A Study on the role ofBajaj Finserv in Consumer Durable

Finance and the customer perception towards Bajaj Finserv

In partial fulfilment of the Dissertation

In Semester - IV of the Master of Business Administration

Prepared by
Arjun N
Registration No:
14010121012

Under the Guidance of Prof. Ray Titus

Bangalore

Master of Business Administration

Declaration

This is to declare that the report entitled A Study on the role of Bajaj Finserv in
Consumer Durable Finance and the customer perception towards Bajaj Finserv is
prepared for the partial fulfilment of the Dissertation course in Semester IV of the Master of
Business Administration by me under the guidance of Prof. Ray Titus
I confirm that this dissertation truly represents my work. This work is not a replication of
work done previously by any other person. I also confirm that the contents of the report and
the views contained therein have been discussed and deliberated with the Faculty Guide.

Signature of the Student

Name of the Student (in Capital Letters)

: Arjun N

Registration No

: 14010121012

Master of Business Administration

Certificate

This is to certify that Mr. Arjun N Regn. No.14010121012 has completed the dissertation
titled A Study on the role of Bajaj Finserv in Consumer Durable Financeand the
customer perception towards Bajaj Finservunder my guidance for the partial fulfilment
of the Dissertation course in Semester IV of the Master of Business Administration.

Signature of Faculty Guide:

Name of the Faculty Guide:Prof. Ray Titus

Table of Contents
No. Chapter Name
Nos.

Page

1.

Executive summary----------------------------------------------------------------------

5-6

2.

Introduction-------------------------------------------------------------------------------

7-32

3.
36

Literature Review ----------------------------------------------------------------------

4.

Research Methodology----------------------------------------------------------------

5.

Data Analysis-----------------------------------------------------------------------------

33-

37-40

41-52

6.
54

Findings------------------------------------------------------------------------------------

53-

7.
56

Recommendation-----------------------------------------------------------------------

54-

8.
58

Conclusion-------------------------------------------------------------------------------

57-

9.
60

References---------------------------------------------------------------------------------

59-

10.
64

Annexure ---------------------------------------------------------------------------------

61-

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

I as a sales manager of Bajaj finserv wanted to study or to understand more about the
customer perception towards Bajaj and to study the role of consumer durable finance in Bajaj
finance, for this reason I have opted this topic.

In precise I handle relationships of three LFR(large format retails),i.e. E Zone,Metro, ABRL

of Bangalore location,so in all these stores they give consumer durable finance.so in my
report I have explained how well the structures and procedures of finance business work and
how we handle relationship with our partners and how customers get benefit out of it. It was
like a real time experience for me and it can be called as empirical research. and also how
consumer durable finance is gearing up and moving towards one of the most profitable
business of bajaj finance.

Second part was to understand the customer perception towards Bajaj,for this I have opted
primary data and prepared a questionnaire and circulated it online and circulated to allmy
dealers portal where in customers can fill the questionnaire online.

The data which I got was pretty descent from the companies point of view, but still I feel
there is a large scope to develop and improve our business and to make people aware and
infact educate them about our core 0% interest finance.

At Bajaj Finserv, we operate with a simple philosophy of never settling for

good, and always aiming for great.

INTRODUCTION

INTRODUCTION
Financial services can be defined as the products and services offered by institutions like
banks of various kinds for the facilitation of various financial transactions and other related
activities in the world of finance like loans, insurance, credit cards, investment opportunities
and money management as well as providing information on the stock market and other
issues like market trends.
It refersto services provided by the finance industry. The finance industry encompasses a
broad range of organizations that deal with the management of money. Among these
organizations are banks, credit card companies, insurance companies, consumer finance
companies, stock brokerages, investment funds and some government sponsored enterprises.

Types of Financial services

Commercial banking services
A commercial bank is a financial institution that provides services, such as accepting
deposits, giving business loans and auto loans, mortgage lending, and basic investment
products like savings accounts and certificates of deposit..A "commercial bank" is what is
commonly referred to as simply a bank. The term "commercial" is used to distinguish it from
an "investment bank," a type of financial services entity which, instead of lending money
directly to a business, helps businesses raise money from other firms in the form
of bonds (debt) or stock (equity).

Investment banking services

Capital markets services - underwriting debt and equity, assist company deals (advisory
services, underwriting, mergers and acquisitions and advisory fees), and restructure debt
into structured finance products.
Private banking- provides banking services exclusively to high net-worth individuals. Many
financial services firms require a person or family to have a certain minimum net worth to
qualify for private banking services. Private banks often provide more personal services, such
as wealth management and tax planning, than normal retail banks.
8

Brokerage services - facilitating the buying and selling of financial securities between a buyer
and a seller.
Insurance services
Insurance underwriting - Insurance underwriters evaluate the risk and exposures of potential
clients. They decide how much coverage the client should receive, how much they should pay
for it, or whether even to accept the risk and insure them Activities include insurance
and annuities,

life,

retirement

insurance, health

insurance,

and property

insurance and casualty insurance.

