Presentation On Consumer Finance

Presentation on
Consumer Finance in India

Presented by
Javed Hussain
Kirti Jindal
Karishma Bhandari
Garima Dubey
Garima Swami
Hitesh Rajpurohit
Gaurav yadav
Hitesh Jeengar
Contents
• Defination
• Durables which are financed
• Growth of consumer durables
• Future prospects of consumer finance
• Consumer finance growth drivers
• Consumer finance in Rural market
• About Bajaj Finance
• Organizational Hierarchy of Bajaj Finance
(Contd..)
• Document required for financing
• Interest rates of finance
• Basis of Segmenting market
• Legal Procedure
• Situation of cases
• Limit of Finance
• Process of financing in Bajaj Finance
• Conclusion
Defination
Consumer finance in the most basic
sense of the word refers to any kind of
lending to consumers.
One of the best ways to
get the unsecured loans is through
the consumer finance.
Durables which are financed
• Television
• Washing Machine
• Air Conditioner
• DVD/VCD players
• Refrigerator
• Computers/laptops
• And other consumer durables
Growth of Consumer
Durables
• Cyclical & Seasonal Demand
• Demand in Rural India
• Consumer Awareness & Preference
for new models
• Attractive consumers loan schemes
• Growth of Media
• Use of Internet by Market
Functionaries
Future prospects of Consumer
Finance
• Growth of GDP
• Opportunities in Rural Market
• Schemes of Banks & Financial
Institutions
• Increasing Consumer Awareness
FICCI Research
• Report-
1. Attractive Schemes
2. Phenomenal growth of Media
3. Use of Internet
4. The ability of Imports
5. Reduction in Import duties and Input costs
• Table of Projected growth in Prodction

Projected growth in production of
Consumer Durables(Table)
• Refrigerator - 5-10%
• Air conditioner - 20-25%
• Washing Machines - 5-10%
• Microwave Ovens - 25%
• Consumer Electronics(overall) - 9%
• Colour televisions - 15-20%
• Black & White televisions - 20%
• VCDs/MP3 - 30%
• DVD - 25%
• Clock - 10%
• Watch - 10%
(Source-FICCI report 05-06)

RURAL MARKET AND
CONSUMER FINANCE
• Sales were high during festive season.
• Rural people feel ease in giving installments instead of
single down payment.
• Rural persons found consumer loans useful because
consumer durables are used for productive purposes.
PROBLEMS FACED IN RURAL
SECTORS
• Process of sanctioning
loans,documentation and formalities
takes too much time.
• Higher interest rates for quicker
sanctioning of loans.
• People want advance information
about the documents needed for
taking loan.
RECOVERY OF LOANS
• Recovery of loans is the toughest job
in rural area.
• Recovery rates are higher in co-
operative banks.
• Schemes for hardcore defaulters
discourages the consumers who pay
on time.
About Bajaj Capital
BFL was created by the three-way demerger of
Bajaj Auto, inheriting the insurance and finance
businesses. Now, it is into consumer finance
through listed firm Bajaj Auto Finance. It is also
into general and life insurance businesses in
JVs with Allianz.
Bajaj Auto Finance, which initially financed
purchases from Bajaj Auto, is now changing
into a consumer finance firm. Last year, auto
finance brought 55% business while 45% came
from personal loans and financing consumer
durables and PCs.
Organization Hierarchy
• There are four Departments:
• Sales
• Operational
• Credit
• Collection
Hierarchy of Sales
Department
Sales Dep
HOD
2-3 Member
3-5 TL
6-8 Exec.
Documents Required
• ID
• Income Proof
• Address Proof
Interest Rate
For Dealer 0% rate
For consumers on Durables 5%-8% rate
Maximum 11%
Segmentation of Market
Step 1 –
Segmenting Market on Basis of Cities
Step 2 –
Grading Cities
- A Grade
- B Grade
- C Grade
- D Grade
Step 3 –
Designing Schemes Acc. to to Grades
given
Legal Procedure
Reserve Bank of India has told banks

that the recovery agents appointed
by them cannot re-possess by
resorting to illegal means, vehicles or
property or any other goods, in case
of defaults by borrowers.
Situation of Cases
Previously -
Till Oct 07 – 700 to 800 cases per Month
Action Taken -
Income proof made Essential
Now -
152 Cases Per month
Limit of Finance
• Minimum Limit is of Rs.7000

• Maximum Limit is of Rs.500000
Base for deciding limit

- Self Employed - 60000 in ITR
- Salaried person – 5000 per mth
Process of consumer
Finance
• Consumer meet with dealer
- Purchase decision
- Filling of form
- Submitting documents
• Transfer of document from dealer to finance company
• Checking of details by Operation Department
• Transfer from Operation to Finance Department
• Finance given to customer
• Finally Collection Department collects the installments
paid by customer
(In case of default on finance collection department
take legal action against customer)
Conclusion
There are many organizations in the world
which are providing consumer credit services
which are helpful for the financial stability.
Financial stability is very important not only for
the businesses but also for the consumers. The
businesses and as well as the consumers need
the stability regarding the financial matters
because without the stability no one could be
very innovative in the longer run.
Special thanks to
• Bajaj Finance – Manish Parekh
Sources of Information
- Bajaj Finance
- FICCI Report
- Internet

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Presentation On Consumer Finance

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Presentation on

Consumer Finance in India

• Table of Projected growth in Prodction

(Source-FICCI report 05-06)

Reserve Bank of India has told banks

• Minimum Limit is of Rs.7000

Base for deciding limit

• Bajaj Finance – Manish Parekh

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