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A REPORT

ON

A STUDY ON FINANCIAL SERVICES PROVIDED BY


MUTHOOT FINCORP

UNIVERSITY OF MUMBAI
NCRDS

STERLING COLLEGE OF ARTS, COMMERCE & SCIENCE


NERUL, NAVI MUMAI
COLLEGE CODE: 331
PROJECT REPORT ON
THE STUDY OF FINANCIAL SERVICES PROVIDED BY
MUTHOOT FINCORP

SUBMITTED BY
DINESH GEHLOT
PROJECT GUIDEANCE
PROF. AMOGH
IN PARTIAL FULFILLMENT FOR THE COURSE OF
BACHELOR OF MANAGEMENT STUDIES (B.M.S)
T.Y.B.M.S (SEMESTER V)
ACADEMIC YEAR 2016-2017

DECLARATION

I, DINESH GEHLOT the student of T.Y.B.M.S. Semester V (2016-2017) hereby


declare that I have completed the project on The study of Financial Services
Provided by Muthoot Fincorp the information submitted is true and original to
the best of my knowledge.

Date:
Place: Nerul Navi Mumbai

(Dinesh Gehlot)

CERTIFICATE

This is to certify that Ms. Dinesh Gehlot, 736 of Third year B.M.S. Semester V (2016-2017)
has successfully completed the project on The study of Financial Services Provided by
Muthoot Fincorp under the guidance of Ms. Amogh. . submitted on
to this college in fulfillment of the curriculum of Bachelor of
Management Studies University of Mumbai.

This is a bonafide project work and the information presented is true and original to the
best of our knowledge and belief.

PROJECT GUIDE
(

COURSE CO-ORDINATOR
)

PRINCIPAL
(

EXTERNAL GUIDE
)

INTRODUCTION

This is an art of preparing an educative project report offers to provide some aspects
and details regarding to Analytical Study of Various Financial Products with the
special reference to Muthoot finance, Sagar. In this project report, the marketing
financial activity has been brought out in abroad & also the details regarding the
financial services & its marketing activities.
In this project report an attempt is made to bring out the details regarding the history
and achievements for the dynamic growth of the Muthoot finance.The era of finance
which has been taken a talkative role has also been described.
As we know finance plays a vital role in the market and development of economy.
Financial services are needed for every organization to run the business efficiently.
It is required in all sectors of the market i.e., education, Govt, business, trading,
agriculture small scale business etc. Finance plays a main role in day to day life.
Finance includes money, financial policy, financial services and financial
consultants. Finance is considered as life blood of an organization. It is important
in development of economy. Finance increases the savings and mobilization of
funds. It is very useful in new innovations in service sector.

MEANING OF FINANCE

Finance is considered to be the foundation of basic activities of any business.


Particularly in production and marketing activities. The finance functions in the same way
as oil functions in the operation of machine or blood functions in the human body.
In the absence of finance, nobody can image either of setting up a business or its
operations and development. Not only this, finance is needed in those areas where
economic activities of any type are performed.
Generally speaking, business finance means the arrangement of finance for all business
activities of business activities, organization of any Since the type(sale objective of the
business is to earn profit and for the operations proprietorship, firm or company is very
much needed, it can easily be deduced that the business finance is related to the financial
arrangement of the organizations set up and operated for the objective of earning profit.
Finance often signified the money and it studies as how do an individual, businessman,
investor, financial institutions and also government manage and operate the finance, i.e.
Money Experts have never held common opinion with regard to finance

DEFINITIONS OF FINANCE

According to Husband and Duckeny:


Something must be there for directing the flow of economic activities and their conduct
without any bottleneck. Finance is the only means which can perform their function.

According to Osborn, R.C


The finance function is the process of acquiring and utilizing funds by a business.

According to Bonneville and Dewey


Financing consists in raring, providing, managing, of all money, capital or funds of any
kind to be used in connection with the business.