F&I - Finance & Insurance, a service still offered primarily at asset dealerships. The F&I
manager encompasses the financing and insuring of the asset which is sold by the dealer. F&I
is often called "the second gross" in dealerships who have adopted the model.

Other financial services

Intermediation or advisory services - Advisory management services allow private
individuals to consult with investment professionals before making changes to their
portfolios. These services involve stock brokers (private client services) and discount brokers.
Stock brokers assist investors in buying or selling shares. Primarily internet-based companies
are often referred to as discount brokerages, although many now have branch offices to assist
clients. These brokerages primarily target individual investors.

Venture capital- a type of private equity, a form of financing that is provided to small,
early-stage, emerging firms that are deemed to have high growth potential, or which have
demonstrated high growth.

Angel investment - An angel investor or angel (known as a business angel or informal

investor in Europe), is an affluent individual who provides capital for a business start-up,
usually in exchange for convertible debt or ownership equity. A small but increasing
number of angel investors organize themselves into angel groups or angel networks to
share resources and pool their investment capital.

Conglomerates - A financial services company, such as a universal bank, that is active

in more than one sector of the financial services market e.g. life insurance, general
insurance, health insurance, asset management, retail banking, wholesale banking,
investment banking, etc.

Global Scenario
The financial sector is in a process of rapid transformation. Reforms are continuing globally
as part of the overall structural reforms aimed at improving the productivity and efficiency of
the economy in the highly competitive world. The role of an integrated financial
infrastructure is to stimulate and sustain economic growth.
The US$ 28 billion Indian financial sector has grown at around 15 per cent and has displayed
stability for the last several years, even when other markets in the Asian region were facing a
crisis. This stability has come through the resilience that the In-country system and the
finance companies have built over these years. The financial sector has kept pace with the
growing needs of corporate and other borrowers. Banks, capital market participants and
insurers have developed a wide range of
Products and services to suit varied customer requirements.

Banks
The Indian banking system has a large geographic and functional coverage. Presently the
total asset size of the Indian banking sector is US$ 270 billion while the total deposits amount
to US$ 220billion with a branch network exceeding 66,000 branches across the country.
Revenues of the banking sector have grown at 6 per cent CAGR over the past few years to
reach a size of US$ 15 billion. While commercial banks cater to short and medium term
financing requirements, national level and state level financial institutions meet longer-term
requirements. Banking today has transformed into a technology intensive and customer
friendly model with a focus on convenience. The sector is set to witness the emergence of
financial supermarkets in the form of universal banks providing a suite of services from retail
to corporate banking and industrial lending to investment banking. While corporate banking
is clearly the largest segment, personal financial services is the highest growth segment.

10

Capital Market
The Indian capital markets have witnessed a transformation over the last decade. India is now
placed among the mature markets of the world. Key progressive initiatives taken by the
Indian market institutions has been the depository and share dematerialization systems that
have enhanced the efficiency of the transaction cycle, Replacing the flexible, but often
exploited, forward trading mechanism with rolling settlement, to bring about transparency,
Corporatisation of stock exchanges etc. Indian capital markets have rewarded Foreign
Institutional Investors (FIIs) with attractive valuations and increasing returns. Many new
instruments have been introduced in the markets, including index futures, index options,
derivatives and options and futures in select stocks.
Insurance
With the opening of the market, foreign and private Indian players are keen to convert
untapped market potential into opportunities by providing tailor-made
products:
The presence of a host of new players in the sector has resulted in a shift in approach and the
launch of innovative products, services and value-added benefits. Foreign majors have
entered the country and announced joint ventures in both life and non-life areas. Major
foreign players include New York Life, Aviva, Tokio Marine, Allianz, Standard Life,
Lombard General, AIG, AMP and Sun Life among others.
The markets potential has been estimated to have a premium income of US$ 80 billion with
a potential size of over 300 million people.
Venture Capital
Technology and knowledge have been and continue to drive the global economy. Given the
inherent strength by way of its human capital, technical skills, cost competitive workforce,
research and entrepreneurship, India is positioned for rapid economic growth in a sustainable
manner. The Indian venture capital sector has been active despite facing a challenging
external environment in last decade and a competitive market scenario.
11

According to a survey conducted by Thomson Financial and Prime Database, India ranked as
the third most active venture capital market in Asia Pacific at the start of 20th century.
There is an increased interest in India. The amount has grown nearly twenty fold in the past
five years. Today the VC funds that operate in India with the total assets under management
are nearly worth about US$ 6 billion. Most VCs believe that this decade will be driven by a
relatively stable economy and new initiatives that will boost the e-commerce sector,
particularly on-line trading and E-banking sectors. To realise the potential, there is a need for
risk finance and venture capital (VC) funding to leverage innovation, promote technology
and harness knowledge based ideas.

