Professional Documents
Culture Documents
A REPORT
By
7 July 2014
ACKNOWLEDGEMENT
I would take this opportunity to express my sincere gratitude to everyone who was involved
directly or indirectly, for their valuable assistance and guidance during my Summer Internship
Program.
I would like to thank Mr. Sanjit Dawar (Head - Business Loans & Consumer Durable Loans,
LAS Finance) and Mr. Nishant Jasapara (National Sales Manager - LAS & Consumer Durable
Loan) for putting their trust in me and giving me an opportunity to work in Consumer finance at
Tata Capital Ltd. I am thankful to them for their continuous support in grooming my skills set
and preparing me for the corporate world.
I am grateful to Mr. Shobhit Tyagi (Territory Sales Manager, CD-loans,Delhi) for his teachings
and constant encouragement from the beginning of my project. His continuous support and
guidance helped to overcome many obstacles at work.
I would also like to thank Prof. Umashankar Venkatesh, Faculty, IMI Delhi for his continuous
guidance and motivation which helped me to relate my work here with the concepts and also to
complete my project timely and in systematic manner.
I would also like to thank my entire team of Customer Representatives, as all of us have together
worked towards the common organizational objective, shared our experiences and aided each
other in times of need.
Saurabh Khurana
EXECUTIVE SUMMARY
Tata Capital Ltd (TCL) is a finance company that fulfills the financial needs of retail and
institutional customers in India. It was established in 2007 as a wholly owned subsidiary of Tata
Sons and is registered with the Reserve Bank of India as a systemically important non-deposit
taking non-banking financial company (NBFC). TCL has multiple subsidiaries and my project is
in Consumer Durable Loans which falls under Consumer Finance and Advisory Business
(CFAB) unit of Tata Capital Financial Services Ltd (TCFSL) .
The objective of the study is to gain understanding of the Consumer Durable Loans market in
Delhi and work closely with the sales team to achieve the sales targets set by the company
thereby getting hands on experience in selling financial products. It includes gaining an
understanding of all the nuances related with every single step of CD Loan cycle, developing an
understanding of the issues faced by different stakeholders i.e. customers, CREs and the back
office operations team. The key deliverable is to help the company capitalize on the seasonal
opportunity of the summer season by maximizing sales on the allocated stores and ensuring that
the amount sourced is disbursed timely.
Initial two weeks of the internship were spent in understanding the policies, KYC (Know Your
Customer) documents and the processes of Consumer Durable Loan cycle. For the last six weeks
I was working a-kin to a Team Leader and handling the sales team at 5 croma stores across
Delhi-NCR. The prominent responsibilities are to ensure that the target assigned to each store is
met, the Loan files reach the regional branch on time with complete documentation, the files get
processed and disbursed on time and the Customer representative follows all the policies and
procedures to minimize default.
The methodology used to achieve these objectives involves personal interactions with various
managers, team leaders, CREs (Customer Relationship Executives) and manning the counters at
various stores to understand the process thoroughly. It also included observing the complete
back-end operations to understand the end to end process.
The target achievement was more than 100% for the month of April and May. The disbursed
amount for the loans allocated to 5 stores grew at 39% from March to May. The delinquency
levels were less than the stipulated provisions.
I have carried out a research to map the perception and satisfaction of the Croma sale
representatives for TCFSL and the competing brand Bajaj Finserv, thereby finding the areas of
improvement. It was revealed that TCFSL needs to improve upon its Loan Origination System,
incentives for Croma employees and have lenient documentation requirements as compared to
present requirements.
