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2013 INTERNATIONAL SCHOOL OF BUSSINESS & MEDIA
POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) SUMMER INTERNSHIP REPORT SAURABH KUMAR 13148 1|Bajaj Finserv Lending
INTERNATIONAL SCHOOL OF BUSINESS & MEDIA, PUNE POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)
SUMMER INTERNSHIP REPORT ON A STUDY ON CONSUMER DURABLE’S FINANCE PROCESS OF
Submitted by: Saurabh Kumar 13148
2|Bajaj Finserv Lending
DECLARATION
I hereby declare that the Project Report “FINANCE PENETRATION AT R DISTRIBUTORS” for BAJAJ FINSERV LENDING Submitted for the PGDM at International School of Business and Media, Pune - Nande is my original work and the dissertation has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.
Place: Pune Date:
(Saurabh Kumar)
3|Bajaj Finserv Lending
ACKNOWLEDGEMENT
“Acknowledgement is an art, one can write glib stanzas without meaning a word and on the other hand one can make a simple expression of gratitude.” Summer Internship is an integral part of any Business istration program and for that purposes I had ed a company what else can be as good as Bajaj Finserv Lending, India's premier finance company. 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 Bajaj Finserv Lending, No amount of written expression is sufficient to show my deepest sense of gratitude to them. I am very thankful to Mr. Devendra (Regional Sales Manager), Mr. Priya Swarup Tripathy (Area Sales Manager), Mr. Vinay Pandey (Manager) Nagpur and very grateful to all my faculties at ISB&M, Nande Pune for their everlasting and guidance on the ground of which I have acquired a new field of knowledge. The course structure created for this curriculum has benefited with the inclusion of recent development in the organizational and managerial aspects. Lastly, I am thankful to all the member of Bajaj Finserv Lending, Nagpur, which has given me valuable information in the part of my project.
SAURABH KUMAR 13148
4|Bajaj Finserv Lending
TABLE OF CONTENT Sr. No
Particular
1.
Introduction
6
2.
Information about Bajaj Finserv Lending
8
2. a
Bajaj group structure
8
2.b
About Bajaj Finance Limited
8
2.b.1
Consumer finance
9
2.b.2
SME finance
10
2.b.3
Commercial finance
10
3.
What differentiate Bajaj Finance
13
3.a
Key business line
13
3.b
Presence of Bajaj Finserv Lending
15
4.
Objective of the Study
16
5.
Scope of the project
17
5.a
Product under consumer durable loan
17
5.b
Features and Benefits
17
5.c
Eligibility & Documents
18
5.d
Fee & Charges
19
6.
IT product loan
20
6.a
Features and Benefits
20
6.b
Eligibility & Documents
20
7.
Cross selling
21
7.a
Insurance services
21
7.b
Extended warranty
22
7.b.1
Features & Benefits
22
7.c
EMI Card
23
7.c.1
Features & Benefits
23
8.
Process diagram of consumer finance
24
9.
Lifestyle finance
25
9.a
Features & Benefits
26
9.b
Eligibility & Documents
27
10.
Findings & Limitation
28
11.
SWOT analysis
29
12.
Suggestion & Recommendation
31
13.
Conclusion
32
14.
Bibliography
33
5|Bajaj Finserv Lending
Page No.
INTRODUCTION Promoted by the Bajaj Auto group in 1987 Demonstrated consistent profitability track record in lending space for the last 26 years. AUM of ` 1 7 5 1 7 c r o r e s , with a history of disbursing o v e r ` 7 8 5 0 + c r o r e s loans, as of FY13. Disbursed ` 2808 crores loans in FY13 A diversified lending business w i t h 12 product lines focusing on consumer finance & SME business. Strong distribution reach with more than 354 points of presence in 91 cities of India and more than 4,500 distribution partners and dealers across India Strategy is to focus on mass affluent customers in consumer businesses and affluent and HNI customers in small businesses, through a judicious mix of: – –
Lower risk and lower returns products, for building scale and stability Moderate risk and higher return products, for profit maximization
Stable and deep management structure with top 100 management team having experience from leading MNC and Transnational companies.
Bajaj Finserv Lending offers loans for various needs. We offer loans for Bajaj Auto Two Wheelers under the name of Bajaj Auto Finance Ltd. We offer Consumer Durable Loans, Personal Loans, Loan against Property, Small Business Loans, Construction Equipment Loans, Loan against Securities and Insurance Services under the name of Bajaj Finserv Lending. Bajaj Finserv Lending is one of the most diversified NBFCs in the market catering to more than 7 million customers across the country. Apart from being a well recognized organization, we pride ourselves for holding the highest credit rating of FAAA/Stable for any NBFC in the country today. Our product offerings include Consumer Durable Loans, Lifestyle finance, Personal Loans, Salaried Personal Loans, Small Business Loans, Twowheeler and Three-wheeler Loans, Construction Equipment Loans, Loan against Securities Infrastructure loan and vendor loans. Our unique products feature across all categories and offer a compelling value proposition to our customers. Our strong presence in the Indian market for over 26 years has enabled us to establish a strong foothold here 6|Bajaj Finserv Lending
and we aim to continuously provide our customers with service and exclusive benefits. Bajaj Finserv lending maintained its position as the largest consumer durables lender in India and helped finance 13% of all consumer electronics sold in the year. In doing so, it acquired over 1.9 million new customers and operated across 4,500 points of sale in the country. Bajaj Finserv lending is currently financing one out of every four LCD and plasma televisions sold in the country and works with all leading consumer durable manufacturers. Bajaj Finserv lending changed the buying pattern of consumer durables in India. It helps the people to avail consumer durable loan easily and get the products without getting of sudden or unorganized burden to their monthly budget. Since this finance 13% of all consumer durables sold in the year is very crucial for consumer electronics manufacturing industries. So the process of consumer loan financing is also important to run this business to great heights.
7|Bajaj Finserv Lending
INFORMATION ABOUT BAJAJ FINSERV LENDING BAJAJ GROUP STRUCTURE
BFS BAGIC BALIC BFL BFINSOL BAFDL BFINSEC -
Bajaj Finserv Limited Bajaj Allianz General Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Bajaj Finance Limited Bajaj Financial Solutions Limited Bajaj Allianz Financial Distributors Limited Bajaj Financial Securities Limited
About Bajaj Finance Ltd. (BFL) With assets under management of over ` 17,517 crores, BFL is one of the leading and diversified NBFCs in the country delivering excellent results. Highlights for FY2013 are given below.
Total income: up 43% to ` 3,111 crores. Profit before tax: up 45% to ` 872 crores. Profit after tax: up 46% to ` 591 crores. Deployment: up 23% to ` 19,367 crores. Assets under management: up 34% to ` 17,517 crores. Receivables under financing: up 36% to ` 16,744 crores.
8|Bajaj Finserv Lending
Net non-performing assets (net NPA) of 0.19%, among the lowest in the industry. Capital adequacy as on 31 March 2013: 21.95%, well above the RBI norms Bajaj Finance continues to focus on three broad categories: (A) Consumer finance, (B) SME finance, (C) Commercial lending. The quality of Bajaj Finance‘s loan book continued to remain strong despite a tough economic environment with net non-performing assets remaining at 0.19% demonstrating strong credit quality. BFL continued to strengthen its provisioning standards, and is the most prudent among NBFCs. In the current year, it further strengthened provisioning, and took an accelerated provisioning impact of ` 16.71 crores. By remaining focused on customer segments that it understands well, the Company expects to maintain its credit quality in the coming years. As on 31 March 2013, BFL‘s total borrowings stood at ` 13,133 crores. As earlier, it maintained strong Asset Liability Management (ALM) across maturities in FY2013. In the course of the fiscal year, BFL raised capital to the tune of ` 831 crores mainly by way of conversion of warrants (` 85 crores) and a rights issue (` 744 crores) taking its capital adequacy to a healthy 21.95% as on 31 March 2013. The Company is now well capitalized to fuel its growth targets for the next few years.