OBJECTIVE OF THE STUDY


To make a analytical study of various financial products
To know the effective utilization of various financial products by Muthoot finance
corporation ltd.
To study the problems connected with granting Muthoot finance to customer
To study establishment, growth and progress of customer service provided analytical
study of various financial products
To know opinion of customer regarding CTF provided by Muthoot finance for the CTF.

SCOPE OF THE STUDY


The scope of the study is to identify and analyze the factors which make the gold loan
provided by Muthoot Finance Limited the best and most sought after. The reason behind
the huge success of this facility is unlimited. This study intends to:

1. To know the present market share of Muthoot Finance Limited.


2. Indentify the factors responsible for the high customer satisfaction.
3. To evaluate the social security and empowerment process of the company.
4. To evaluate the suggestions of the customers which is necessary for the further
development of the organization.

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LIMITATIONS

Time allowed for the study was not sufficient.


A sample survey was selected.

CHAPTER-2

The data provided by the respondent may not be correct or accurate.

FINANCIAL SERVICES

Some of the samples selected for the study did not respond properly to the questionnaire.
The financial services can also be called financial intermediation is a process by
However proper care had taken to make the analysis and interpretations more meaningful.
which funds are mobilized from a large number of savers and make them
available to all those who are in need of it and particularly to corporate customers.
Questionnaires are impersonal, this means that it may be difficult to understand answers
Thus, financial services sector is a key area and it is very vital for industrial
anddevelopments.
thus to act on them. Also, there is a chance that the question may be misinterpreted,
rendering the answer useless.
Questionnaires also invite people to lie and answer the questions very vaguely which they
A well developed financial services industry is absolutely necessary to mobilize
would not do in an interview.
the savings and to allocate them to various investable channels and thereby to
promote industrial development in a country.
Open questions can take a lot of time to collect and analyze.
People are not always willing to fill questionnaires in so they may just throw them always.
Sometimes questions used are too standardized (closed) so some peoples preferred answers
may not be included, and this also does not allow for much detail.
Peer pressure of embarrassment may cause people to not want to answer certain questions,
or they may want to impress the researcher and fabricate the truth by filling in untrue
FEATURES OF FINANCIAL SERVICES
answers, making questionnaires unreliable and sometimes invalid.
Some of the characteristic features of financial services are as follows.

Customer oriented
Intangibility
Simultaneous performance
Dominance of human element
Perish ability
Inseparability
Lack of special identity.

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OF FINANCIAL
SERVICES
Following areIMPORTANCES
the some of the points
which shows
the importance of the
financial services:

Finance is lifeblood of an organization.


Financial services need for every organization to run the business.
Agricultural sector need financial services.
It is important in development of the economy of the country.
Increases the savings and mobilization of funds.
It is useful in the new innovation in service sector.
it helps to increase the productivity of the agriculture.

REASONS FOR GROWTH OF FINANCIAL SERVICES


Financial services stimulating growth of the system of a country. Reasons for growth of
financial services are as follows,

DEMOGRAPHY
Population growth stimulating the requirement of basic needs, such as food, shelter,
education, health care facility. These needs are fulfilled we required financial systems.

ECONOMIC
Financial services growth directly related with the growth of the economy of the nation.

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POLITICAL AND LEGAL


When the country improves financially growth, automatically the political and legal condition of
the country also improves.
SOCIAL AND CULTURAL

When the country stands financially fit then the living standard of the peoples also
increases automatically and also the culture of the nation is saved.

TYPES OF FINANCIAL SERVICES

1) Long-Term Finance Sources


2) Medium-Term Finance Sources
3) Short-Term Finance Sources

I. Long-Term
Finance
Sources:
Normally,
this source
is resorted
to finance that part/portion of working capital which is of
permanent character, i.e. it is believed that this type of working capital will be needed
constantly for a longer period. Long-term sources for permanent working capital financing
may have the following components.

1) Owned Sources:
The following may be included under their component

a) Issue of Shares:
Issue of shares is an important source for raising fund/finance for permanent working
capital. These shares may be both equity shares and preference shares. Since issue of
equity shares does not create any fixed burden on the earnings of the business therefore
normally equity shares should beissued for raising funds for financing permanent working
capital.