Indian Scenario
India has a diversified financial sector undergoing rapid expansion, both in terms of strong
growth of existing financial services firms and new entities entering the market. The sector
comprises commercial banks, insurance companies, non-banking financial companies, cooperatives, pension funds, mutual funds and other smaller financial entities. The banking
regulator has allowed new entities such as payments banks to be created recently thereby
adding to the types of entities operating in the sector. However, the financial sector in India is
predominantly a banking sector with commercial banks accounting for more than 64 per cent
of the total assets held by the financial system.
The Government of India has introduced several reforms to liberalise, regulate and enhance
this industry. The Government and Reserve Bank of India (RBI) have taken various measures
to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs).
These measures include launching Credit Guarantee Fund Scheme for Micro and Small
Enterprises, issuing guideline to banks regarding collateral requirements and setting up a
Micro Units Development and Refinance Agency (MUDRA). With a combined push by both
government and private sector, India is undoubtedly one of the world's most vibrant capital
markets.

12

Market Size
Total outstanding credit by scheduled commercial banks of India stood at US$ 1.06 trillion.
The Association of Mutual Funds in India (AMFI) data show that assets of the mutual fund
industry have reached a size of Rs 12.62 trillion (US$ 185 billion).
During April 2015 to February 2016 period, the life insurance industry recorded a new
premium income of Rs 1.072 trillion (US$ 15.75 billion), indicating a growth rate of 18.3 per
cent. The general insurance industry recorded a 14.1 per cent growth in Gross Direct
Premium underwritten in FY2016 up to the month of February 2016 at Rs 864.2 billion (US$
12.7 billion).
Indias life insurance sector is the biggest in the world with about 360 million policies, which
are expected to increase at a Compounded Annual Growth Rate (CAGR) of 12-15 per cent
over the next five years. The insurance industry is planning to hike penetration levels to five
per cent by 2020, and could top the US$ 1 trillion mark in the next seven years. The total
market size of India's insurance sector is projected to touch US$ 350-400 billion by 2020.
India is the fifteenth largest insurance market in the world in terms of premium volume, and
has the potential to grow exponentially in the coming years. Life insurance penetration in
India is just 3.9 per cent of GDP, more than doubled from 2000. A fast growing economy,
rising income levels and improving life expectancy rates are some of the many favourable
factors that are likely to boost growth in the sector in the coming years.
Investment corpus in Indias pension sector is expected to cross US$ 1 trillion by 2025,
following the passage of the Pension Fund Regulatory and Development Authority (PFRDA)
Act 2013.
Investments/Developments

Thomas Cook India, an integrated travel and travel related financial services
company, has entered into a partnership with Western Union Business Solutions, with
a view to assist Small and Medium-sized Enterprises (SMEs) in India with their trade
payments across borders.

Kotak Mahindra Bank Limited has bought 19.9 per cent stake in Airtel M Commerce
Services Limited (AMSL) for Rs 98.38 crore (US$ 14.43 million) to set up a
13

payments bank. AMSL provides semi-closed prepaid instrument and offers services
under the Airtel Money brand name.

BankBazaar.com, an online financial services marketplace operated by A&A Dukaan

Financial Services Private Limited, has initiated its international business expansion
plan by starting a wholly owned subsidiary in Singapore, to tap into mortgages and
credit cards market in Singapore and other Asian markets, thus expanding the
business potential for the company.

Tata Capital, the financial services arm of Tata Group, plans to raise Rs 2,000 crore
(US$ 293.4 million) for its real estate fund, from State General Reserve Fund (SGRF),
the sovereign wealth fund of Oman.

Ujjivan Financial Services Ltd, a microfinance services company, has raised Rs 312.4
crore (US$ 45.84 million) in a private placement from 33 domestic investors
including mutual funds, insurance firms, family offices and High Net Worth
Individuals (HNIs), ahead of its planned Initial Public Offering (IPO).

Insurance firm AIA Group Ltd has decided to increase its stake in Tata AIA Life
Insurance Co Ltd, a joint venture owned by Tata Sons Ltd and AIA Group from 26 per
cent to 49 per cent.

Canada-based Sun Life Financial Inc plans to increase its stake from 26 per cent to 49
per cent in Birla Sun Life Insurance Co Ltd, a joint venture with Aditya Birla Nuvo
Ltd, through buying of shares worth Rs 1,664 crore (US$ 244.14 million).

Nippon Life Insurance, Japans second largest life insurance company, has signed
definitive agreements to invest Rs 2,265 crore (US$ 332.32 million) in order to
increase its stake in Reliance Life Insurance from 26 per cent to 49 per cent.

The Securities and Exchange Board of India (SEBI) plans to gradually introduce more
commodity products and allow more participants in the commodity derivatives market
in India.

The Reserve Bank of India (RBI) has granted in-principle licenses to 10 applicants to
open small finance banks, which will help expanding access to financial services in
rural and semi-urban areas, thereby giving fillip to Prime Minister's financial
inclusion initiative.

The Reserve Bank of India (RBI) has also given in-principle approval to 11 entities to
open payment banks which are expected to result in widening the reach of banking
services and thereby improve the extent of financial inclusion as envisaged by the
14

government. The setting up of 11 new payments banks can potentially free up Rs

1,400,000 crore (US$ 205.4 billion) per annum to fund the infrastructure sector, as per
a study by the State Bank of India.