Consumer finance In FY2013, Bajaj Finance continued to remain the largest two-wheeler lender in the country. It operates at 578 Bajaj Auto dealerships as well as at over 2,130 of the sub-dealers across the country. The Company continued to successfully operate the Direct Cash Collection model in rural and semi-urban markets for customers with no banking habits, where they could repay the loan taken, by using a cash repayment mode. During the year the Company launched a new product, ―Kisan Mitra‖ for farmers, where repayments of installments are synchronized to realizations from crops. Present in the top 91 cities of the country, BFL continued to be the largest consumer durables lender in India. Consumer durable financing deployments grew by 42% to ` 5,065 crores in FY2013. The Company acquired over 1.9 million new customers, and is currently present in over 4,500 points of sale across the country. BFL has a unique and innovative product offering called the EMI (Existing Member Identification) card for its existing consumer durable customers. The card entitles a customer to obtain a loan for incremental consumer durables with the facility to ‗Swipe, Sign and Go‘, so long as the earlier loans and payment performance have remained good. Today, the number of EMI cards in force exceeds 1 million. BFL has extended the existing ‗Zero per cent‘ interest offering for consumer durables to financing lifestyle products like furniture, home furnishings, fitness equipment, luxury watches,
9|Bajaj Finserv Lending
and so on. FY2013 was the first year of this launch. It saw over 37,000 disbursements across over 1,000 retailer stores spread among 25 locations.
SME finance The Loan against Property and Home Loans business is present in the top 39 cities and 28 cities of India respectively. It focuses on the super affluent class — high net worth small business and self-employed and salaried customers — and offers loans against the mortgage of retail, residential or commercial premises and home loans. A new product offering called Flexi saver, introduced in the last fiscal year, has been well accepted and attracted over 150 affluent customers. This offering gives such customers the flexibility to ‗draw when they want‘ and ‗pay when they want‘. BFL also offers unsecured Working Capital Loans to carefully chosen affluent small business customers, doctors and other professionals. It has operations in the top 58 cities across India.
Commercial finance Present in the top 23 cities in India, Construction Equipment business focuses on financing small, mid-sized and large contractors for their construction equipment needs. It is an asset backed financing business collateralized by construction equipment assets. After building a book size of ` 922 crores until last year, the Company took a conscious decision to slow down this business, given the problems that are facing infrastructure and construction in India. Its strategy was proven right since the condition of this portfolio showed signs of stress throughout the year. BFL concentrated on maintaining the quality of its portfolio during FY2013 and fresh deployments during the year were ` 349 crores. As touched upon earlier, the infrastructure sector is currently ing through a very difficult phase. In such an environment, BFL has been selective in lending in this sector. During the year no new loans were approved. It has taken a prudent approach to continue reviewing this area very carefully and is focused on a wait and watch policy and on maintaining the quality of its portfolio. In FY2013, BFL deployed ` 179 crores, and ended the year with a receivable book of ` 439 crores. Deployment of Loans in BFL from FY12 to FY13
10 | B a j a j F i n s e r v L e n d i n g
Financial results of BFL of FY12 and FY13
11 | B a j a j F i n s e r v L e n d i n g
Receivable financed loan under BFL for FY12 & FY13
12 | B a j a j F i n s e r v L e n d i n g
WHAT DIFFERENCIATE BAJAJ FINANCE Bajaj Finserv Lending is one of the leading companies of India in financial services. These are the few points which mainly differentiate BFL among all companies in same financial services. Strong promoters • Promoted by erstwhile Bajaj Auto Ltd. Post the de-merger of Bajaj Auto, the shareholding in the Company was vested with Bajaj Finserv • Debt free balance sheets of the promoter, Bajaj Finserv and of the primary holding company, Bajaj Holdings & Investments Limited • 56.07% holding with promoter and promoter group. Diversified lending business model • 8 product line company focused on homogenous segments • Profitable mix of consumer & SME business • Balanced mix of secured and unsecured assets Affluent & HNI customer focused business model • Focus on acquiring & servicing affluent & HNI clients (with the exception of captive • 2Wheeler financing business) • Integral to risk management strategy • Large wallet size allows deep cross sell framework Strong Distribution Reach • More than 225 points of presence across India • More than 4,000 distribution partners and dealers High technology management
orientation
and
robust
risk
• 100% dealer ―Point of Sale‖ terminalisation and E2E enterprise data warehouse for risk management and data mining capabilities • Distinct business, underwriting & risk management structure for robust risk management.
Stable & deep management structure. • Top 100 management team from leading MNCs. • SBU business structure allows scalability. • Top management vintage of 3 years.
Key Business Lines
13 | B a j a j F i n s e r v L e n d i n g
Bajaj Finserv Lending mainly deals in 3 areas i.e. consumer finance, SME finance and commercial finance. These are 12 financial products which come under these 3 financial areas. Mainly are mentioned below with its key feature and target customer base.
New idea and innovation in financial products and services takes the BFL on heights.
14 | B a j a j F i n s e r v L e n d i n g
PRESENCE OF BAJAJ FINSERV LENDING BFL is present in 91 cities of India and it has 354 geographic presences. It has disbursed ` 2808 crores loan amount in FY13
15 | B a j a j F i n s e r v L e n d i n g
OBJECTIVE OF THE STUDY
To find the buying pattern of consumer durables after finance provided by Bajaj Finserv Lending.
BFL is providing the consumer durable loans by which most of the potential customers i.e. those who are willing to purchase the product but onetime payment of product is problem for them. Initially the customers were not buying the products on finance due to high ROI. But when BFL has stated financing consumer durables at 0% ROI and 0(Zero) processing fee, customers are willing to buy at finance.
This study is to find out that this innovative idea of financing consumer durables at 0% ROI, changed the buying pattern of consumer durables
To find the perception of customers about Bajaj Finserv Lending.
Whether customers are financing the products from BFL, but what kind of perception they have about the company.
Whether BFL is only financing the product or providing the good services to customers. Is company making good existing customer base by providing good services.
To find the consumer durable finance process.
Process of finance approval for consumer durables
What are the eligibility criteria for financing loan and so on
16 | B a j a j F i n s e r v L e n d i n g
SCOPE OF PROJECT The scope of project was to finance the consumer durable loan to the customer and cross selling of products like EMI card, Extended warranty and Insurance services. To resolve the queries of existing customers and provide the information about their loan amount, EMI amount, tenor and down payment of loan which they are availing. PRODUCTS UNDER CONSUMER DURABLE LOANS
LED/LCD/CTV
Washing Machines
Microwave Ovens
Refrigerators,
Cameras/Camcorders
Dishwashers
Generators
Cooking Range products
Dryers
Laptops
Air purifiers / Water Purifiers / R.O.
Music Systems
Inverters
Air conditioners
Mobile Phones
Bajaj Finserv Lending is one of the leading financiers in the market offering consumer durable loans on EMI. Now you can easily avail a loan for products like LCD, LED, Color TV, Refrigerator, Washing Machine, Air Conditioner, Music System, Microwave etc amongst a host of other products. Bajaj Finserv Lending consumer durable loan comes with 0% financing and with a small fee. You can apply online on our website and get an instant approval or visit a dealership to easily avail a loan. We provide on the spot approval with minimum documentation & fast processing.
FEATURES & BENEFITS Features
17 | B a j a j F i n s e r v L e n d i n g
Bajaj Finance, the sole organized financier in the market offering Consumer Durable loans offers you Dreams on EMI, with 0% finance options also available. CD loans are EMI loans for Consumer Durable items like Washing Machines, Refrigerators, Color TV's, LCD's etc. These CD loans come at a very reasonable pr ice, with a very simple process. You can just walk into one of our Dealer partner showrooms and avail of this facility for the item of your choice. Loans are available for amounts more than Rs.7000. Multiple Credit programs are also available to suit your fitment.