TABLE OF CONTENTS
CERTIFICATE OF APPROVAL FOR SIP 2
ACKNOWLEDGEMENT 3
EXECUTIVE SUMMARY 4
LIST OF FIGURES 8
LIST OF TABLES 9
LIST OF ABBREVIATIONS 10
LIST OF APPENDICES 11
1 INTRODUCTION 12
1.1 COMPANY INTRODUCTION 12
1.1.1 ORGANISATIONAL STRUCTURE 12
1.1.2 TCL’S OFFERINGS 13
1.1.3 TUSHMAN AND NADLER CONGRUENCE MODEL ANALYSIS 15
1.1.4 SWOT ANALYSIS OF TCL 18
1.2 LITERATURE REVIEW 20
1.2.1 CONSUMER DURABLE INDUSTRY IN INDIA 20
1.2.2 CONSUMER DURABLE LOANS 23
1.2.3 STAKEHOLDERS’ BENEFITS 24
1.2.4 MAJOR PLAYERS 24
1.2.5 MICHAEL PORTER’S STRUCTURAL ANALYSIS OF CONSUMER DURABLE LOAN INDUSTRY 25
1.3 TCFSL CONSUMER DURABLE LOANS 27
1.3.1 LOCATIONS 27
1.3.2 ELIGIBILITY CRITERIA 27
1.3.3 DOCUMENTS REQUIRED 28
1.3.4 SOURCING SURROGATES 28
1.3.5 TCFSL CD LOAN MARKET IN DELHI 29
1.4 RATIONALE OF RESEARCH 30
1.5 RESEARCH OBJECTIVES 30
1.6 RESEARCH QUESTIONS 31
2 IMPLEMENTATION METHODOLOGY 32
2.1 INITIAL UNDERSTANDING OF THE INDUSTRY, POLICIES AND PROCESSES 32
LIST OF FIGURES
Fig. No. Description Page No.
1 TCL’S Organizational Structure 12
2 Size of the Indian Consumer Durables Industry 20
3 Shares of Global Middle Class Consumption,2020-2050 21
4 India’s Median Age vis-à-vis other countries 22
5 Growth of Disbursal amount over last 3 months 29
6 Implementation Methodology 32
7 Growth of Point of Sales of BFL over last 4 years 41
8 Loan Processing Cycle 42
9 Value of various parameter’s on which the CRE was judged 43
10 Satisfaction level of Croma employees with CREs 44
11 Inclination of Croma Employees to recommend TCFSL loan to customer 46
LIST OF TABLES
Table No. Description Page No.
1 TCL’s offerings 13
2 Eligibility Criteria for Consumer Durable Loans 27
3 Store wise target for the month of April 38
4 Store wise target for the month of May 39
5 Store wise delinquency number for last 8 months 39
6 Penetration of TCFSL vis-à-vis BFL 42
7 Mean Value of various parameter’s on which the CRE was judged 43
8 Comparison of TCFSL vs BFL on various parameters 44
LIST OF ABBREVIATIONS
Abbreviation Definition
TCL Tata Capital Ltd
TCFSL Tata Capital Financial Services Ltd
BFL Bajaj FinServ Lending
LOS Loan Origination System
CRE Customer Representative
KYC Know Your Customer
NBFC Non Banking Financial Corporation
RBI Reserve Bank Of India
SWOT Strengths, Weaknesses, Opportunities and Threats
CFAB Consumer Finance and Advisory Business
FY Financial Year
CAGR Compounded Annual Growth Rate
CD Consumer Durable
EMI Card Existing Member Identification Card
LIST OF APPENDICES
S. No. Description Page No.
1 Questionnaire 51
1 INTRODUCTION
1. Commercial Finance
The Commercial Finance business helps small, medium and large corporate grow their business.
The range of offerings includes Term Loans, Working Capital Loans, Channel Finance,
Equipment Finance, Lease Rental Discounting, Bill Discounting, Letter of Credit and Bank
Guarantee. These services are offered through Tata Capital Financial Services Limited.
2. Investment Banking
The Investment banking business provides a range of services, including equity capital markets
transaction execution, underwriting, mergers, and acquisitions advisory, structured finance
advisory, private equity advisory and infrastructure advisory. These services are offered through
Tata Securities Limited.
3. Private Equity
Tata Capital acts as an Investment Manager to Private Equity Funds which identify and invest
into target companies with significant growth potential.
4. Infrastructure Finance
The Infrastructure Finance business provides a range of services including Equipment Finance,
Project Finance, Equipment Rentals, Working Capital Loans, Bill Discounting/ Factoring,
Refinance, Top Up Loans and Loan Syndication. These services are offered through Tata Capital
Financial Services Limited.
5. Securities
Securities business offers both institutional and retail clients, products and services like Equity
Trading, IPOs, Financial Planning and Mutual Funds. These services are offered through Tata
Securities Limited.
6. Wealth Management
Wealth Management offers a range of Investment Advisory services and markets third party
investment products like Portfolio Management Services, Private Equity and Venture Capital
Funds, Structured Products, Mutual Funds, Fixed Deposits and Bonds. These services are offered
through Tata Capital Financial Services Limited.