A Reserve Bank of India (RBI) committee headed by Deputy Governor Mr Gandhi

has recommended granting commercial banking license to multi-state Urban
Cooperative Banks (UCB) having business of more than Rs 20,000 crore (US$ 2.93
billion).

Indias largest microfinance company Bandhan has set up Bandhan Bank Ltd, banking
and financial services company, post the receipt of license from RBI.

Government Initiatives
Several measures have been outlined in the Union Budget 2016-17 that aim at reviving and
accelerating investment which, inter alia, include fiscal consolidation with emphasis on
expenditure reforms and continuation of fiscal reforms with rationalization of tax structure.
The Union Budget 2016-17 has allowed foreign investment in the insurance and pension
sectors in the automatic route up to 49 per cent subject to the extant guidelines on Indian
management and control to be verified by the regulators.
Service tax on service of life insurance business provided by way of annuity under the
National Pension System regulated by Pension Fund Regulatory and Development Authority
(PFRDA) being exempted, with effect from April 01, 2016.
Capital gains tax exemptions have been extended to merger of different plans within a mutual
fund scheme, which is expected to benefit investors in case of merger of mutual fund
schemes.
The Government of India plans to revise and improve few of its flagship schemes such as the
Atal Pension Yojana (APY), aimed at providing pension coverage, and Pradhan Mantri
Mudra Yojana, which funds small entrepreneurs, in Union Budget 2016-17 in order to
increase the number of beneficiaries covered by these schemes and overcome shortcomings
in implementation.
The Government has also announced several schemes to improve the extent of financial
inclusion. The Prime Minister of India has launched the Micro Unit Development and
Refinance Agency (MUDRA) to fund and promote Microfinance Institutions (MFIs), which
would in turn provide loans to small and vulnerable sections of the business community.
15

Financial Services Secretary Mr Hasmukh Adhia has announced that the ministry will launch
a campaign for loans under Pradhan Mantri Mudra Yojana (PMMY) in order to double loan
disbursement to the small business sector to over Rs 100,000 crore (US$ 14.67 billion).
Government of Indias Jan Dhan initiative for financial inclusion is gaining momentum.
Under Pradhan Mantri Jan DhanYojna (PMJDY), 210 million accounts# have been opened
and 174.6 million RuPay debit cards have been issued. Government of India aims to extend
insurance, pension and credit facilities to those excluded from these benefits under the
Pradhan Mantri Jan Dhan Yojana (PMJDY). The Union Cabinet Minister has also approved
the Pradhan Mantri Suraksha Bima Yojana which will provide affordable personal accident
and life cover to a vast population.
The Union Cabinet has approved 100 per cent Foreign Direct Investment (FDI) under the
automatic route for non-bank entities that operate White Label Automated Teller Machine
(WLA), subject to certain conditions.
Minister of Finance Mr Arun Jaitley has formally declared the merger of Forward Markets
Commission (FMC) with Securities and Exchange Board of India (SEBI), which help
convergence of regulations in the commodities and equity derivatives markets.
The Insurance Regulatory and Development Authority of India (IRDA), as part of its
endeavour to increase insurance sector growth, has allowed a new distribution avenue called
the point of sale person, who will be allowed to sell simple standardised insurance products
in the non-life and health insurance segments, which are largely pre-underwritten.
Road Ahead
India is today one of the most vibrant global economies, on the back of robust banking and
insurance sectors. The country is projected to become the fifth largest banking sector globally
by 2020, as per a joint report by KPMG-Confederation of Indian Industry (CII). The report
also expects bank credit to grow at a Compound Annual Growth Rate (CAGR) of 17 per cent
in the medium term leading to better credit penetration. Life Insurance Council, the industry
body of life insurers in the country also projects a CAGR of 1215 per cent over the next few
years for the financial services segment.
Also, the relaxation of foreign investment rules has received a positive response from the
insurance sector, with many companies announcing plans to increase their stakes in joint
ventures with Indian companies. Over the coming quarters there could be a series of joint
venture deals between global insurance giants and local players. The relaxation in the foreign
16

direct investment (FDI) limit to 49 per cent can result in additional investments up to Rs
60,000 crore (US$8.81 billion).

Company overview
Company profileBajaj Finserv ltd
Industry- Finance- Investment/ Others
Business Group

Bajaj

Industry

Financial services

Type

Private Company

Founder

Jamanalal Bajaj

Incorporation year

2007

Incorporation date

30-Apr-07

Chairman

Rahul Bajaj

Managing director

Sanjiv Bajaj

Headquarters

Pune, Maharashtra, India

Products

Financial services, Wealth services, Insurance

Revenue

US $ 715 million

17

Parent

Bajaj Holdings and Investments Limited

Subsidiaries

Bajaj Allianz General Insurance, Bajaj Allianz Life insurance,

Bajaj Financial services Ltd

Website

www.bajajfinserv.in

18

Nature of the business

Bajaj Finserv, a part of Bajaj Holdings & Investments Limited, is an Indian financial
services company focused