Avail loans ranging from Rs. 7,000 to Rs. 5,00,000 for Washing Machines, Refrigerators, Color TVs, LCDs and other consumer durables. Apply Online or walk in to one of our Dealer Partner showrooms and get your loan approved in 15 minutes. Benefits
0% finance options available (for select schemes). Simple process with minimum documentation. On the spot approvals with fastest processing. Flexible repayment options. ECS clearing, reducing hassle of arranging cheques. Extended Warranty available. Pre-approved personal loan offers for existing customers*
Eligibility & Documents Eligibility If you are a salaried person your age should be between 21 years to 60 years. If you are Self Employed your age should be between 21 years to 65 years. Documents Documents required
Salaried
Self Employed
Photo Id Proof
yes
Yes
Residence proof
Yes
Yes
One Cheque in case of ECS
Yes
Yes
18 | B a j a j F i n s e r v L e n d i n g
Credit program specific documents ( Any one of the following) Credit Card front side photocopy
Yes
Yes
Visiting Card & Employee Id proof
Yes
No
Photocopy of RC book (Not applicable for vehicles ed after 2004 & commercial cars) Bajaj Finserv Lending existing loan Repayment Loan Number / Schedule (subject to not later than 18 months old)
Yes
Yes
Yes
Yes
Any other Bank/NBFC Repayment Schedule
Yes
Yes
Salary Slip
Yes
No
Banking Details (latest 6 months) TypeOD/ CC
Yes
Yes
Fees & Charges Amount Financed Slab
Processing Fees
Upto 15000/-
Rs.499/- to Rs.599/-*
Between Rs.15001/- & upto Rs.30,000/-*
Rs.599/- to Rs.699/-
Rs.30,001/- & above
Rs.699/- to Rs.799/-*
OTHER CHARGES
AMOUNT
Foreclosure Charges
NIL
PDC Swapping
Rs. 500
Bounce Charges
Cheque Bounce - Rs. 350 per cheque Late payment penalty - Rs. 150
19 | B a j a j F i n s e r v L e n d i n g
IT PRODUCT LOANS Features Bajaj Finance, the sole organized financier in the market offering IT Product loans, offers you Dream Desktop/Laptop on EMI, with 0% options also available. These IT Product loans come at a very reasonable price, with a very simple process. You can just walk into one of our Dealer partner showrooms and avail of this facility for the item of your choice. PC loans are available up to 100% of the product price. Loans are available for amounts above Rs. 20000. Benefits 0% finance options available (for select schemes). Simple process with minimum documentation. On the spot approvals with fastest processing. Flexible repayment options. ECS clearing, reducing hassle of arranging cheques. Extended Warranty available.
ELIGIBILITY & DOCUMENTS Eligibility If you are a salaried person your age should be between 21 years to 60 years. If you are Self Employed your age should be between 21 years to 65 years. Documents Documents required
Salaried
Self Employed
Photo Id Proof
Yes
Yes
Residence proof
Yes
Yes
3 Cheques
Yes
Yes
Credit program specific documents ( Any one of the following) Credit Card front side photocopy
Yes
Yes
Visiting Card & Employee Id proof
Yes
No
Photocopy of RC book (Not applicable for vehicles ed after 2004 & commercial cars) Bajaj Finserv Lending existing loan Repayment Loan Number / Schedule (subject to not later than 18 months old)
Yes
Yes
Yes
Yes
Any other Bank/NBFC Repayment Schedule
Yes
Yes
Salary Slip
Yes
No
CROSS SELLING Insurance Services Extended warranty EMI(Existing member identification) card
Insurance service Bajaj Finance Limited (BFL) has tied up with Bajaj Allianz Life (part of Bajaj Group), to offer a rich bouquet of world class life insurance products to suit the financial needs of all segments of buyers through different stages of their lives. With its successful track record and its highly acclaimed standing, Bajaj Allianz Life Insurance Company (BALI C) prides on serving over 8 million Indian customers. BAFL shares BALIC's philosophy of providing insurance solutions relevant to the customer's needs.
21 | B a j a j F i n s e r v L e n d i n g
Extended Warranty Products Covered Extended Warranty covers the cost of repair/ replacement of the consumer durable appliance (i.e. insured asset) arising out of unforeseen defects in material or workmanship within the Policy Period. Whereas Policy Period is defined as 12 months, commencing after expiry of manufacturer‘s product warranty period. Sum Insured of the insured asset is equal to the Invoice price. Maximum claim payment under the policy is equal to the Sum Insured. Repair services are to be performed at authorized service centers only. For a list of service centers, check out the section on Service Centers The lists of products covered under the Extended Warranty program are: Colour television (CTV, LCD, LED)
Music system
Refrigerator
Handy cam
Washing machine
Water purifier
Air conditioner
Vacuum cleaner
Camera
Dish washer
Microwave oven
Cloth dryer
Personal computer
Air purifier
Laptop
Condenser dryer
iPod
Kitchen appliances
Home theatre
Features and Benefits We deploy technology and apply innovation to create unique and compelling propositions that help you do what you always wanted to do. Hereunder are a host of unique features and benefits that you enjoy with Extended Warranty from Bajaj Finserv Lending. Most of these features are industry firsts and come only with our portfolio of offerings. Read on to know more: One year additional warranty with Extended Warranty, you enjoy one year‘s additional warranty over and above the standard manufacturer warranty offered on your consumer durable. For example, if your product comes with two year manufacturer warranty, with Extended Warranty, you get an additional year of warranty. Therefore, giving you extended peace of mind and freedom. 22 | B a j a j F i n s e r v L e n d i n g
IRDA approved Extended Warranty from Bajaj Finserv Lending is an IRDA approved program. While there may be other warranty programs offered in the market, those do not come with the assurance of an approval of the regulating body, assuring you the best of service. Partnership with Bajaj Allianz General Insurance Ltd (BAGIC), Our Extended Warranty program has been launched in partnership with one of our group companies Bajaj Allianz General Insurance Ltd. BAGIC has been awarded the IAAA rating by the rating agency ICRA for being the best in claim settlements. As a result, you are assured that in case anything goes wrong with the product and cannot be repaired, your claims will be settled in the quickest possible time, ensuring you don't have to go through any hassles.
EMI (EXISTING MEMBER IDENTIFICATION) CARD Features and Benefits We deploy technology and apply innovation to create unique and compelling propositions that helps you do what you always wanted to do. Hereunder are a host of unique features and benefits that you enjoy with EMI Cards from Bajaj Finserv Lending. Pre-Approved eligibility: The EMI card carries a pre-approved loan in your wallet. You can avail of your loan facility to purchase any consumer durable & lifestyle product of your choice. Instant approval: Simply Swipe, Sign and Buy with your EMI card. The moment you swipe your card, you get instant approval, subject to the amount pre-approved for you. Minimum documentation: For using your EMI card, you don't need to give any documents. Your EMI card carries all the necessary information required. Preapproved Offers: As an existing customer, you get exclusive preapproved offers from time to time across a host of our partner retailers and manufacturers. Online Access: Get all information about your loan like repayment track, interest certificate, payment schedule etc through our digital customer portal. Just with your loan number and access whatever information you want about your loan.
EMI Card is issued only to our existing customers Only the following documents are required for getting your EMI card:
Open ECS mandate duly signed (Open ECS is same as other ECS with an extended period so that you don‘t have to give fresh ECS for your purchases in future.)
23 | B a j a j F i n s e r v L e n d i n g
One cancelled cheque
KYC formalities
Fees and Charges All you have to pay is one time charge of Rs.249 (to enjoy lifetime hip of EMI card).
