Sector Units
 Latent Credit Demand
 Digital Disruptions, especially for micro, small and medium enterprises
(MSMEs) and small and medium enterprises (SMEs)
 Increased Consumption
 Distribution reach and sectors where traditional banks donate lend

Government Initiatives
Govt to provide credit guarantee to PSBs to buy NBFC assets
Government and RBI in huddle over NBFC liquidity squeeze
 About the Company

Selfin India Financial Services Private Limited is a Private incorporated on 10

October 2014. It is classified as Non-govt company and is registered at Registrar
of Companies, Delhi. Its authorized share capital is Rs. 80,000,000 and its paid-
up capital is Rs. 50,000,000. It is involved in Monetary Intermediation [This
group includes the obtaining of funds in the form of deposits]

Selfin India Financial Services Private Limited's Annual General Meeting

(AGM) was last held on 29 September 2018 and as per records from Ministry of
Corporate Affairs (MCA), its balance sheet was last filed on 31 March 2018.
It has six branches in India that is New Delhi, Mumbai, Bangalore, Jaipur, Panipat
and Ahmedabad. New Delhi is the main branch of the company where all the
policy making are maintained.

Book Size 2.3 Cr

Number of Employees 52
Growth Rate N/A
History of the Company Since April 2019
Number of Customers 564
 Organization Hierarchy:

CEO/Founder

CCO/ Co- CFO/ Co-

founder founder

Vertical Vertical
Heads Heads

Regional Regional
Team Team
 INTERNSHIP SUMMARY
Internship Work Summary

The task given us as an intern in Selfin India Financial Services Pvt. Ltd. as a
Financial Adviser. For the first month we are trained.
They provide us all the information regarding their products:
 How to sanction loans
 How to pitch customers
 How to find a loyal customer
 Find out the customer is loyal or not
 How to pitch a customer who is not interested in taking loans
They also trained us for Credit Bureaus
DOCUMENTS REQUIRED FOR SANCTIONING OF LOANS
 Gumasta license / Udyog Aadhar / FSSAI / GST
 Aadhar Card
 PAN Card
 Shops Rent Agreement or Utility Bill
 Home Rent Agreement or Utility bill
 9 PDC
 One passport Size photo

HOW TO APPLY INTEREST ON LOAN

LOAN AMOUNT 50000

INTEREST 2% ON LOAN AMOUNT 1000
PROCESSING FEES 3% ON LOAN AMOUNT 1500
GST 18% ON PROCESSING FEES 270
LIFE PROTECTION ONE TIME 1000
DISBURSAL AMOUNT DEDUCTION OF ALL ITEMS FROM 47230
LOAN AMOUNT
EMI 18% OF 9 MONTHS ON LOAN 6556
AMOUNT (2% PER MONTH)
TOTAL ADD EMI IN DISBURSAL AMOUNT 56750
 ON BOOK
TYPES OF LENDING
LENDING OFF BOOK
LENDING

DATA
ANALYTICS

Structured Unstructured

WAYS OF
BORROWING

CASA (Current
Account Saving Fixed Deposit RBI Borrowing
Account)
PROCESS OF SANCTIONING LOAN

Sourcing

Underwriting

Disbersal

CREDIT BUREAUS

BUREAU ESTABLISHMENT SCORE ADVANTAGES

CIBIL 2000 300 TO 900 Oldest and widely used
from all other credit
bureau
Experian 2006 300 – 900 Cost Effective
CRIF Highmark 2007 300 – 850 New entrant offers
greater variety in
products and service
Equifax 2010 1 – 999 New technology

Documents Required for Checking All Credit Bureau

1. Name
2. Date of Birth
3. PAN
4. Phone
5. Address
The selling process is carried out in the following steps:

1. Visit to Field for Cold calling: We visited to small shops asked to

customers for requirement of business loan. If they are not interested then
we convince then by saying that if you take loan then your credit score will
be improved.

2. Check Credit Score: When the customer is interested in taking loans then
I take their PAN Card and Aadhar Card to check their Credit score with the
help of Bureau called CIBIL. If their credit score is above 700 it means that
he had taken loan previously and paying loan timely and hence he is
eligible to take loan, If their credit score is below 700 then he is defaulter
in paying his EMI hence he is not eligible to take loan and if their score is
-1 it means that he is NTC and he is eligible to take loan.

3. Explanation of loan and EMI payments: We explain whole procedure of

loan that how much EMI he has to pay, interest rate and if he timely not
pay the EMI then how much bounce charges will be taken.

4. Verification of his Business: We verify his business by asking to his

nearby shops about his business and customer.

5. Proper Documentation: We take documents such as Business license,

rent agreement of shop and house also and verify that the customer name
is there or not and check the duration of the agreement.