on

lending,

asset

management, wealth

management and insurance[.The company through its joint ventures and subsidiaries employs
over 20,000 employees and has established a nationwide presence across over 1400 locations.
The company is currently engaged in consumer finance businesses, life insurance, and
general insurance and has plans to expand its business by offering a wide array of financial
products and services in India. Apart from financial services, Bajaj Finserv is also active in
windenergy generation.
Bajaj Finserv was formed in April 2007 as a result of its demerger from Bajaj Auto Limited
to further the Groups interests in financial services. This demerger enabled Bajaj Finserv to
independently run the core businesses of Lending, Insurance and Wealth Advisory. Bajaj
Finserv Limited is the holding company for the businesses dealing with financial services of
the Bajaj Group. Its insurance joint ventures with Allianz SE, Germany, namely Bajaj Allianz
Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited are
engaged in life and general insurance business respectively. Its subsidiary Bajaj Finance
Limited is a Non-Banking Finance Company engaged in consumer finance, SME finance and
commercial lending and wealth management. Bajaj Finserv services covers;
Finance
Bajaj Finance Limited is the consumer finance lending arm of Bajaj Finserv Limited. It is the
most diversified non-bank in the country and the largest financier of consumer durables in
India making it one of the most profitable firms in the category

19

Insurance
Bajaj Finserv Limited forayed into insurance through a joint venture with Allianz SE,
Germany, and formed Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz
General Insurance Company Limited.
Investment
Bajaj Finserv Wealth Management provides simple and effective long term financial planning
concepts and tools for assisting our customers in making informed decisions for their saving
and investment needs.

Products and services offered

For Salaried Category- Finance

Personal loan

Home loan

Durable loan finance

Lifestyle finance

Digital product finance

EMI card

Doctor loan

Loan against shares

Gold loan

Loan against fixed deposit

Two and three wheeler finance

Extended warranty

For Self-employed category- Finance

Business loan

Home loan

Doctor loan

Durable finance
20

Lifestyle finance

Digital product finance

Loan against shares

Loan against fixed deposits

Two and three wheeler finance

Gold loan

EMI card

Extended warranty

Loan against property

E-commerce seller finance

For Businesses- Finance

Home loan

Loan against shares

Business loan

Doctor loan

Loan against property

Lease rental financing

Vendor finance

Gold loan

Loan against fixed deposit

E-commerce seller finance

Competitors:
Capital First
Capital First is a provider of financial service across consumer and wholesale businesses,
with aspirations to grow into a significant financial conglomerate.

21

Capital First Ltd. is a systemically important NBFC with record of consistent growth &
profitability. Capital First has a comprehensive product suite to meet multiple financial needs
of customers including Consumer Lending, Corporate Lending. Capital First Limited is a
Non-Banking Finance holding company. The Company provides wholesale loans on a
selective basis to corporate customers, primarily to real estate developers. The Company
distributes life insurance products and general insurance products with insurance companies
in India. The Company also provides financing to retail consumers for the purchase of new
two-wheelers. It provides financing for digital appliances, white goods and home appliances.
It offers loans for digital appliances, such as laptops, tablets, smart phones and printers,
which are usually availed by micro-entrepreneurs and loans for home appliances, such as air
conditioners, refrigerators, washing machines and televisions, which are usually availed by
salaried consumers. Its subsidiaries include Capital First Investment Advisory Limited,
Capital First Commodities Limited, Anchor Investment & Trading Private Limited, Capital
First Home Finance Private Limited and Capital First Securities Limited.
Tata Capital
Tata Capital Financial Services Limited (TCFSL) is a subsidiary of Tata Capital Limited.
The company is registered with the Reserve Bank of India as a systemically important Non
Deposit Accepting Non Banking Financial Company (NBFC) and offers fund and fee-based
financial services to customers, under the Tata Capital brand.
A trusted and customer centric, one stop financial services provider, TCFSL caters to the
diverse needs of retail, corporate and institutional customers, across various areas of business
namely the commercial finance, Infrastructure finance, Wealth management, Consumer loans,
distribution and marketing of Tata cards. Tata Capital has over 100 branches spanning all
critical markets in India. TCFSL offers Car loans, Two wheeler loans, Personal loans, Loan
against property, Consumer durable loans, Loan against securities, Wealth products
distribution, Investment advisory services, Commercial Finance, Infrastructure Finance.

22

23

24

25

26

27

Flow chart of the loan application process

28

Existing practices of the organization:

The loan approval process of the organization takes less than 4 minutes. The loan amount
sanctioned and the programs under which each customer falls are listed below
1. WOW
2. CREDIT CARD
2.1.1.1.

SILVER -25K

2.1.1.2.

GOLD-50K

2.1.1.3.

PLATINUM, TITANIUM, VISA SIGNATURE, DINER , AMERICAN

EXPRESS- 100K-125K
3. LISTED COMPANY(GOVERNMENT EMPLOYEE AND LISTED COMPANY)
3.1.1.1.

JUNIOR LEVEL-25K

3.1.1.2.

MIDDLE LEVEL-50K

3.1.1.3.

SENIOR LEVEL-100K

4. RC SURROGATE( 4 WHEELER PRIVATE)

5.

4.1.1.1.