PROCESS DIAGRAM OF CONSUMER FINANCE
24 | B a j a j F i n s e r v L e n d i n g
LIFESTYLE FINANCE Products Covered 0% interest Lifestyle Finance is available on a wide range of lifestyle products. Hereunder is an indicative list: Home improvements and furniture
Modular kitchens
Jacuzzi & bathroom fittings
Kitchen equipments
Home furnishings
Luxury watches
Digital lifestyle products
For a detailed listing of what all items are covered in sections like Home improvements and Furniture and Fitness equipment, please refer to the tables below: Home improvements and furniture Antiques
Bar unit
Bath and sanitary ware
Bed set
Bedroom set
Book case
Carpets
Centre table
Console
Curio cabinet
Curtain stitching
Curtain tracks
Customized modular kitchens Day bed
Dining set
Dining table
Dresser mirror
Electric chimney
Glass top dining set
Hobs
Home improvement accessories
Hoods
Italian furniture
Kitchen cabinet
Library cabinet
Living and dining room sets Lounger
Occasional chair
Recliners
Rugs
Separator
Shoe cabinet
Side table
Sofa cum bed
Sofa sets
Solid rubber wood furniture
Tableware
Wall cabinet
Wall units
Wardrobes Fitness equipment Bow flex
Cable Cross
25 | B a j a j F i n s e r v L e n d i n g
Cross sprinter
Cross trainers
Cycles
Elliptical
Fitness bike
Home Gym
Massage chairs and accessories
Motorized tread mill
Orbitrators
Oyster steam room machine
Platinum Dip Station
Recumbent bikes
Rowers
Spin Racing bike
Sprinter (spin) bike
Treill
Upright bike
Vibration plate
Features and Benefits We deploy technology and apply innovation to create unique and compelling propositions that help you do what you always wanted to do. Hereunder are a host of unique features and benefits that you enjoy with 0% interest Lifestyle Finance from Bajaj Finserv Lending. Most of these features are industry firsts and come only with our portfolio of offerings. Loan amounts of up to Rs. 3 lacs: You can get up to 3 lacs at 0% towards the purchase of your favorite lifestyle product. Instant and on the spot approval: You don't have to visit any branch or wait for days to get your loan approved. Through our in store representatives present in the various partner stores, you can get instant approval in 5 mins. All you need is basic documents like a PAN card, driving license etc and a few details. Minimal documentation: Forget realms and realms of papers and never-ending forms. All you need is a few documents like PAN card, driving license etc and basic information to be filled in the loan application form. Most of the formalities can be completed while you are in the store choosing your favourite consumer durable. Part Prepayment facility: You can prepay up to 6 times in a calendar year at any interval with the minimum amount per prepay transaction being not less than 3 EMIs. There is no limit on the maximum amount. This is subject to your clearing your first EMI. Preapproved Offers: As an existing customer, you get exclusive preapproved offers from time to time. Online Access: Get all information about your loan like repayment track, interest certificate, payment schedule etc through our digital customer portal. Just with your loan number and access whatever information you want about your loan.
26 | B a j a j F i n s e r v L e n d i n g
Eligibility and Documents
You are a salaried person and between 21 years and 60 years You are a Self employed professional and between 21 years and 65 years of age. Documents
Salaried
Photo Id Proof Yes Residence proof Yes One cancelled cheque in case of ECS Yes Credit program specific documents ( Any one of the following) Credit card front side photocopy Yes Visiting card & Employee Id proof Yes Photocopy of RC book (Not applicable for Yes vehicles ed after 2004 & commercial cars) Bajaj Finserv Lending existing loan repayment Yes Loan Number / Schedule (subject to not later than 18 months old) Any other Bank/NBFC repayment schedule Yes Latest salary slip Yes Banking details (latest 6 months) type - OD/ CC
of
age.
Self Employed Yes Yes Yes Yes Yes Yes
Yes Yes
Fees and Charges All you have to pay for availing of 0% interest Lifestyle Finance is a nominal processing fee depending on your loan amount as per the table hereunder: Loan amount
Processing fees
Between Rs.15001 and up to Rs.30,000*
Rs.599 to Rs.699
Rs.30,000 and above
Rs.699 to Rs.799*
27 | B a j a j F i n s e r v L e n d i n g
FINDINGS AND LIMITATIONS Findings Majority of of finance cases happen in the evening time between 6 PM to 10 PM. Number of on weekends is higher than other days of the week. Most finance is for the products ranging more than Rs. 10,000. Repeat sale for existing customers is increasing day by day hence this holds a great scope in future. Finance demand for products at their peak sale season is very high urging for special schemes for those categories at that time. Example – Air Coolers & AC‘s in summers and Washing Machines in Rainy Season. Customers are unclear about the documentation requirement which creates frustration among them leading to loss of sales. Heavy workload at the time of month end due to excess number of pending finance case files. Sudden change in finance scheme by manufactures arise and processing issue.
Limitations Verification process in case of IT products gets delayed very often. Potential customers unaware of the various schemes provided by Bajaj Finserv Lending. Initiative taken for the sale of Insurance Product (Group Suraksha Plan) is low among the Bajaj Executives. Negative Area list needs modification. Sales executive needs training of finance case filing. Sometimes credit documents are not as per approved credit program. Sales executive should make aware the customer about cross selling products at time of loan finance. Per finance case file base incentive system arise mishandling and improper eligibility documents 28 | B a j a j F i n s e r v L e n d i n g
SWOT ANALYSIS Strengths Monopoly player in the Consumer durable finance market. Insurance Product (Group Suraksha Plan) is an incredible product also providing cross sale. 0% finance facility. EMI Card provided for existing customer is one of a kind service. BFL has presence at all the major retail counters throughout the country. Strong network of executives with a responsible managerial hierarchy.
Weakness
Low Control on the Payment Default by customers. Concentration needed on cross selling. Lot of dependence on the Online System. Customer Service and handling needs improvement.
Opportunities
Market has a lot of growth opportunities. Consumer Finance being an untapped market holds great scope. Use the market as a good platform for cross selling. Create a brand identity of its own, strengthening the brand Bajaj. Opportunities in Rural market. Opportunities available to reach the top position amongst the Finance Companies and establish itself internationally. 29 | B a j a j F i n s e r v L e n d i n g
Threats
New competitors entering the market with similar offerings. (HDFC, Shriram). There is always a threat of Losses due to payment defaults in such business.
30 | B a j a j F i n s e r v L e n d i n g
SUGGESTIONS & RECOMMENDATIONS
Management must encourage Executives to concentrate more on Cross Selling. Finance schemes for strong seasonal sale products should be introduced. A promotional campaign must be run clarifying the benefits and offerings of BFL which will clear the doubts about 0 % finance & 0 processing fees. Regular training should be provided to sales executive to avoid mistakes There should be provision to cross check for the sale of cross selling products. Processing fees should not be charged from the EMI card holders in the case of Consumer Durables as it will create loyalty among customers and will help build a strong customer base even before the competitors entering the market. A single agency must be hired for the verification purpose for the entire BFL to improve the uniformity of the process. Also, there is a great need of proper control over the verification process to reduce the lag time in verification.
31 | B a j a j F i n s e r v L e n d i n g
CONCLUSION
Bajaj Finserv Lending is largest consumer durable loan finance company. It changed the buying pattern of consumer durables in India. It also helps consumer durable manufacturer for their high stock turnover ratio. It also changed the lifestyle of people of India who can fulfill their requirement and provide them 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.
Consumer Finance market being an untapped one in India holds a great scope for progress and market capture and BFL has been exceptional in that till date.
32 | B a j a j F i n s e r v L e n d i n g
BIBLIOGRAPHY
Annual Report – Bajaj Finserv Lending.