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b) Retained earnings:
That part of earned profits. In a business which is not distributed as divided is called or
retained earnings and it is considered as regular and costless source of financing working
capital.

c) Reserves:
Like retained earnings, various types of reserve also do not involve any fixed charge on
business earnings and therefore the use of such reserves in financing working capital is
also considered as proper and profitable.

d) Sale of fixed assets:


Some fixed assets owned by the business concern may become obsolete and some of
there are available as scrap/residual. At the same time, some are being purchased due to
faulty planning and forecasting and thus become as surplus or superfluous. Al these assets
can be disposed off and thus working capital can be arranged. However, this may be fully
irregular and non-dependable source

e) Retiring current liabilities below book-value:


A business concern may avail some discount while making payments against current
liabilities i.e. discharging the current obligations. Similarly, provisions for taxes and other
known expenses are created and it is just possible that actual payment on these score may
be less than their book values should be considered as non-recurring source for financing
working capital.

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II Borrowed Sources/External Sources:


Under this component of long-term sources, the following are included.

a) Debentures:
Business concern may also raise funds for financing the working capital by issue of
debentures in the same way as the issue of shares. It is, however, noticeable that issue of
debenture created fixed burden (in the firm of interest) on the business used after
considering the progress of the business,stability of business earnings, risk factor etc.
b) Long-term Loans/debts:
In addition to the issue of debenture, a business concern may also obtain funds for
working capital as loans from financial corporations, trusts and investment companies.

II. Medium Term finance:


On the basis of terms of duration. The business finance is classified into 3 types of
Medium Term of finance is that,
Medium Term finance:
To finance a business for a period of more than a year but less than 10 years is called
intermediate financing. Such type of finance is obtained for expansion and modernization
of existing plant. It is also needed for the purchase of assets. It may be used to met the
cost of Costly raw-material. maintenance, repair, improvement and betterment of plant.
Lastly it can be used to repay the short term loans.

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Sources of Medium term finance:

1) Commercial banks:
Commercial banks provide medium term finance to traders and manufacturers against
security.
2) Insurance companies:

The insurance companies also provide loan to manufacturers against the security of
assets.
3) Industrial development bank of Pakistan:

IDBP was established in1961 to provide medium and long term finance to establish and
expand industries.

4) Pakistan industrial credit and investment corporation(PICIC)

This corporation was set up in 1957 and is one of the major sources of providing finance
for medium and long term projects. It also provides finance in technical and managerial
fields. It also provider loans for working capital.

III. SHORT TERM FINANCE


As mentioned in the preceding chapter, variable working capital is normally financed
through short-term sources including spontaneous ones. Following may be included in
this category.

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1)
2)
3)
4)
5)
6)
7)

Trade Credit
Bank Credit
Bank Credit
Inter-corporate Deposits
Advances from customers
Internal sources
Some new and innovative sources (Non-Bank) such as:

a) Commercial Paper

b) Convertible Debentures
c) Factoring

1) Trade Credit: per trade conventions.of different Kinds of product/raw materials provide
Sellers/suppliers
credit to their customers spontaneously as It is a common experience that a substantial part of
purchaser of goods and services in business are on credit terms rather than against cash
payment. While the seller or supplier of goods and services may perceive credit as a lever for
increasing the sales volume, the buyer customer) may look upon it as an alternative to loaning
for the purchase. The credit offered by the seller/supplier in known as Trade credit or Bills
payable also as Accounts payable or Notes payable in America). allowed.
All the successful business concerns which have good record of payment and/or good
credit rating are availing this trade credit continuously. One point should always be
Depending upon the nature of credit. remembered, i.e. trade credit is extended in
connection with goods or raw materials bought for resale or processing and resale and it
is different from consumer credit which is offered to individual for buying goods for
ultimate are/consumption. It is also different form installment credit. Trade credit is an
example of spontaneous source of capital which flows in natural course of the business in
keeping with established trading practices. It does not require any loan-negotiation or
security margin. In India, trade credit is considered to be a very important source of shortterm finance and 20 to 25 percent of short-term sources are obtained from trade credits.