7. Consumer Loans
Consumer Loans division offers a wide range of loans such as Home Loans (offered through
Tata Capital Housing Finance Limited), Auto Loans, Personal Loans, Business Loans, Education
Loans, Loans against Property, Loans against Shares and Consumer Durable loans offered
through Tata Capital Financial Services Limited.
8. Credit Cards
Globally accepted Credit Card with the advantages of a rewarding Empower program, which is a
multi-brand loyalty program. Tata Card is the White Label Card issued, operated and serviced by
the State Bank of India with Tata Capital only marketing the card. These services are offered
through Tata Capital Financial Services Limited.
The various offerings under Travel include - Airline ticketing, Visa & passport facilitation,
booking hotel accommodation, Cars-hire and surface transport. The offerings under Forex
include - Travelers cheques, foreign currency notes, foreign currency denominated pre-paid
travel cards
Tata Capital Cleantech Limited (TCCL) is a joint venture between Tata Capital Limited and
International Finance Corporation (IFC), a member of the World Bank Group. TCCL is a
focused initiative to assist, via financing and advisory services, companies that promote clean
technology.
My project is in Consumer Durable Loans which falls under Consumer Finance and Advisory
Business (CFAB) Unit of TCFSL. CFAB offers Home Loans, Auto Loans, Personal Loans,
Business Loans, Education Loans, Loan against Property, Loan against Shares, Consumer
Durable Loans, Two Wheeler Loans and Commercial Vehicle Loans
products with little customization. The employees need to follow the established System of
procedures while processing the loan requests for the clients. Thus it can be said that the tasks
and workflow are mechanistic in nature. In case of financial advisory business, the workflow and
tasks are comparatively organic and customized to the needs of the client. There are
interdependencies between the various functions like sales, credit, risk control and treasury.
2. People:
The various people involved in the communication are clients, employees and external
stakeholders such as Direct Selling Agents. The employees belong to different business units
and are experts in their respective finance domain. They have competency in a particular area
and the education spans CA, MBAs and commerce graduates. There is one appraisal done each
year, and it is the annual appraisal. The organization is young with more than 60% of the
employees being less than 40 years in age. There is gender diversity but the dominant gender is
male. The compensation is above the industry standard to attract the best talent but the career
progression is slow as the company is not aggressive in its outlook.
3. Organizational Structure: TCL has product division structure. The business units are formed
on the basis of the product like consumer finance, housing finance, commercial finance and these
business units generally work independent of each other. The support functions like Human
Resource and marketing support each of these business units. There are separate offices for each
of the subsidiary that lies within TCL.
TCL is in financial services domain where the work is standardized and the employees have to
work as per the SOPs. There are more than 100 offices all across India. Although structure is flat
because of the small size of the company, still a lot of sanctions and approvals are required for
miniscule issues suggesting that the decision making is centralized.
4. Culture: The core guiding principle at Tata Group is Ethics. TCL follows and believes in the
principle “We only do what’s right for you”. Thus the terminal value is customer satisfaction
and instrumental values are being ethical and customer centric.
The leadership style is bureaucratic ensuring that the people follow rules and regulation
rigorously. This hinders the entrepreneurial spirit amongst the employees and they intend to do
only what has been instructed to them.
Due to centralization of authority the information flows from top to bottom which causes lapses
in communication. The employees are satisfied with the work life balance but there is an
organization level belief that the company is defensive in its outlook despite being an NBFC.
Association with the brand “TATA” makes it standout amongst competition. Being a
company of a diversified and renowned business group ‘Tata’, brand name has radically
contributed to the credit and growth of businesses. Company has merged all its financial
services under the one cohesive brand name Tata Capital Ltd. This will certainly help
company organize its financial services businesses and be recognized as a united brand.
TCL’s wide basket of offerings gives an excellent opportunity to cross sell products
Experienced and talented workforce both in sales and operations.
TCL operates at lower cut off rate as compared to competitor NBFCs and thus is able to
provide better and cheaper schemes to customer.
Weaknesses
TCL being a young company lacks systems and procedures in few domains which slows
down the business processes.
Technological systems such as Loan origination system and Customer relationship
management need up gradation.
Most of the borrowers are from small and medium enterprise segment who are less
financially stable vis-à-vis large corporate borrowers.
The rate of interest are higher than banks, thus most of the customers are those who are
not able to fetch loan from banks due to weak credibility
Centralized organizational structure makes the company defensive in its outlook
Opportunities
Threats
These include Television, Audio and Video systems, Personal Computers, Laptop, Digital
Cameras and camcorders.