Quarterly report of Bajaj Finserv Lending
Websites http://www.bajajfinservlending.in http://www.bajajfinserv.in
33 | B a j a j F i n s e r v L e n d i n g
POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) SUMMER INTERNSHIP REPORT SAURABH KUMAR 13148 1|Bajaj Finserv Lending
INTERNATIONAL SCHOOL OF BUSINESS & MEDIA, PUNE POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)
SUMMER INTERNSHIP REPORT ON A STUDY ON CONSUMER DURABLE’S FINANCE PROCESS OF
Submitted by: Saurabh Kumar 13148
2|Bajaj Finserv Lending
DECLARATION
I hereby declare that the Project Report “FINANCE PENETRATION AT R DISTRIBUTORS” for BAJAJ FINSERV LENDING Submitted for the PGDM at International School of Business and Media, Pune - Nande is my original work and the dissertation has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.
Place: Pune Date:
(Saurabh Kumar)
3|Bajaj Finserv Lending
ACKNOWLEDGEMENT
“Acknowledgement is an art, one can write glib stanzas without meaning a word and on the other hand one can make a simple expression of gratitude.” Summer Internship is an integral part of any Business istration program and for that purposes I had ed a company what else can be as good as Bajaj Finserv Lending, India's premier finance company. 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 Bajaj Finserv Lending, No amount of written expression is sufficient to show my deepest sense of gratitude to them. I am very thankful to Mr. Devendra (Regional Sales Manager), Mr. Priya Swarup Tripathy (Area Sales Manager), Mr. Vinay Pandey (Manager) Nagpur and very grateful to all my faculties at ISB&M, Nande Pune for their everlasting and guidance on the ground of which I have acquired a new field of knowledge. The course structure created for this curriculum has benefited with the inclusion of recent development in the organizational and managerial aspects. Lastly, I am thankful to all the member of Bajaj Finserv Lending, Nagpur, which has given me valuable information in the part of my project.
SAURABH KUMAR 13148
4|Bajaj Finserv Lending
TABLE OF CONTENT Sr. No
Particular
1.
Introduction
6
2.
Information about Bajaj Finserv Lending
8
2. a
Bajaj group structure
8
2.b
About Bajaj Finance Limited
8
2.b.1
Consumer finance
9
2.b.2
SME finance
10
2.b.3
Commercial finance
10
3.
What differentiate Bajaj Finance
13
3.a
Key business line
13
3.b
Presence of Bajaj Finserv Lending
15
4.
Objective of the Study
16
5.
Scope of the project
17
5.a
Product under consumer durable loan
17
5.b
Features and Benefits
17
5.c
Eligibility & Documents
18
5.d
Fee & Charges
19
6.
IT product loan
20
6.a
Features and Benefits
20
6.b
Eligibility & Documents
20
7.
Cross selling
21
7.a
Insurance services
21
7.b
Extended warranty
22
7.b.1
Features & Benefits
22
7.c
EMI Card
23
7.c.1
Features & Benefits
23
8.
Process diagram of consumer finance
24
9.
Lifestyle finance
25
9.a
Features & Benefits
26
9.b
Eligibility & Documents
27
10.
Findings & Limitation
28
11.
SWOT analysis
29
12.
Suggestion & Recommendation
31
13.
Conclusion
32
14.
Bibliography
33
5|Bajaj Finserv Lending
Page No.
INTRODUCTION Promoted by the Bajaj Auto group in 1987 Demonstrated consistent profitability track record in lending space for the last 26 years. AUM of ` 1 7 5 1 7 c r o r e s , with a history of disbursing o v e r ` 7 8 5 0 + c r o r e s loans, as of FY13. Disbursed ` 2808 crores loans in FY13 A diversified lending business w i t h 12 product lines focusing on consumer finance & SME business. Strong distribution reach with more than 354 points of presence in 91 cities of India and more than 4,500 distribution partners and dealers across India Strategy is to focus on mass affluent customers in consumer businesses and affluent and HNI customers in small businesses, through a judicious mix of: – –
Lower risk and lower returns products, for building scale and stability Moderate risk and higher return products, for profit maximization
Stable and deep management structure with top 100 management team having experience from leading MNC and Transnational companies.
Bajaj Finserv Lending offers loans for various needs. We offer loans for Bajaj Auto Two Wheelers under the name of Bajaj Auto Finance Ltd. We offer Consumer Durable Loans, Personal Loans, Loan against Property, Small Business Loans, Construction Equipment Loans, Loan against Securities and Insurance Services under the name of Bajaj Finserv Lending. Bajaj Finserv Lending is one of the most diversified NBFCs in the market catering to more than 7 million customers across the country. Apart from being a well recognized organization, we pride ourselves for holding the highest credit rating of FAAA/Stable for any NBFC in the country today. Our product offerings include Consumer Durable Loans, Lifestyle finance, Personal Loans, Salaried Personal Loans, Small Business Loans, Twowheeler and Three-wheeler Loans, Construction Equipment Loans, Loan against Securities Infrastructure loan and vendor loans. Our unique products feature across all categories and offer a compelling value proposition to our customers. Our strong presence in the Indian market for over 26 years has enabled us to establish a strong foothold here 6|Bajaj Finserv Lending
and we aim to continuously provide our customers with service and exclusive benefits. Bajaj Finserv lending maintained its position as the largest consumer durables lender in India and helped finance 13% of all consumer electronics sold in the year. In doing so, it acquired over 1.9 million new customers and operated across 4,500 points of sale in the country. Bajaj Finserv lending is currently financing one out of every four LCD and plasma televisions sold in the country and works with all leading consumer durable manufacturers. Bajaj Finserv lending changed the buying pattern of consumer durables in India. It helps the people to avail consumer durable loan easily and get the products without getting of sudden or unorganized burden to their monthly budget. Since this finance 13% of all consumer durables sold in the year is very crucial for consumer electronics manufacturing industries. So the process of consumer loan financing is also important to run this business to great heights.
7|Bajaj Finserv Lending
INFORMATION ABOUT BAJAJ FINSERV LENDING BAJAJ GROUP STRUCTURE
BFS BAGIC BALIC BFL BFINSOL BAFDL BFINSEC -
Bajaj Finserv Limited Bajaj Allianz General Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Bajaj Finance Limited Bajaj Financial Solutions Limited Bajaj Allianz Financial Distributors Limited Bajaj Financial Securities Limited
About Bajaj Finance Ltd. (BFL) With assets under management of over ` 17,517 crores, BFL is one of the leading and diversified NBFCs in the country delivering excellent results. Highlights for FY2013 are given below.
Total income: up 43% to ` 3,111 crores. Profit before tax: up 45% to ` 872 crores. Profit after tax: up 46% to ` 591 crores. Deployment: up 23% to ` 19,367 crores. Assets under management: up 34% to ` 17,517 crores. Receivables under financing: up 36% to ` 16,744 crores.
8|Bajaj Finserv Lending
Net non-performing assets (net NPA) of 0.19%, among the lowest in the industry. Capital adequacy as on 31 March 2013: 21.95%, well above the RBI norms Bajaj Finance continues to focus on three broad categories: (A) Consumer finance, (B) SME finance, (C) Commercial lending. The quality of Bajaj Finance‘s loan book continued to remain strong despite a tough economic environment with net non-performing assets remaining at 0.19% demonstrating strong credit quality. BFL continued to strengthen its provisioning standards, and is the most prudent among NBFCs. In the current year, it further strengthened provisioning, and took an accelerated provisioning impact of ` 16.71 crores. By remaining focused on customer segments that it understands well, the Company expects to maintain its credit quality in the coming years. As on 31 March 2013, BFL‘s total borrowings stood at ` 13,133 crores. As earlier, it maintained strong Asset Liability Management (ALM) across maturities in FY2013. In the course of the fiscal year, BFL raised capital to the tune of ` 831 crores mainly by way of conversion of warrants (` 85 crores) and a rights issue (` 744 crores) taking its capital adequacy to a healthy 21.95% as on 31 March 2013. The Company is now well capitalized to fuel its growth targets for the next few years.