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2) Book credit or Bank Finance (Short-term):


Banks provide short-term finances in the following forms
a) Overdraft:
Customer/clients having current account in the bank may avail the benefit of overdraft
upto a certain limit from their bankers. Customer can overdraw to that extent any time
and may repay the amount any time. Interest is charged by the banker only on that
amount which has been overdrawn by the customer subject to a minimum charge.
Overdraft account operates against security in the form of pledge of shares and securities,
assignment of life insurance policies and sometimes even the mortgage of fixed assets.
b) Cash credit:
Commercial bank provides cash credit facilities to its customers/clients requirements. For
meeting their short-term financing It is such regular system under which bank offers the
facilities to clients to withdraw the money within the limits pre-fixed by the bank. The
security offered by the clients is in the nature of hypothecation of stocks or promissory
notes bearing signatures of other persons also.
c) Discounting trade bills:
Sellers often draw bills on their customers purchasing goods on credit. The purchases
give their acceptance. Such bills are being discounted by the sellers for arranging shortterm funds. In other words, bank provides finance to the Obviously, bank will not
customers either by outright purchasing or by discounting bills receivables held by the
customers. pay the full amount and therefore charges something as discount.
d) Opening of letters of Credit:
Letter of credit is opened by a bank in favors of its customer undertaking the
responsibility to pay the supplier of goods if its customer fails to pay for goods purchased
within the stipulated time. Under this scheme of bank finance, bank does not provide
finance; rather it assumes the risk of non-payment by its customer. Bank provides shortterm credit in the above forms to its customer. However, bank credit system is subjected
to a number of regulations as discussed at the end of this chapter.

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3) Public Deposits:

Regulations imposed on the availability of bank credit induced many concerns to


explore alternative sources of financing the working capital and the mobilization of
savings from the general public was rated to be a very important alternative source. Funds
thus mobilized form general public deposits by non financial and non-banking companies
is a very old system. A number of textile mills of Ahmadabad, Surat and Mumbai started
to avail this source of finance which became very popular later on.
In or country the evolution of inter corporation deposits took place in the seventh decade
of the twentieth century. Both demand and supply were equally responsible for this. There
is no control on the short-term market of inter-corporate deposits
However, long-term deposits are made (covered under sec 58 A) of the Indian Co, AC
and accepted freely among the corporate bodies.
5) Advances from customers:

Many times some produces/sellers receive whole or part of the amount of gods quite in
advance and such amount remains with them till the supply of goods. interest is paid on
this amount. Normally, no Therefore, it is the cheaper source of short-term financing but
resort to their method can be made only by some reputed and well-settled concerns. In
case of industries, where tough competition is noticed, no advance can be received rather
6) Internal Sources:
When a business concern establishes a depreciation fund/reserve, this can be used to provide
for working capital financing at least till these are needed for replacing the assets. Similarly,
the plough-back of profit or retained earnings can be useful for providing working capital
finances. Again provision for tax can also be utilized I the same way.
7) New and innovative Sources:
A number of significant changes have taken place in short-term finance or money
market in India during the last 10 to 15 years. Some more important are as under.

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a) Commercial paper Corporation {C.P. C }:


Commercial paper is a short-term money market instrument which is considered as most ideal
both for investors as well as for corporate sector borrowing from banks for working capital
requirements. While high-rate companies may take advantage of this source the investors too
can earn profit by using their short-term funds.
As a source of short-term fund, commercial paper is most popular in Japan and western
countries. In the USA, it is in vogue. For over 100 years, while in European countries and
Japan its origin is of recent one. In our country, Reserve Bank of India permitted the issue
of commercial papers in the year 1989
Commercial paper is a promissory note which is negotiable by endorsement and fit for delivery
with a fixed maturity between one month to one year and it is issued on discount basis
It helps to raise short-term debt at attractive rates. It is an unsecured instrument and is not
tied up to any specific business transaction. It does not carry any collateral security. Thus,
commercial paper becomes a substitute source and not an additional source.
b) Convertible debentures:
For augmenting funds for working capital along with long- term purposes, there is one
more source, i.e. the issue of convertible debentures.last two decade or It has been
gaining popularity since so. Since Banks generally grant loans/advances only on the
security of current assets, the issue of debentures is regarded as the only other appropriate
alternative source for raising capital including working capital.