LOWER-30K

4.1.1.2.

MIDDLE-50K

4.1.1.3.

UPPER-100K

EXISTING CUSTOMER:50K -70K

6. CIBIL SCORE
6.1.1.1.

<700 REJECTED

6.1.1.2.

>700 BUT <800 - 50 K

6.1.1.3.

>800-100K

7. SALARIED EMPLOYEE
7.1.1.1.

15000-25000 : 25K

7.1.1.2.

25000-50000: 50K

7.1.1.3.

ABOVE 50000 : 60K

8. INSTANT : 35K

29

9. DEBIT CARD
9.1.1.1.

NORMAL: 15K

9.1.1.2.

SALARIED: 35K

10. EMI CARD: UPTO 1 LAKH

11. WOW LITE: 15K -35K
12. WOW EXTENSION: 50K-75K
13. WOW PLUS:125K-325K

30

31

REVIEW OF LITERATURELITERATURE REVIEW

The service economy continues to be the silver lining in an economic environment riddled
with volatility and uncertainty.
Today, 0% finance holds an over 11% share in the total consumer durables industry. Out of
the total sales of over INR 36850 Cr annually, over 4053 Crore are bought on 0% interest
finance. While the industry is growing at 9% YOY, 0% interest finance is growing at 13 times
as much with over 118% growth YOY. In turn, Bajaj Finserv Lending continues to be the
largest driver of this growth with over 9% share and growing at 88% YOY. This puts Bajaj
Finserv Lending in a clear leadership position.
Today, one out of every 5 flat panel TVs is bought on the 0% interest consumer durables
loans option from Bajaj Finserv Lending. This growth has come at the back of significant
investments made in distribution, technology and process automation. They have invested
deep in technology and process innovations to create long term sustainable advantages. This
has allowed them to create win-win propositions for all members in the ecosystem. Available
at over 4,000 outlets across the country across metros, tier 2&3 cities.
Bajaj Finserv Lending 0% interest consumer durables loans are available in places where
other finance options like credit cards may have low penetration. Even where other finance
options are available, Bajaj Finserv Lending 0% interest option offers a far better experience.
All a customer needs to do is to walk into any of the consumer durables stores in the country,
choose the desired product, and approach the in-store Bajaj Finserv Lending representative.
Within a few minutes, the person gets an approval on the loan. The customer pays the defined
down payment for the selected product and the remaining amount, is divided into equal
monthly installments.
The customer can also choose from a range of loan tenors, ranging from 12 to 18 months.
This brings down the cost of ownership and also helps the customer trade up. For example, if
a person had a budget of 40,000, in case of a cash- down option, he would have managed to
get a 32inch LED. With 0% interest consumer durable loan, he can now trade up to a 46 inch
LED and bridge the gap with the 0% interest consumer durable loan. In the case, he may
choose to pay down an even lesser amount than 40,000 as the down payment and keep the
32

rest as his savings. They have developed credit policies and created partnerships to ensure the
customer goes through a simple, hassle-free and quick process. Their technology platforms
allow them to approve loans in as low as 3 minutes while he is in the shop, selecting his
favorite product. For the customer, this life-event should be about buying his aspirational
device without having to worry about the money he may need.
The company has gone a step further and introduced an innovative offering through the EMI
card. Available only for existing 0% interest consumer durable loans customers, the EMI card
allows an existing customer to go to any of the Bajaj Finserv Lending affiliated stores and
pay for his next consumer durable purchase with a simple swipe of the EMI card. The
customer already has a pre-assigned loan line on his account that is determined through the
internal policy framework and past behavior on his previous loan. EMI card is a proof point
of how their approach innovation and internal policy framework has created compelling long
term brand propositions for customers. Bajaj Finserv Lending launches Extended Warranty
with its 0% interest Consumer Durables Finance Another innovation from Bajaj Finserv
Lending, Extended Warranty will provide additional 1 year coverage for products after the
expiry of the manufacturer warranty period .Extended Warranty launch is an affirmation of
the company's active pursuit of innovations and commitment to continuously enhancing the
value bundle.
Product maintenance post the manufacturer's warranty is a challenge faced by the
consumers. Bajaj Finserv Lending envisages a huge scope in Extended Warranty as an
opportunity to further consolidate long term customer relationship even after the financing
tenure concludes. "Extended Warranty is a proof of their commitment to continuously
enhancing the role in customers life, beyond just being another financier. Extended Warranty
will provide complete protection of the cost towards repair and replacement of the consumer
durable appliances arising out of unexpected defects in material or workmanship, post the
expiry of manufacturer's product warranty period.