These include Air Conditioners, Refrigerators, Washing machines, Sewing machines, Fans and
Microwaves.
Consumer durables sector is one of the fast growing sectors in India. This sector raked in
revenues worth $7.3 billion is FY 2012 and is expected to reach $12.5 billion by FY 2015.
Compounded Annual Growth rate from FY03 to FY12 has been around 10.8% and the industry
is expected to grow 19.6% in coming years. Urban markets comprise 65% of the total revenues
in the industry and the remaining is contributed by the rural sector.
By 2025, India is expected to become the world’s fifth-largest consuming country from its
twelfth position in 2010. The major factors which are fueling growth in this sector are as follows
I. Growing Demand
With the rapid increase in the disposable income, the Consumer spending in India grew from
US$ 549 billion to US$ 1.06 trillion between 2006 and 2011, putting India on the path to
becoming one of the world’s largest consumer markets by 2025. India’s consumption is expected
to rise 7.3 per cent annually over the next 20 years. By 2040, nine out of every ten Indians will
belong to ‘the global middle class group’ with daily expenditures ranging between US$ 10 and
US$ 100 per person in today’s purchasing power parity terms. The absolute number of India’s
middle class will touch 1 billion by 2039, with its influence on global middle class consumption
captured in the figure below.
India’s biggest asset is the huge size of youth population. 50% of Indians are below the age of 25
and 65% Indians are in the working age group of 15-65.Young Indians are aspirational,
demanding and this has led to shrinking replacement cycle thereby boosting demand for new
products and technology. The huge size of working population not only ensures high demand for
durables but also cheap and enough labour.
With technology changing overnight the desire for new goods is everlasting amongst the young
Indian Population
The rapid rise in the credit cards user base and availability of easy and cheap consumer finance
facilities have enabled consumers to finance their durable needs. These facilities have boosted
purchasing power of consumers and have made luxury goods like LEDs and air conditioners
affordable for a middle class customer.
The rural consumer base is growing at 30% CAGR on account of the rising income and rapid
rural electrification measures taken by the government of India.
II Policy Support
Growth of the electronics industry has been a constant Endeavour of the Government and this is
visible through the following policies
This facility is available on almost all Electronic goods which can be classified into 3 major
categories
1. Customer’s Benefit
The rate of interest is generally 0% for the customer, making it attractive and affordable
enough for low and middle income families to buy high value consumer products.
2. Lender’s Benefit
The lenders get the returns through manufacturer’s subvention and dealer’s subvention. The
returns vary between 20% -30% depending on the product, scheme and tenure. Moreover
lenders also get an opportunity to cross-sell loans (personal loans, insurance etc)
3. Manufacturer’s Benefit
The manufacturer benefits through the volumes game as they are able to sell more. Secondly
they are able to sell larger ticket items which definitely have higher margins
4. Retailer’s Benefit
The retailer also enjoys higher footfall and sales. CD loan facility gives a retailer competitive
advantage over Mom n Pop stores which offer lower prices but don’t have lending facilities.
Also, it has been observed that customer’s relationship with CRE of the lender brings the
customer back to store thus encouraging customer repurchase possibilities.
a) Banks
Banks have been banned by RBI from extending 0% finance schemes. They are not present in
the stores and are approached by customers who are looking for large ticket CD loan.
b) NBFCs
The major rival in the industry is Bajaj FinServ Lending which has been discussed in detail.
Other NBFCs are Capital First and Home Credit but they do not have prominent presence in the
industry.
Thus it can be concluded that the concentration of competitors in Delhi’s CD loan market is low
and there is not much differentiation in the offerings except for BFL’s EMI card.
a) Supplier of Funds
The supplier of funds is Banks and there is plenty of competition amongst them. Keeping in
mind the strong credibility of TCFSL and backing of TATA group, the bargaining power of fund
providers is negligible.
b) Human Resources
In a country with demographic dividend there is no dearth of educated human talent , thus the
bargaining power of employees is also low.
Most of the schemes offered by TCFSL and competitors are similar, thus the cost to the customer
is same (zero in most cases). There are certain schemes on Credit card like 5% cash back on Citi
Bank Cards which give the customers an attractive alternative over our offerings.