The issue of bearer debentures in normally not permitted. Similarly, the issue of
debentures is not permitted just to prevent an enterprise from closing down due to
recurring losses. Even the permissible rater of interest on convertible and non-convertible
debenture is notified by the government form time to time.

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c) Factoring:
One most recent source for financing working capital in factoring. In fact, factoring is
also a business activity in which a financial intermediary called factor) takes the responsibility of
collecting the debtors or receivables of a manufacturing trading concern called Seller or Clint. In
other words chief financial executive instead of discounting the bills from bankers seller the debtors
and receivables to a special financial institution. Factor, i.e. financial institution assumes total
responsibility of sales ledger administration and collections from debtors. Thus, Factoring is a
continuing arrangement between financial intermediary called factory and seller of goods and services
(called client). Factors are generally subsidiary of either Bank or private Finance companies.
It is also important to note that factoring should not be considered as related only to a specific
transaction rather it should be considered as a continuous arrangement. In fact, it takes care of all
receivables emanating from the credit sales of its client. In this sense, factoring is a financial service
designed to help companies in managing the receivables in a better way.

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CHAPTER -3
COMPANY PROFILE
COMPANY BACKGROUND:
The Muthoot Group is a 123 years old business based in India and interested in financial
services, Information technology, Media and Entertainment, Health care, Education, Power
generation, Infrastructure, Plantations, Precious metals and Hospitality. The Group takes its
name from the Muthoot Family based in Kerala. The Company was set up by Muthoot Ninan
Mathai in 1887 at Kozhencherry , a small town in the erstwhile Kingdom of Travancore
(Kerala). It was then later taken over by his son M John Muthoot who incorporated the Finance
division of the group which was till then primarily involved in wholesale of grains. The
company is now managed by the third and fourth generation of its family members.
Muthoot Fincorp Limited (MFL) the flagship Company of the 20,000 Crore Muthoot
Pappachan Group . A market leader in the gold loan business Muthoot Fincorp has
over 1280 branches spread across the cities, towns and villages of India, the Company
serves an average of 45,000 customers a day. Muthoot Fincorps long-standing
experience, expertise and stronghold in the semi urban and rural areas have enabled the
Company to provide quick, customized finance options and investment products,
maximizing returns to the population. The loan products of Muthoot Fincorp are
uniquely structured to serve people who do not have easy access to mainstream
commercial banks.
MFL counts the satisfaction and long-service of its people as a cornerstone of its success.
Fostering teamwork, nurturing creativity and rewarding Dedication to commitment are
systematically and professionally managed. Excellence and nnovation are encouraged
and rewarded. Ensuring MFLs people remain at the competitive edge, best practice in
the area and unique motivational programs are regularly carried out by the Training and
HR departments.
The company recently announced plans for an IPO (Initial Public Offering) before the
year 2014. In addition there are plans to implement an ESOP (Employee Stock
Ownership Plan) before 2012

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Muthoot Fincorp is a subsidiary of Muthoot Groups was established in 1939 and


primarily involved in financial sector of the country. Muthoot Fincorp falls under the
category of Non Banking Financial Company (NBFCs) of the RBI guidelines.
Muthoot Fincorp limited is a finance company catering to the financial needs of retail
and institutional customers. It is registered with the Reserve Bank of India as a
systemically important non-deposit taking non-banking finance company (NBFC)
with a paid up capital of Rs. 60 crores and a Net Owned Fund of Rs. 403 cores.
Muthoot Finance is also the highest credit rated Gold Loan company in India, with a
credit rating of AA-(CRISIAL) for its long term debt and P1+ (CRISIAL) and A1+
(CRISIAL) for its short term debt Instrument. It has a diverse mix of retail offerings
in the areas of Consumer loan products and investment advisory services. These
include Gold loans, Home loans, Auto loans, Business loans, Loans against Property,
Investment products and Advisory Services, Secured Debentures etc.