6. Filling of Loan Application Form: We asked all the questions that are to
be filled in the application form.

7. Collection of Documents; We collect all the documents xerox such as

business license, rent agreement of shop and house, Aadhar card, PAN card
and 1 passport size photo and 9 PDC.

8. Submission of Documents to Credit team: We submit all the documents

to credit team for taking approval of loan from the higher authority. Once
the loan is approved then the file is submitted to operations department for
disbursement of loans
 RESEARCH METHODOLOGY

Project Title: - Analysis of Consumer Behaviour Towards

Microfinance

Research objective
The objective of the study was to identify the need and requirement of loans to
customer
Research Design
This research is a study that is mainly aimed at examining the behavior of SMEs
Business person (Customers) for loans. The descriptive research design is used
to identify the factors that are influencing the customers for taking loans. How
the customers are differentiating that from where they have to take loan.
Target Population
The target population was SMEs Business person of New Delhi area
Sample Frame
The sampling frame of the target population are Loan holder Businessman only.
Sample Size
Owing to the fact that the population of all businessman is too large in New Delhi
region and was unknown at the time of study, So I collected 50 data for the
process of analysis.
Sampling Techniques
Sampling is done on probability basis. The theory behind the research is idealist,
as quantitative methods are used. This method was selected to enable to target
specific businessman who were in position to provide the information needed for
the study.
Data Collection
For the purpose of collecting data, a well-designed questionnaire was used which
is or sometime according to the research requirement questionnaire has been
designed for industry specific research. This questionnaire consists of variables
in both independent and dependent variables namely, attitude, perceived ease of
use, Perceived usefulness, decision-making.
Data Analysis Tools

Microsoft Excel is used to analyse the primary data collected from the
questionnaire and Google form is used to identify and analyse the factors
corporate decision-making process was identified.
Action Plan
1. Visit to small shops
2. Interacting the businessman and talking about loans
3. Filling the research questionnaire by asking questions to them
4. Analysis and Evaluation

Data interpretation and analysis:

Location: New Delhi
 Perceived Satisfaction Level From Different Sources Of
Finance
60
50
40 50 48 47 49
46 43 43
40 38 38 41
30 35 36
33 34 34 34
20 26 29
10 16 17 4 9 2 9 5 5 3 7 7
0

Disagree Neutral Agree

LEARNING/ FINDING

 Market Mapping through field visits

 Visited retailers (40retailers/day)
 Operations work
 Team Management and working as a team member
 Patience
 Gained knowledge as a Financial Advisor as well as credit
 Client handling
 Achieving targets consistently
 Target Potential Market & Customer
 Pitching the product for sales
 Credit Appraisal and Analysis of CIBIL, CRIF report and Documents
SUGGESTION
 Improve the popularity of the company through advertisements
 Cases allocation management
 Company should launch online application so that it will help to generate
lead and customer can easily apply for loan
 Company should increase disbursal amount at least maximum 1 lakh

CONCLUSION
Reference
 CONSUMER BEHAVIOUR OF MICRO FINANCE

DEMOGRAPHIC PROFILE OF THE RESPONDENTS

1. Gender: (i) Male (ii) Female
2. Age: (I) <20 (ii) 20-30 (iii) 30-40 (iv) 40<
3. Marital status: (i)Single (ii) Married (iii) Widow (iv) Divorce
4. Type of family: (i)Joint (ii) Nuclear (iii) Extended
5. Education: (i) Illiterate (ii) Matric (iii) Higher education (iv)
Graduation (v) Post-graduation (vi) Vocational (vii) Other
6. Occupation: (i) Employed (ii) Self-employed (iii) Labor
(iv) Housewife (v) Unemployed (vi) Professional (vii) Family owned
business (viii) Retired

SURVEY QUESTIONS
1. Did you take credit? (i) Yes (ii) No
2. Which type of credit source you use? (i)Formal (ii) Informal
3. Up to what limit you take credit? (i) < 10000 (ii) 10000-20000 (iii)
20000-40000 (iv) 40000-100000 (v) 100000-250000 (vi) 250000<
4. For how long time period did you take credit? (i) < month (ii) 1 month-6
months (iii) 6 months- 1year (iv) 1year - 2 years (v) 2 years – 5
years (vi) 5 years <
5. What is the purpose of taking credit? (i) Emergencies (ii) Housing/housing
repairs (iii) Education (iv) Consumption (v) For Business
6. Up to what extent you repaid your credit?
(i) Fully paid (ii) Half paid (iii) More than half (iv) Not paid

7. Do you think you fully utilised credit taken by you? (i) Yes (ii) No
8. Are you aware of the duration and amount of loan you have taken?
(i) Yes (ii) No
9. Are you aware of the interest rate charged on your loan? (i) Yes (ii) No
10. Are you aware of the consequences of non-repayment of loan? (i) Yes (ii) No