Consumer finance In FY2013, Bajaj Finance continued to remain the largest two-wheeler lender in the country. It operates at 578 Bajaj Auto dealerships as well as at over 2,130 of the sub-dealers across the country. The Company continued to successfully operate the Direct Cash Collection model in rural and semi-urban markets for customers with no banking habits, where they could repay the loan taken, by using a cash repayment mode. During the year the Company launched a new product, ―Kisan Mitra‖ for farmers, where repayments of installments are synchronized to realizations from crops. Present in the top 91 cities of the country, BFL continued to be the largest consumer durables lender in India. Consumer durable financing deployments grew by 42% to ` 5,065 crores in FY2013. The Company acquired over 1.9 million new customers, and is currently present in over 4,500 points of sale across the country. BFL has a unique and innovative product offering called the EMI (Existing Member Identification) card for its existing consumer durable customers. The card entitles a customer to obtain a loan for incremental consumer durables with the facility to ‗Swipe, Sign and Go‘, so long as the earlier loans and payment performance have remained good. Today, the number of EMI cards in force exceeds 1 million. BFL has extended the existing ‗Zero per cent‘ interest offering for consumer durables to financing lifestyle products like furniture, home furnishings, fitness equipment, luxury watches,
9|Bajaj Finserv Lending
and so on. FY2013 was the first year of this launch. It saw over 37,000 disbursements across over 1,000 retailer stores spread among 25 locations.
SME finance The Loan against Property and Home Loans business is present in the top 39 cities and 28 cities of India respectively. It focuses on the super affluent class — high net worth small business and self-employed and salaried customers — and offers loans against the mortgage of retail, residential or commercial premises and home loans. A new product offering called Flexi saver, introduced in the last fiscal year, has been well accepted and attracted over 150 affluent customers. This offering gives such customers the flexibility to ‗draw when they want‘ and ‗pay when they want‘. BFL also offers unsecured Working Capital Loans to carefully chosen affluent small business customers, doctors and other professionals. It has operations in the top 58 cities across India.
Commercial finance Present in the top 23 cities in India, Construction Equipment business focuses on financing small, mid-sized and large contractors for their construction equipment needs. It is an asset backed financing business collateralized by construction equipment assets. After building a book size of ` 922 crores until last year, the Company took a conscious decision to slow down this business, given the problems that are facing infrastructure and construction in India. Its strategy was proven right since the condition of this portfolio showed signs of stress throughout the year. BFL concentrated on maintaining the quality of its portfolio during FY2013 and fresh deployments during the year were ` 349 crores. As touched upon earlier, the infrastructure sector is currently ing through a very difficult phase. In such an environment, BFL has been selective in lending in this sector. During the year no new loans were approved. It has taken a prudent approach to continue reviewing this area very carefully and is focused on a wait and watch policy and on maintaining the quality of its portfolio. In FY2013, BFL deployed ` 179 crores, and ended the year with a receivable book of ` 439 crores. Deployment of Loans in BFL from FY12 to FY13
10 | B a j a j F i n s e r v L e n d i n g
Financial results of BFL of FY12 and FY13
11 | B a j a j F i n s e r v L e n d i n g
Receivable financed loan under BFL for FY12 & FY13
12 | B a j a j F i n s e r v L e n d i n g
WHAT DIFFERENCIATE BAJAJ FINANCE Bajaj Finserv Lending is one of the leading companies of India in financial services. These are the few points which mainly differentiate BFL among all companies in same financial services. Strong promoters • Promoted by erstwhile Bajaj Auto Ltd. Post the de-merger of Bajaj Auto, the shareholding in the Company was vested with Bajaj Finserv • Debt free balance sheets of the promoter, Bajaj Finserv and of the primary holding company, Bajaj Holdings & Investments Limited • 56.07% holding with promoter and promoter group. Diversified lending business model • 8 product line company focused on homogenous segments • Profitable mix of consumer & SME business • Balanced mix of secured and unsecured assets Affluent & HNI customer focused business model • Focus on acquiring & servicing affluent & HNI clients (with the exception of captive • 2Wheeler financing business) • Integral to risk management strategy • Large wallet size allows deep cross sell framework Strong Distribution Reach • More than 225 points of presence across India • More than 4,000 distribution partners and dealers High technology management
orientation
and
robust
risk
• 100% dealer ―Point of Sale‖ terminalisation and E2E enterprise data warehouse for risk management and data mining capabilities • Distinct business, underwriting & risk management structure for robust risk management.
Stable & deep management structure. • Top 100 management team from leading MNCs. • SBU business structure allows scalability. • Top management vintage of 3 years.
Key Business Lines
13 | B a j a j F i n s e r v L e n d i n g
Bajaj Finserv Lending mainly deals in 3 areas i.e. consumer finance, SME finance and commercial finance. These are 12 financial products which come under these 3 financial areas. Mainly are mentioned below with its key feature and target customer base.
New idea and innovation in financial products and services takes the BFL on heights.
14 | B a j a j F i n s e r v L e n d i n g
PRESENCE OF BAJAJ FINSERV LENDING BFL is present in 91 cities of India and it has 354 geographic presences. It has disbursed ` 2808 crores loan amount in FY13
15 | B a j a j F i n s e r v L e n d i n g
OBJECTIVE OF THE STUDY
To find the buying pattern of consumer durables after finance provided by Bajaj Finserv Lending.
BFL is providing the consumer durable loans by which most of the potential customers i.e. those who are willing to purchase the product but onetime payment of product is problem for them. Initially the customers were not buying the products on finance due to high ROI. But when BFL has stated financing consumer durables at 0% ROI and 0(Zero) processing fee, customers are willing to buy at finance.
This study is to find out that this innovative idea of financing consumer durables at 0% ROI, changed the buying pattern of consumer durables
To find the perception of customers about Bajaj Finserv Lending.
Whether customers are financing the products from BFL, but what kind of perception they have about the company.
Whether BFL is only financing the product or providing the good services to customers. Is company making good existing customer base by providing good services.
To find the consumer durable finance process.
Process of finance approval for consumer durables
What are the eligibility criteria for financing loan and so on
16 | B a j a j F i n s e r v L e n d i n g
SCOPE OF PROJECT The scope of project was to finance the consumer durable loan to the customer and cross selling of products like EMI card, Extended warranty and Insurance services. To resolve the queries of existing customers and provide the information about their loan amount, EMI amount, tenor and down payment of loan which they are availing. PRODUCTS UNDER CONSUMER DURABLE LOANS
LED/LCD/CTV
Washing Machines
Microwave Ovens
Refrigerators,
Cameras/Camcorders
Dishwashers
Generators
Cooking Range products
Dryers
Laptops
Air purifiers / Water Purifiers / R.O.
Music Systems
Inverters
Air conditioners
Mobile Phones
Bajaj Finserv Lending is one of the leading financiers in the market offering consumer durable loans on EMI. Now you can easily avail a loan for products like LCD, LED, Color TV, Refrigerator, Washing Machine, Air Conditioner, Music System, Microwave etc amongst a host of other products. Bajaj Finserv Lending consumer durable loan comes with 0% financing and with a small fee. You can apply online on our website and get an instant approval or visit a dealership to easily avail a loan. We provide on the spot approval with minimum documentation & fast processing.
FEATURES & BENEFITS Features
17 | B a j a j F i n s e r v L e n d i n g
Bajaj Finance, the sole organized financier in the market offering Consumer Durable loans offers you Dreams on EMI, with 0% finance options also available. CD loans are EMI loans for Consumer Durable items like Washing Machines, Refrigerators, Color TV's, LCD's etc. These CD loans come at a very reasonable pr ice, with a very simple process. You can just walk into one of our Dealer partner showrooms and avail of this facility for the item of your choice. Loans are available for amounts more than Rs.7000. Multiple Credit programs are also available to suit your fitment.