Muthoot Finance a subsidiary of Muthoot Group was established in 1939, and is


primarily involved in the financial sector of the country. We are the largest gold
financing company in India in terms of loan portfolio. We provide personal and
business loans secured by gold jewellery, or Gold Loans, primarily to individuals who
possess gold jewellery but could not access formal credit within a reasonable time, or to
whom credit may not be available at all, to meet unanticipated or other short-term
liquidity requirements. Our Gold Loan portfolio as of March 31, 2010 comprised
approximately 2.8 million loan accounts in India that we serviced through 1,605
branches across 20 states and two union territories in India. According to the IMaCS
Industry Report 2009, as of March 31, 2010 our branch network was the largest among
gold loan NBFCs in India. We have since increased our branch network to 1,921
branches as of August 31, 2010, and used our branch network to serve an average of
53,989 customers per day in the month of August 2010. As of August 31, 2010, we
employed 12,220 persons in our operations. Muthoot also provides various financial
services such as Insurance distribution, Wealth Management, Foreign Exchange, Money
Transfer and Vehicle & Asset Finance. Muthoot Finance was selected as one of the Top
10 Finance companies to work for in India by Naukri.com. Muthoot Finance privately
placed 4% of its paid up capital to Private Equity players - Barings India and Matrix
Partners India for Rs.1.57 billion, hence valuing the earlier privately held company at
over $1 billion.

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We are a Systemically Important Non-deposit taking NBFC head quartered in the


southern Indian state of Kerala. Our operating history has evolved over a period of 70
years since M George Muthoot (the father of our Promoters) founded a gold loan business
in 1939 under the heritage of a trading business established by his father, Ninan Mathai
Muthoot, in 1887. Since our formation, we have broadened the scale and geographic
scope of our retail lending operations so that, as of March 31, 2010, we were Indias
largest provider of Gold Loans. In the years ended March 31, 2008, 2009 and 2010,
revenues from our Gold Loan business constituted 95.97%, 96.71% and 98.08%,
respectively, of our total income. In addition to our Gold Loans business, we provide
money transfer services through our branches as sub-agents of various registered money
transfer agencies, and recently have commenced providing collection agency services. We
also operate three windmills in the state of Tamil Nadu.
We issue secured non-convertible debentures called Muthoot Gold Bonds on a private
placement basis. Proceeds from our issuance of Muthoot Gold Bonds form a significant
source of funds for our Gold Loan business. We also rely on bank loans and subordinated
debt instruments as our sources of funds. As of March 31, 2010, we had Rs.27,192.5
million in outstanding Muthoot Gold Bonds and Rs.25,612.7 million in other borrowings.
We also raise capital by selling a portion of our loan receivables under bilateral
assignment agreements with various banks that purchase our portfolio primarily for
meeting their priority sector lending commitments.
Our customers are typically small businessmen, vendors, traders, farmers and salaried
individuals, who for reasons of convenience, accessibility or necessity, avail of our credit
facilities by pledging their gold jewellery with us rather than by taking loans from banks
and other financial institutions. We provide retail loan products, primarily comprising
Gold Loans. We also disburse other loans, including those secured by Muthoot Gold
Bonds. Our Gold Loans have a maximum 12 month term. Our average disbursed Gold
Loan amount outstanding was Rs.26,183.0 per loan account as of March 31, 2010. In the
year ended March 31, 2010, our retail loan portfolio earned, on average, 1.67% per
month, or 19.94% per annum.
As of March 31, 2008, 2009 and 2010, our portfolio of outstanding gross Gold Loans
under management wasRs.21,790.1 million, Rs.33,000.7 million and Rs.73,417.3 million,
respectively, and approximately 30.1 tons,38.9 tons and 65.5 tons, respectively, of gold
jewellery was held by us as security for our Gold Loans . Gross non-performing assets
("NPAs") were at 0.42%, 0.48% and 0.46% of our gross retail loan portfolio under
management as of March 31, 2008, 2009 and 2010, respectively.