Thus it can be concluded that customers enjoy some bargaining power but that does not hamper
the attractiveness of the industry.
d) Threat of substitutes
The major substitutes are credit cards and CD loans offered by banks. With RBI banning 0%
schemes offered by Credit Cards and Banks, the threat of substitutes have reduced in the last
couple of yeaatrs.
a) In order to enter the Consumer Finance space, a new entrant has to obtain the required licenses
and clearances from RBI and other regulatory authorities.
b) The distribution channel is established for existing players and it would be difficult for a new
player to match their presence as the floor space in stores is limited and they do not prefer to
have more than required financers in their premises.
d) Building relationships with manufacturers and getting attractive schemes aboard is a time
consuming job.
Thus it can be concluded that the threat of new entrants is there but not alarming.
1.3.1 LOCATIONS
TCFSL is offering CD loans through 2 Large Scale Retailers (LSRs) : Croma and Reliance
Digital in the following cities
1. Mumbai
2. Pune
3. Ahmedabad
4. Baroda
5. Chennai
6. Bangalore
7. Hyderabad
8. Delhi NCR
9. Chandigarh
The funding can go beyond 1.5 lacs upto 5 lacs but the loan will be granted only after submission
of valid income proof. On the spot approval will not be granted, instead approval will be given
by Central Processing Centre in Mumbai after validating required documents.
1. PAN card
2. Address Proof
3. 1 Passport size Photo
4. Security Post Dated Cheque of amount equal to the net loan amount.
Credit Information Bureau (India) Limited (CIBIL) is a credit data repository that maintains
records of an individual’s payments towards loans and credit cards. By entering the details of the
customer into the Loan Origination System (LOS) the CRE at the Point Of Sale checks the
CIBIL score of the customer. Customers having CIBIL score 700 or above are granted loan.
Customers who don’t have any credit history have CIBIL score as -1, they are granted loan on
the basis of one amongst the following surrogates. Any customer having CIBIL score less than
700 excluding -1 will not be granted loan from TCFSL.
If the customer has car registered in his name and in the city in which he is buying the product,
then loan can be sanctioned under this surrogate.
c) Credit Card
If the customer has a credit card in his name and the card is atleast 6 months old, then loan can
be sanctioned under this surrogate.
d) House Ownership
If the customer is living in self-owned/family-owned house, then loan can be sanctioned under
this surrogate.
If the customer is an employee of a company listed with TCFSL, then loan can be sanctioned
after sending the employment proof to CPC and getting the required approval from them.
• Risk Mitigation
4. What are the legalities and formalities involved in granting the loan?
9. What are the issues and gaps in our Loan Processing cycle and service?
2 IMPLEMENTATION METHODOLOGY
The implementation methodology can be summarized in the series of steps mentioned below
Risk
Initial
mitigation Identify areas
understanding Building Taking charge
and of
of the rapport with of the team to
continious improvement
industry, the Customer achieve the
performance through an
policies and Representativ assigned
monitoring emperical
processes es targets
vis-à-vis study
competitor
Punctuality of CREs
Target planning
Maintaining and enhancing relationships with Croma Executives
Daily monitoring and reporting
Motivating the sales force
Tracking the movement of files from sourcing to disbursal
If there was a suspect case in one store the details were communicated to other CREs as
well to counter the risk
Pan Verification, Voter Identity card verification was done in cases with slightest
suspicion
The major competitor in all the 5 stores was Bajaj FinServ Lending and the results of competitor
analysis have been tabulated in the next section of report.
2.5.2 SCOPE
The scope of the study is limited to 5 only Croma stores in Delhi-NCR.
The respondents were all Croma employees and not other Brand employees positioned in
Croma stores.
Exploratory research is the simplest and most loosely structured design. The basic objective of
our exploratory research was to obtain clarity about the problem situation.
Personal interviews were conducted with the Customer Representatives, Team Leaders and
Territory Sales Manager. The interviews were guided by the following questions
2. What are the expectations of Croma manager and staff from our representatives?
4. What are the problems that you face while working at TCFSL?
Unit of Analysis
Research information was collected from Store Managers, Department managers, Assistant
Department Managers and other Croma executives who were involved in the sale of products
costing more than Rs 10000.
Design of Questionnaire
Research objectives were converted into questions to get exact answers from the respondents.
Both formalized concealed and formalized unconcealed questions were framed to map the
required objectives of the study. A self-administered questionnaire was prepared where the
respondents read all the instructions and questions on their own and recorded their responses.