Avail loans ranging from Rs. 7,000 to Rs. 5,00,000 for Washing Machines, Refrigerators, Color TVs, LCDs and other consumer durables. Apply Online or walk in to one of our Dealer Partner showrooms and get your loan approved in 15 minutes. Benefits
0% finance options available (for select schemes). Simple process with minimum documentation. On the spot approvals with fastest processing. Flexible repayment options. ECS clearing, reducing hassle of arranging cheques. Extended Warranty available. Pre-approved personal loan offers for existing customers*
Eligibility & Documents Eligibility If you are a salaried person your age should be between 21 years to 60 years. If you are Self Employed your age should be between 21 years to 65 years. Documents Documents required
Salaried
Self Employed
Photo Id Proof
yes
Yes
Residence proof
Yes
Yes
One Cheque in case of ECS
Yes
Yes
18 | B a j a j F i n s e r v L e n d i n g
Credit program specific documents ( Any one of the following) Credit Card front side photocopy
Yes
Yes
Visiting Card & Employee Id proof
Yes
No
Photocopy of RC book (Not applicable for vehicles ed after 2004 & commercial cars) Bajaj Finserv Lending existing loan Repayment Loan Number / Schedule (subject to not later than 18 months old)
Yes
Yes
Yes
Yes
Any other Bank/NBFC Repayment Schedule
Yes
Yes
Salary Slip
Yes
No
Banking Details (latest 6 months) TypeOD/ CC
Yes
Yes
Fees & Charges Amount Financed Slab
Processing Fees
Upto 15000/-
Rs.499/- to Rs.599/-*
Between Rs.15001/- & upto Rs.30,000/-*
Rs.599/- to Rs.699/-
Rs.30,001/- & above
Rs.699/- to Rs.799/-*
OTHER CHARGES
AMOUNT
Foreclosure Charges
NIL
PDC Swapping
Rs. 500
Bounce Charges
Cheque Bounce - Rs. 350 per cheque Late payment penalty - Rs. 150
19 | B a j a j F i n s e r v L e n d i n g
IT PRODUCT LOANS Features Bajaj Finance, the sole organized financier in the market offering IT Product loans, offers you Dream Desktop/Laptop on EMI, with 0% options also available. These IT Product loans come at a very reasonable price, with a very simple process. You can just walk into one of our Dealer partner showrooms and avail of this facility for the item of your choice. PC loans are available up to 100% of the product price. Loans are available for amounts above Rs. 20000. Benefits 0% finance options available (for select schemes). Simple process with minimum documentation. On the spot approvals with fastest processing. Flexible repayment options. ECS clearing, reducing hassle of arranging cheques. Extended Warranty available.
ELIGIBILITY & DOCUMENTS Eligibility If you are a salaried person your age should be between 21 years to 60 years. If you are Self Employed your age should be between 21 years to 65 years. Documents Documents required
Salaried
Self Employed
Photo Id Proof
Yes
Yes
Residence proof
Yes
Yes
3 Cheques
Yes
Yes
Credit program specific documents ( Any one of the following) Credit Card front side photocopy
Yes
Yes
Visiting Card & Employee Id proof
Yes
No
Photocopy of RC book (Not applicable for vehicles ed after 2004 & commercial cars) Bajaj Finserv Lending existing loan Repayment Loan Number / Schedule (subject to not later than 18 months old)
Yes
Yes
Yes
Yes
Any other Bank/NBFC Repayment Schedule
Yes
Yes
Salary Slip
Yes
No
CROSS SELLING Insurance Services Extended warranty EMI(Existing member identification) card
Insurance service Bajaj Finance Limited (BFL) has tied up with Bajaj Allianz Life (part of Bajaj Group), to offer a rich bouquet of world class life insurance products to suit the financial needs of all segments of buyers through different stages of their lives. With its successful track record and its highly acclaimed standing, Bajaj Allianz Life Insurance Company (BALI C) prides on serving over 8 million Indian customers. BAFL shares BALIC's philosophy of providing insurance solutions relevant to the customer's needs.
21 | B a j a j F i n s e r v L e n d i n g
Extended Warranty Products Covered Extended Warranty covers the cost of repair/ replacement of the consumer durable appliance (i.e. insured asset) arising out of unforeseen defects in material or workmanship within the Policy Period. Whereas Policy Period is defined as 12 months, commencing after expiry of manufacturer‘s product warranty period. Sum Insured of the insured asset is equal to the Invoice price. Maximum claim payment under the policy is equal to the Sum Insured. Repair services are to be performed at authorized service centers only. For a list of service centers, check out the section on Service Centers The lists of products covered under the Extended Warranty program are: Colour television (CTV, LCD, LED)
Music system
Refrigerator
Handy cam
Washing machine
Water purifier
Air conditioner
Vacuum cleaner
Camera
Dish washer
Microwave oven
Cloth dryer
Personal computer
Air purifier
Laptop
Condenser dryer
iPod
Kitchen appliances
Home theatre
Features and Benefits We deploy technology and apply innovation to create unique and compelling propositions that help you do what you always wanted to do. Hereunder are a host of unique features and benefits that you enjoy with Extended Warranty from Bajaj Finserv Lending. Most of these features are industry firsts and come only with our portfolio of offerings. Read on to know more: One year additional warranty with Extended Warranty, you enjoy one year‘s additional warranty over and above the standard manufacturer warranty offered on your consumer durable. For example, if your product comes with two year manufacturer warranty, with Extended Warranty, you get an additional year of warranty. Therefore, giving you extended peace of mind and freedom. 22 | B a j a j F i n s e r v L e n d i n g
IRDA approved Extended Warranty from Bajaj Finserv Lending is an IRDA approved program. While there may be other warranty programs offered in the market, those do not come with the assurance of an approval of the regulating body, assuring you the best of service. Partnership with Bajaj Allianz General Insurance Ltd (BAGIC), Our Extended Warranty program has been launched in partnership with one of our group companies Bajaj Allianz General Insurance Ltd. BAGIC has been awarded the IAAA rating by the rating agency ICRA for being the best in claim settlements. As a result, you are assured that in case anything goes wrong with the product and cannot be repaired, your claims will be settled in the quickest possible time, ensuring you don't have to go through any hassles.
EMI (EXISTING MEMBER IDENTIFICATION) CARD Features and Benefits We deploy technology and apply innovation to create unique and compelling propositions that helps you do what you always wanted to do. Hereunder are a host of unique features and benefits that you enjoy with EMI Cards from Bajaj Finserv Lending. Pre-Approved eligibility: The EMI card carries a pre-approved loan in your wallet. You can avail of your loan facility to purchase any consumer durable & lifestyle product of your choice. Instant approval: Simply Swipe, Sign and Buy with your EMI card. The moment you swipe your card, you get instant approval, subject to the amount pre-approved for you. Minimum documentation: For using your EMI card, you don't need to give any documents. Your EMI card carries all the necessary information required. Preapproved Offers: As an existing customer, you get exclusive preapproved offers from time to time across a host of our partner retailers and manufacturers. Online Access: Get all information about your loan like repayment track, interest certificate, payment schedule etc through our digital customer portal. Just with your loan number and access whatever information you want about your loan.
EMI Card is issued only to our existing customers Only the following documents are required for getting your EMI card:
Open ECS mandate duly signed (Open ECS is same as other ECS with an extended period so that you don‘t have to give fresh ECS for your purchases in future.)
23 | B a j a j F i n s e r v L e n d i n g
One cancelled cheque
KYC formalities
Fees and Charges All you have to pay is one time charge of Rs.249 (to enjoy lifetime hip of EMI card).