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In the years ended March 31, 2008, 2009 and 2010, our total income was Rs.3,686.4
million Rs.6,204.0 million and Rs.10,893.7 million, respectively, demonstrating an
annual growth rate of 57.56%, 68.29% and 75.59%, respectively. Our profit after tax in
the years ended March 31, 2008, 2009 and 2010 was Rs.636.0 million, Rs.977.2 million
and Rs.2,275.7 million, respectively, demonstrating an annual growth rate of 44.61%,
53.65% and 132.88%, respectively. Our net worth as of March 31, 2008, 2009 and 2010
was Rs.2,131.1 million, Rs.3,614.5 million and Rs.5,841.9 million, respectively. We
believe that the following competitive strengths position us well for continued growth:

PROFILE OF FOUNDER OF MUTHOOT GROUP


In 1887, in Kozhencherry a quiet hamlet surrounded by plantations in the Southern
state of Kerala, India, Mr. Ninan Mathai started a retail business along with his
plantation ventures.In time, his sons took over the reins and re-established the
business. With their youthful vision and combined strength it soon flourished. In 1939,
the brothers established the Muthoot Chit Fund Enterprises, providing small and
medium loans to farmers and merchants. In a short span of 10 years it became the
largest business house of its kind in Kerala.
They soon moved into full fledged banking operations. They specialized in gold loans
and advances to small enterprises and individuals on quick and easy terms. This
ensured rapid growth. The brothers then decided it was time to bifurcate and thus was
born the Muthoot Pappachan Group, founded by his youngest son Mathew M.
Thomas or Muthoot Pappachan as he is fondly known. Under his watchful eye the
group has since diversified into financial services, hospitality, flight catering, travel
services, IT infrastructure, property development, the automotive sector and alternate
energy. A simple and devout man Muthoot Pappachan espoused a nine point formula
that stood by him in realising his goals. They are love, peace, happiness, kindness,
helpfulness, patience, pleasantness, faithfulness, and self control.
These ethics have been a guiding light to the path of his successors and have permeated
every strata of the Muthoot Pappachan Group. The same values still govern every
decision in the Group. When asked for his formula to success he quipped, unflinching
faith in the Almighty and unshakeable determination to face and overcome challenges.
In dire circumstances and sometimes in the face of loss he was heard to quote that a debit
on earth will be a credit in heaven. A man, known to adhere to his word, he instilled these
values throughout the organization he nurtured. The Muthoot Pappachan Group carries
Muthoot Pappachans legacy on with his words in our hearts I am because God is with
me.

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ABOUT THE BOARD OF DIRECTORS:


Thomas John Muthoot
The Muthoot Pappachan Group is headed by Chairman and Managing Director,
Thomas John Muthoot. With a vision for the future and rooted in the values imparted
by his father, he has effectively spearheaded the group over the past twenty five years
into one of Keralas leading financial powerhouses. He also paved the way for the
diversification of the group into other major industries like power, hospitality,
automotive and more. He is also a member of the Chamber Of Commerce,
Trivandrum, and Treasurer of the Trivandrum Agenda Task Force.
Thomas George Muthoot
Thomas George Muthoot is the quiet strength behind the visionary growth of the group.
The twin of John Muthoot, Managing Director of Muthoot Capital Services and Director
of all other units of the Muthoot Pappachan Group, his penchant for technology and
efficient administrative skills ensures the group stays on the cutting edge of development.
He is also the Chairman of Kerala Non-Banking Finance Companies Welfare Association,
Kochi and on the managing committees of Indo-American Chamber of Commerce-Kerala
Branch, Kochi andEquipment Leasing Association of India (ELAI), Chennai.