All the questions were Close-ended, with mix of Dichotomous questions, Multiple-choice
questions and Scales. While designing the questionnaire, considerations were made to keep the
language simple by avoiding ambiguous, leading, loaded and double-barrelled questions.
Branching question was used in the beginning to identify respondents whether they use social
media platforms or not.
Method of administering
Sampling Design
Non- probability sampling design was used to select the sample from the population. In this
design method, the elements of the population did not have any known chance of being selected.
The results of the research have been tabulated in the next section of the report.
3 RESULTS
3.1 ANALYSIS
My project location is Delhi-NCR and here we are presently available at only Croma electronic
stores and soon would be present at Reliance Digital stores. There are 21 Croma stores in Delhi-
NCR excluding the 2 ZIP stores at Domestic and International Airport Terminal. Currently we
are present at 16 stores amongst 21. I am working directly with the Territory Sales Manager (Mr
Shobhit Tyagi). There are two Team Leaders who manage a team of 22 Customer
Representatives (CREs) across the 16 stores.
The first 2 weeks of the internship were spent understanding the entire loan cycle and policies
which include
The last 6 weeks I have been working a kin to a team leader managing the sales team at 5 Croma
stores and helping them achieve their sales targets. This is the time of the year when Air
Conditioner, Refrigerator and Entertainment product (like LCDs/LEDs) sales surge and the sales
team has to be motivated and monitored to capitalize on the seasonality effect. The major
deliverables during this phase are as follows:
The next thing I have done to ensure that the targets are met is to guide the CREs on building
healthy relationships with the Croma sales executives who are the prime sourcing agents for our
IMI New Delhi 37
July 7, 2014 SUMMER INTERNSHIP REPORT- TATA CAPITAL LTD
business. They are the ones who are in the position to channelize the customer to us or our
competitors. I myself interacted with the Store Manager, Department manager and other staff at
Croma stores to ensure that they are satisfied with our services and aware of our presence. It was
during the interaction with the Store Managers that I found out that we are losing potential
business because of our CREs reaching the store at 12 in the noon. The stores open at 11 and
according to the store manager, the customers that walk in at this time are those who are surely
going to buy the product and it is at this time when none of the two financers are in the store.
Thus to ensure that the CREs reach on time, I initiated a system wherein the CRE was suppose to
send me a SMS as soon as he reaches the store and I can cross check his presence by calling the
Store Manager. This helped us tap potential business and this practice was extended by the
Territory sales manager to other stores as well.
Financers are not allowed to advertise their schemes at Croma stores. It is only their Head Office
which decides the schemes that are to be advertised, thus the BTL promotion was limited to
ensuring that the CRE wears his brand T-shirt every day. I suggested the TSM to have a brand
sticker on the laptop and this suggestion was readily accepted.
The monthly target was divided into daily targets and that was further segregated into weekday
and weekend target and daily reports were taken from each CRE.
The target completion status for the five stores for the month of April and May is as follows
Target
DEALER NAME/CRE NAME Target Allocated Target Disbursed Completion%
Saket PVR/ Abhinay 2000000 2019076 100.95%
Faridabad/ shashi 2000000 2002571 100.13%
Rohini/ Saurabh 1000000 1513590 151.36%
Sec-29 Gurgaon/ Ravi
Anand 1000000 1040452 104.05%
Saket Select City Walk/ Arjit
Singh 2000000 2000416 100.02%
TOTAL 8000000 8576105 107.20%
Table 3: Store wise target for the month of April
Target
DEALER NAME/CRE NAME Target Allocated Target Sourced Completion%
Saket PVR/ Abhinay 3000000 3070913 102.36%
Faridabad/ shashi 2000000 2066990 103.35%
Rohini/ Saurabh 1500000 1070000 71.33%
Sec-29 Gurgaon/ Ravi
Anand 1500000 2011436 134.10%
Saket Select City Walk/ Arjit
Singh 2500000 2308528 92.34%
TOTAL 10500000 10527867 100.27%
Table 4: Store wise target for the month of May (Disbursed data was not available)
There was a training held by Risk Control Unit on 1 May 2014. It was attended by all CREs from
my team and I have ensured that the instructions that were given in that meeting are strictly
followed.
As per the information received from my manager the delinquency levels have fallen drastically
to .09% in the last one year.
The loan processing system of BFL is efficient and effective enough to handle huge volumes of
business. The average time taken by a BFL executive to process the details of a customer for
loan approval is around 5 minutes while that taken by TCFSL executive is around 15 minutes.