PROCESS DIAGRAM OF CONSUMER FINANCE
24 | B a j a j F i n s e r v L e n d i n g
LIFESTYLE FINANCE Products Covered 0% interest Lifestyle Finance is available on a wide range of lifestyle products. Hereunder is an indicative list: Home improvements and furniture
Modular kitchens
Jacuzzi & bathroom fittings
Kitchen equipments
Home furnishings
Luxury watches
Digital lifestyle products
For a detailed listing of what all items are covered in sections like Home improvements and Furniture and Fitness equipment, please refer to the tables below: Home improvements and furniture Antiques
Bar unit
Bath and sanitary ware
Bed set
Bedroom set
Book case
Carpets
Centre table
Console
Curio cabinet
Curtain stitching
Curtain tracks
Customized modular kitchens Day bed
Dining set
Dining table
Dresser mirror
Electric chimney
Glass top dining set
Hobs
Home improvement accessories
Hoods
Italian furniture
Kitchen cabinet
Library cabinet
Living and dining room sets Lounger
Occasional chair
Recliners
Rugs
Separator
Shoe cabinet
Side table
Sofa cum bed
Sofa sets
Solid rubber wood furniture
Tableware
Wall cabinet
Wall units
Wardrobes Fitness equipment Bow flex
Cable Cross
25 | B a j a j F i n s e r v L e n d i n g
Cross sprinter
Cross trainers
Cycles
Elliptical
Fitness bike
Home Gym
Massage chairs and accessories
Motorized tread mill
Orbitrators
Oyster steam room machine
Platinum Dip Station
Recumbent bikes
Rowers
Spin Racing bike
Sprinter (spin) bike
Treill
Upright bike
Vibration plate
Features and Benefits We deploy technology and apply innovation to create unique and compelling propositions that help you do what you always wanted to do. Hereunder are a host of unique features and benefits that you enjoy with 0% interest Lifestyle Finance from Bajaj Finserv Lending. Most of these features are industry firsts and come only with our portfolio of offerings. Loan amounts of up to Rs. 3 lacs: You can get up to 3 lacs at 0% towards the purchase of your favorite lifestyle product. Instant and on the spot approval: You don't have to visit any branch or wait for days to get your loan approved. Through our in store representatives present in the various partner stores, you can get instant approval in 5 mins. All you need is basic documents like a PAN card, driving license etc and a few details. Minimal documentation: Forget realms and realms of papers and never-ending forms. All you need is a few documents like PAN card, driving license etc and basic information to be filled in the loan application form. Most of the formalities can be completed while you are in the store choosing your favourite consumer durable. Part Prepayment facility: You can prepay up to 6 times in a calendar year at any interval with the minimum amount per prepay transaction being not less than 3 EMIs. There is no limit on the maximum amount. This is subject to your clearing your first EMI. Preapproved Offers: As an existing customer, you get exclusive preapproved offers from time to time. Online Access: Get all information about your loan like repayment track, interest certificate, payment schedule etc through our digital customer portal. Just with your loan number and access whatever information you want about your loan.
26 | B a j a j F i n s e r v L e n d i n g
Eligibility and Documents
You are a salaried person and between 21 years and 60 years You are a Self employed professional and between 21 years and 65 years of age. Documents
Salaried
Photo Id Proof Yes Residence proof Yes One cancelled cheque in case of ECS Yes Credit program specific documents ( Any one of the following) Credit card front side photocopy Yes Visiting card & Employee Id proof Yes Photocopy of RC book (Not applicable for Yes vehicles ed after 2004 & commercial cars) Bajaj Finserv Lending existing loan repayment Yes Loan Number / Schedule (subject to not later than 18 months old) Any other Bank/NBFC repayment schedule Yes Latest salary slip Yes Banking details (latest 6 months) type - OD/ CC
of
age.
Self Employed Yes Yes Yes Yes Yes Yes
Yes Yes
Fees and Charges All you have to pay for availing of 0% interest Lifestyle Finance is a nominal processing fee depending on your loan amount as per the table hereunder: Loan amount
Processing fees
Between Rs.15001 and up to Rs.30,000*
Rs.599 to Rs.699
Rs.30,000 and above
Rs.699 to Rs.799*
27 | B a j a j F i n s e r v L e n d i n g
FINDINGS AND LIMITATIONS Findings Majority of of finance cases happen in the evening time between 6 PM to 10 PM. Number of on weekends is higher than other days of the week. Most finance is for the products ranging more than Rs. 10,000. Repeat sale for existing customers is increasing day by day hence this holds a great scope in future. Finance demand for products at their peak sale season is very high urging for special schemes for those categories at that time. Example – Air Coolers & AC‘s in summers and Washing Machines in Rainy Season. Customers are unclear about the documentation requirement which creates frustration among them leading to loss of sales. Heavy workload at the time of month end due to excess number of pending finance case files. Sudden change in finance scheme by manufactures arise and processing issue.
Limitations Verification process in case of IT products gets delayed very often. Potential customers unaware of the various schemes provided by Bajaj Finserv Lending. Initiative taken for the sale of Insurance Product (Group Suraksha Plan) is low among the Bajaj Executives. Negative Area list needs modification. Sales executive needs training of finance case filing. Sometimes credit documents are not as per approved credit program. Sales executive should make aware the customer about cross selling products at time of loan finance. Per finance case file base incentive system arise mishandling and improper eligibility documents 28 | B a j a j F i n s e r v L e n d i n g
SWOT ANALYSIS Strengths Monopoly player in the Consumer durable finance market. Insurance Product (Group Suraksha Plan) is an incredible product also providing cross sale. 0% finance facility. EMI Card provided for existing customer is one of a kind service. BFL has presence at all the major retail counters throughout the country. Strong network of executives with a responsible managerial hierarchy.
Weakness
Low Control on the Payment Default by customers. Concentration needed on cross selling. Lot of dependence on the Online System. Customer Service and handling needs improvement.
Opportunities
Market has a lot of growth opportunities. Consumer Finance being an untapped market holds great scope. Use the market as a good platform for cross selling. Create a brand identity of its own, strengthening the brand Bajaj. Opportunities in Rural market. Opportunities available to reach the top position amongst the Finance Companies and establish itself internationally. 29 | B a j a j F i n s e r v L e n d i n g
Threats
New competitors entering the market with similar offerings. (HDFC, Shriram). There is always a threat of Losses due to payment defaults in such business.
30 | B a j a j F i n s e r v L e n d i n g
SUGGESTIONS & RECOMMENDATIONS
Management must encourage Executives to concentrate more on Cross Selling. Finance schemes for strong seasonal sale products should be introduced. A promotional campaign must be run clarifying the benefits and offerings of BFL which will clear the doubts about 0 % finance & 0 processing fees. Regular training should be provided to sales executive to avoid mistakes There should be provision to cross check for the sale of cross selling products. Processing fees should not be charged from the EMI card holders in the case of Consumer Durables as it will create loyalty among customers and will help build a strong customer base even before the competitors entering the market. A single agency must be hired for the verification purpose for the entire BFL to improve the uniformity of the process. Also, there is a great need of proper control over the verification process to reduce the lag time in verification.
31 | B a j a j F i n s e r v L e n d i n g
CONCLUSION
Bajaj Finserv Lending is largest consumer durable loan finance company. It changed the buying pattern of consumer durables in India. It also helps consumer durable manufacturer for their high stock turnover ratio. It also changed the lifestyle of people of India who can fulfill their requirement and provide them 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.
Consumer Finance market being an untapped one in India holds a great scope for progress and market capture and BFL has been exceptional in that till date.
32 | B a j a j F i n s e r v L e n d i n g
BIBLIOGRAPHY
Annual Report – Bajaj Finserv Lending.
Quarterly report of Bajaj Finserv Lending
Websites http://www.bajajfinservlending.in http://www.bajajfinserv.in
33 | B a j a j F i n s e r v L e n d i n g
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