33

The existing Extended Warranty market in India is completely unorganized, with some
retailers offering it with lots of terms and conditions. Bajaj Finserv Lending, which holds
over 80% share of the consumer durables installment finance segment, has tied up with
another Bajaj Finserv Group company, Bajaj Allianz General Insurance Company Ltd., to
offer Extended Warranty for consumer durable appliances on Group Platform basis The offer
is available for the customers who are already availing the 0% finance services from Bajaj
Finserv Lending. The 12 month policy period of the Extended Warranty plan will commence
after the expiry of manufacturer's product warranty period. Bajaj Finserv Lending plans to
leverage on its established network of 0% interest Consumer Durable Loans with presence
across over 80 cities. Extended Warranty plan from Bajaj Finserv Lending would cover the
range of consumer durable appliances available through the 0% interest consumer durable
finance from the company.
Objectives

This project will primarily focus on Modus Operandi of Bajaj Finance for Finance of
Consumer Durable products. This will require a fist hand experience in understanding
end to end process flow for loans processing to payment disbursement and coming
with Suggestions to make experience more Delightful for customers and channel
partners.

Focus on way of operations at 2 types of Outlets: Owner Driven and LFRs and Bajaj
Finances SWOT analysis at both these outlets. Competitors working (CC or Capital
First), Reliance Capital Ltd viz a viz BFL and stress areas will have to focused along
with.

To study the loan procedure for consumer durable products at bajaj finserv with the
help of case studies.

To understand the surrogates of Bajaj finserv.

To understand the customer perception towards Bajaj finance.

34

RESEARCH METHODOLOGY

35

Research Methodology
The project methodology started with understanding few concepts and terminologies related
to Bajaj finance sector. The project would include data collected from consumers which.As
per the objectives of the study ,appropriate tools like pie charts, bar diagram etc. are used to
analyze the data. This would help in arriving at a better representation of the reach of my
objectives.

Research Design:
This research is mainly of primary type with field study as it is designed to identify and
scrutinize the consumer perception towards Bajaj finance and thus associate them with the
various influencing factors of the respondents. Apart from that secondary data sources have
also been used to assist the research with the help of real time experience,journals, articles,
web and books in order to compare and make a contrast study with present scenario

Data collection methods & sources:

A sample size of 50 was drawn from the population. The sample included students,
employees, and businessmen. The data has been collectedfrom store online portals where
customers have filled the questionnaire and by administering the data though social
networking sites like ,Facebook, and using WhatsApp and other possible ways by which I
can send my questionnaire freely through the internet.
In this process I have submitted a well-structured questionnaire to the respondent by meeting
them personally The sampling technique that has been used to draw the sample is
convenience sampling due to lack of time and resources.

Sampling techniques:

36

Sampling is simply the process of learning about the population on the basis of a sample.
Thus in sampling techniques instead of every unit of the universe only a part of the universe
is studied and conclusions are drawn on the basis for the entire universe.
A sample is a sub set of population units.
A sample size of 50 was drawn from the population of India, Bangalore precisely. The sample
included students, employees, and businessmen.
Most of the respondents were active users of online shopping that were chosen for this
particular research. The sampling technique that has been used to draw the sample is
convenience sampling due to lack of time and resources.
My sample size is 50.I have collected data from store online portals where customers have
filled the questionnaire and by administering the data though social networking sites like
,Facebook, and using WhatsApp and other possible ways by which I can send my
questionnaire freely through the internet.
Sample Size:

My sample size is 50 have collected data from store online portals where customers have
filled the questionnaire and by administering the data though social networking sites like
Facebook, using whatsapp and other possible ways by which I can send my questionnaire
freely through the internet.

Type
Consumer

Number
50

Table: Sample size

37

Tools of analysis:
The tools that have been used for the study is Microsoft Excel. It has been used to organize
the data and also create charts and graphs for analysis, and I used pie chart, bar diagram etc.
tools for analysis purpose.

38

OBSERVATION AND ANALYSIS

39

Observation & Data Analysis

40

Have you ever applied for any Bajaj finance loan?

NO

YES

10

20

30

40

50

60

70

Interpretation:

41

60% of people have applied for bajaj finance loan and 40% have not applied.
This means still there is lot of potential to target that untapped market and drive our
business more rigourously in an efficient manner.
May be those 40% people are aware about our business but they might be feeling not so
comfortable in taking loans, as many feel its risky.
So we have to change this perception and educate people that its hazzle free and it can
be processed with minimal documents.

if YES, the for which industry did you seek Finance/Loan in?
Home

Personal

Auto

10

20

30

40

50

60

70

Interpretation:
62% of people have opted for personal loan.
25% of people have opted for home loan.
13% of people have opted for auto loan.

42

By this we can say that personal loan is something which is the most high end product of
bajaj finance and they have that huge gap between auto and personal loan to fill up.

How would you rate your EXPERIENCE with it?

Very Good

Good

Neutral

Bad

Very Bad
0

10

20

30

40

50

60

Interpretation:

43

When it comes to experience with bajaj finance,50% say its very good,38% say its good
and 12% say its neutral.
It means still many people are not completely satisfied with our service or with our
product because of many reasons, so still there is lot of scope to improve and make
customers feel good about it.

Do you really think providing Finance for Consumer Durable products is any useful?

NO

YES

20

40

60

80

100

120

Interpretation:
So here 100% people say its useful to provide finance for consumer durable products,

44

this means these consumer durable products are very essential for our daily needs and
these are the products which we consume the most, so providing finance on these will be
really helpful for people, but still many people are not aware that they get finance for
consumer durable products, so we have to advertise it more and do more of promotional
activities and educate them about this.