This is mainly due to the lengthy application form and slow LOS. Mostly on Sundays when the
customer footfall in the store is at its peak, the LOS stops working, This leads to loss of business
on the most critical day of the week. Moreover it strains the relationship of our CRE with
Croma’s Sale executive as they also lose their customer because of our incapability to process
the loan. Many dissatisfied representatives stop sourcing the business to our CRE because of the
above reason. This futher demoralizes the CRE leading to higher attrition rates.
b) Market Presence
BFL is present across 4900 Point of Sale across 91 cities in India The company is rapidly
expanding its presence across India and this has been highlighted in the following figure. They
have doubled their point of sales from 2500 in 2011 to 4900 in 2014 and are on a massive
expansion drive.
Point Of Sales
6000
4900
5000
4000 3500
2800
3000 2500
2000 Point Of Sales
2000
1000
0
2010 2011 2012 2013 2014
c) EMI Card
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. This product has been
well received and has been extremely successful. EMI card was started as a pilot project in 2011
and today the number of EMI cards in force exceeds 1.9 million. These cards have given BFL a
competitive advantage over TCFSL as almost 40% of the customer looking for CD finance are
already carrying EMI card. EMI card has given BFL an opportunity to cross-sell other products
like personal loan, two wheeler loan etc to their customer and thus capitalize on the Customer
Lifetime Value.
As compared to our company BFL has more tie-ups especially when it comes to IT products like
mobile and laptops. I feel it’s a deliberate step not to increase exposure in such products as the
probability of default is higher as compared to other goods.
The standard target penetration level set by the top management is 33% and it stood at 30.54%
and 34.52% for the five stores allocated to me in the month of April and May respectively.
Document Sending
Document
Sourcing Verification & Completed file
Verification
Collection to Store
File
Disbursal Queries Scanning
Inward
It is critical that the CRE after sourcing a case sends the file as soon as possible to the branch. I
discussed with the CREs and then with consensus implemented the strategy to send a file
sourced on a particular weekday on the next consecutive day through the courier facility to the
regional branch. The files that were sourced on Saturday and Sunday were send on Monday as
there was no time on weekends to complete the file. Till date this system is followed by most of
the CREs and the files are reaching the branch on time.
I personally worked closely with the sales coordinator in the branch and ensured that any
pendency in a file gets completed on urgent basis. The average cycle time from sourcing to
disbursement of the file is 5 days.
The average scores (out of 5) obtained on these factors have been listed in the table below
Statistics
Knowledge of Efficiency in
Communication Relationship with schemes and handling
Skills Punctuality Dressing Sense other employees policies customer
Table 7: Mean Value of various parameter’s on which the CRE was judged
Mean
4.2
4.12
4.1 4.06
4 3.94 3.94
3.9 3.84
3.8 3.76
Mean
3.7
3.6
3.5
Communication Punctuality Dressing Sense Relationship Knowledge of Efficiency in
Skills with other schemes and handling
employees policies customer
Overall satisfaction level with the CREs have been depicted in the pie chart below
The ratings received on various parameters are shown in the table below. The coding assigned
was : 1- Strongly Disagree, 2 –Disagree, 3 –Neither Agree nor Disagree, 4 –Agree, 5-Strongly
Agree
The average score of both the indicates that Croma employees are valuing Bajaj Finserv in much
better light than TCFSL.
By using paired T-test at the significance level 5%, I found out that the perception of Croma
executives varied on the following parameters
Loan Origination System
Documentation Requirements
Incentive for Croma Employees
Tie ups with Electronic Brands
Brand recognition to the customer
Objective 3: To study the inclination of Croma Executive to recommend a customer for TCFSL’s
CD loan
The response obtained has been depicted in the pie chart below
48% of the Croma executives said that they always recommend TCFSL loans to their customers
while 6% said they never do so. 46% of them were recommending TCFSL sometimes
e) Loan approval process is much longer (12 mins) than the competitor Bajaj Finserv(6 mins). It
is mainly because of the lengthy application form and Pin code fetching problem in the LOS.
f) A lot of customers are lost to competitor because of the requirement of Security Post dated
cheque while competition requires cancelled cheque.
g) BFL is providing incentives to Croma employees during this season and this has helped them
attract business. I have even seen Croma executive directing a customer to BFL for a Croma
product for which BFL was charging Rs 550 as processing fee while we were charging 0 fee.
h) There is a tendency to keep the business piling up for the first 15 days of the month and
almost 80% of the business is disbursed in the last 15 days of the month.
i) Reconciliation process is not managed effectively. All the CREs are called on the same day
which leads to a lot of rush and mismanagement in the branch. Many CREs go back in the
evening without completing their reconciliation process leading to wastage of time and
business.
j) The operations team is undersized. The norm is to have 1 operation executive for 125 loan
files but we are processing 600 files with 2 executives. This slows down the processing time
and most of the bandwidth of Territory Sales Manager is consumed in handling operational
issues.
4 RECOMMENDATIONS
1) Brand Awareness at store can be increased through cost effective Below the Line promotions
like
– Tent cards
– Brand Sticker on Laptop
– Brand labeled notepads, pens
Feasibility check
Incremental cases due to incentive = 10% i.e. 60 ( This has been benchmarked with the increase
that Bajaj FinServ has witnessed due to such initiative)
3) Reconciliation process can be carried out between 8 am- 11 am for 3 days so that the CRE
reaches the store on time. This will help address Croma executive’s dissatisfaction regarding
CRE’s punctuality and also increase business.
4) Two more operations executives required to disburse business keeping in mind the opening of
Reliance digital outlets.
The operations are taken care of by E-Next and the standard laid out by them is 1 executive per
125 files. Currently with 580 files we need 4 executives but only 2 are available.
1. Efficient and Reliable LOS integrated with Risk control utilities like hunter match is the most
important requirement. I can assure that if we have an effective LOS we can take on any
competitor in the market.
2. All competitors require cancelled cheque while we require SPDC. The customer finds this
requirement unreasonable and is hesitant in availing our services. Thus SPDC requirement
should be replaced with Cancelled Cheque.
3. With Monsoon coming, tie-up with IFB would help capitalize on sales of washing machines.
Tie-ups with Panasonic and Toshiba before Diwali would help boost sales during that season.
4. Market presence can be enhanced by venturing into potential stores like More Store, Jumbo
electronics. Sargam Electronics and Vijay Sales are other options which can be considered after
required preliminary checks.
5. Keeping in view increased business CD division requires a minimum 12 seat office. Givin the
same will help reduce disbursal time.
6. Allocation of store to a CRE should be a strategically decided keeping into mind the
productivity, dynamics of store and the personality traits of the CRE
5 REFERENCES
1. http://tatacapital.com/consumer-finance/consumer-durable-loans.htm
2. http://www.bajajfinservlending.in/
3. http://www.thehindu.com/business/consumer-durable-financing-interestfree-schemes-gain-
popularity/article4253297.ece
4. http://articles.economictimes.indiatimes.com/2013-11-07/news/43776454_1_durables-
consumer-mood-festive-season
5. http://www.bajajfinservlending.in/investors-presentations.aspx
6. http://www.thehindubusinessline.com/industry-and-economy/banking/ban-on-0-interest-
schemes-creates-confusion-in-market/article5218227.ece
8. PWC Report titled “Winning In India’s Retail Sector : Factors For Success”-
list2.pwc.fr/assets/...retail.../pwc_winning_in_india_retail_sector_1.pdf
6 APPENDIX
APPENDIX 1: QUESTIONNAIRE
Note:
The aim of this survey is to study the perception and satisfaction towards the Consumer
Durable loans provided by Tata Capital Ltd in your store. Please fill this questionnaire.
2. Please rate Tata Capital’s Customer representative in your store on a scale of 1-5 on the
following parameters. (1-very bad, 2 –bad, 3-average, 4-good, 5-very good)
S.NO ATTRIBUTE 1 2 3 4 5
2(a) Communication Skills
2(b) Punctuality
2(c) Dressing Sense
2(d) Relationship with other employees
2(e) Knowledge of schemes and policies
2(f) Efficiency in handling customer
Q3. On a scale of 1 to 5, please rate each of the financing company on the following attributes.
(1- Strongly Disagree, 2 –Disagree, 3 –Neither Agree nor Disagree, 4 –Agree, 5-Strongly Agree)
a) Always
b) Sometimes
c) Never
5. Any issue/problem you would like to highlight which you are facing with our services?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
6. Gender:
a) Male
b) Female
7. Age:
a) 18 - 24 years
b) 25 – 30 years
c) > 31 years