45

How would you like to rate Bajaj Finance on a scale of 0-5(0 being the lowest & 5 Being the highest)
5

1
0

10

20

30

40

50

60

70

80

Interpretation:
67% of people rate bajaj finance in the top scale but the rest people have rated bajaj on
the various scales, many people might have faced n number of problems with bajaj, it
can be related to back-end or front-end, but still we as a company still have lot of scope
to improve and we still have to educate a lot of people on this. still many people doesnt
know that they can go out and shop without even paying a single penny.

What qualities you like the most in Bajaj Finance? (Multiple Choice
Others

Customer Service

Hassle Free

Easy & Instant Loan

Minimal Docs
0

10

20

30

40

50

60

70

46

Interpretation:
Since its a multiple choise question we have received multiple responses, so 66% of
people think easy and instant approval is bajajs top most quality, what would have
made them say is our 1 minute loan approval system which we have adopted in
consumer durable finance.
33% of people believe minimal documents is bajajs top quality, to justify this, now a
days only identity proof and address proof is enough to give the loan, these are the
documents which every consumer has.
22%people think its hassle free ,because they may feel its not as risky as other finance
companies ,where in they ask many documents and they take lot of time to process
,unlike bajaj finserv.
11% people think its the customer service which is the best in bajaj finserv.
So we still have to work on our front end customer service, where in we have create a
online portal for all the customer related queries and have a separate department for
customer service.

47

FINDING & RECOMMENDATIONS

Findings

We came to know that none of them have come to know about Bajaj finance through
retailer recommendation, this totally means retailers are not promoting us,but all they
need is business from us, so we should build more strong relationship with retailers.

Still there is lot of untapped market which we have to focus on by educating and make
48

people really understand our process.

Advertising and promotions has to be made more rigorously

Medical loans would be a possible initiative which can be implemented by Bajaj

Finserv under their financial products and services category

Customers prefer to have credit schemes on more consumer durable brands with zero
down payment

Introduce attractive credit schemes on various models in different product categories

which create high sales numbers ( Air conditioners, Refrigerator, Washing machine
etc)

Design attractive lending schemes for those who wish to buy durable goods without
finance

Reduce queue time during loan processing

Employ additional service executives during festival season

Customer complaints should be taken with utmost importance and try to solve
them within less time

49

Recommendations

Unawareness of customer about 0% finance scheme. Therefore, Bajaj should make its
customers aware about the new schemes.

Customer thinking that Bajaj will take some hidden charges from them, if they take
loan at 0% from Bajaj. This can be possible by removing wrong myth in the minds of
the customers. Therefore, Bajaj should promote them as a good brand.

Customers dont carry all the required documents all the time and some of them dont
want to come again. This happens mainly due to lack of proper information.

Bajaj should work on its HR part as I found it bit demotivating for the employees
when they dont receive their incentive when any file get blocked, they have to work
out any other way to deal with these situations.

The quality of hiring of support staff is not up to the mark as they fail to serve the
customer in absence of SE.

More scheme plan should be incorporated for non-Credit card user as they are more in
number and are more prospecting customer.

Bajaj Finserv initially have the system of swiping of EMI card but due to some
50

difficulty they stopped it, I think Bajaj should work upon this as this can save more
time for customer as well as for SE and he can serve more non-EMI card user and
convert them into EMI card holder.

Conclusion
Lot of aspects has to be focused in a right way, educating people about our finance is the first
way to do that, this entire study focuses on the customer perception towards our Bajaj finserv
and role of consumer durable in Bajaj finserv, so if you see the customer side still lot of
improvements has to be made in Bajaj because the customer expectations are very high,even
though they have the good amount of market share in finance sector especially in consumer
durable sector but still adaptation and improvisation is must.
In this lending business the executives who sit in the store are like backbone for the company
because they are the one who give loan to people,I as a sales manager of Bajaj finserv has to
maintain that personal touch with them,infact guide them and motivate them to drive the
sales, and still there is lot of untapped market in which our existence is not there and people
are not aware, so we still have to expand and get recognized by lot many people.

51

References
Bajaj Finserv's Q1 consolidated net profit rises 14%" Business Standard.

http://www.moneycontrol.com/financials/bseconsumerdurables/ratios/BSE08
http://www.business-standard.com/article/companies/bajaj-finserv-s-q1-consolidatednet-profit-rises-14-114071600994_1.html
http://www.finalaya.com/News/Bajaj-Finserv-reports-15-rise-in-Q1-consolidated-netprofit-N331349.aspx

http://economictimes.indiatimes.com/reliance-capitalltd/stocks/companyid

52

Annexure

53

54

55

56

Swot Analysis Of Bajaj Finserv In Large Format Retails And Owner Driven Firms

57

argins getting squeezed

fromand
both
the directions(Prcie
well
as cost)
One sales executive so
The growing
improvised
schemes inas
the
market
reat of other financial
lenders
like
future
finance
etc.
More
strict policy than
Growing demand for 0% financial schemes especially in emerging
markets

58