Thomas Muthoot
Thomas Muthoot is Director- Strategic Initiatives and Director of other units of the
group. An expert in Micro credit and Micro saving business with a great desire to
serve the masses, he is innovative with need based financial products. His
knowledge of emerging markets and their functions have been harnessed in
structuring the business interests of the group. He is also the Vice President of
Ernakulam District Cricket Association and Managing Committee member of
Kerala Cancer Care Society.

26

THE COMPANY PRODUCT LINE AND FEATURES OF THE PRODUCT


As far as services are concerned, Muthoot Fincorp provides various services according to the needs and
requirements of its customers. Basically its core services are gold loan and swarnavarsham. Muthoot
fincorp has strategic alliances with leading companies which grant its customers access to premium
services at affordable costs. For money transfer Western Union money transfer ,Motilal OswalFor
investment advisory services and share broking, For Mutual Fund-Franklin Templeton. Muthoot Fincorp
also provides SD (secured debenture) and FD (fixed deposits). In gold loan it provides various types of
schemes for customer like 3 minutes express gold loan, smart plus gold loan. In 3 minutes express gold
loan one can get loan up to 90 per cent of gold depending upon the purity level of gold within three
minutes on an monthly interest of 2 per cent. But in Smart plus gold loan the benefit of paying back in
Equated Monthly Instalments, The EMI is apportioned such that the larger amount goes toward
repaying the principal, no foreclosure charges,Part release and repledge is allowed, and Rebates on
prompt payment. Apart from EMI option it also provides different interest rate depending upon time
period and loan amount, here interest is also calculated on diminishing balance method. In smart plus
gold loan more flexibility is there as compared to 3 minute express gold loan.
In FD (fixed deposits) one get double its money in five years and the minimum amount in FD is Rs
10,000/. In case of secured debenture company provides security of property and assets which attract
the customers attentions.

MARKETING STRATEGIES
As its marketing strategies suggest Muthoot Fincorp provides attractive offers to
its customers at the time of festivals like Akshaya Trithiya. Apart from it
advertisement is given in News papers and FM, celebrities and sport stars also
used in the advertisement campaign. Muthoot Fincorp also host some local
events(20-20 cricket tournament,Israel open tournament ) in Kerala and other
states in south India.

27

COMPETITORS
In gold loan market there are different players like banks, NBFC and local pawn brokers
and jewelries. In banking sectorHDFC, Bank of India, Axis Bank, SBI, syndicate Bank
etc. are providing gold loan. In Non-Banking Financial Sector there more competitions
among the competitors and also there big competitors name like Muthoot Finance,
Mannapuram gold loan, Karvy Finance, Future capital gold loan, Reliance gold loan,
Mahindra Finance, and also some other players are involved. In India nearer about 70
per cent of market share is in the hands of local jewelries and pawn brokers. Muthoot
Fincorp objectives is to capture these 70 per cent market share and its biggest
competitors is Muthoot Finance and Mannapuram gold loan. Some of the new players
like Karvy Finance, Mahindra Finance gold loan, Future Capital comes into market
which is a threat for Muthoot Fincorp. Though there are many competitors in gold loan
market but still Muthoot Fincorp is successfully running its business more than six
decades and earned a profit of more than 200 cores in the fiscal year 2010-11.
ACHIEVEMENTS
Muthoot Finance is the highest credit rated Gold Loan company in India, with a
credit rating of AA-(CRISIAL) for its long term debt and P1+ (CRISIAL) and A1+
(CRISIAL) for its short term debt Instrument. Its Mahila Mitra loan portfolio
touches 10,000 women micro entrepreneurs. In last two months it successfully
opened 200 branches in northern part of India.
FUTURE PROSPECTS
Earlier Muthoot Fincorp was only in Kerala, and then it slowly expands its business
and now having more than 700 branches in south India. Then in the early 2000 it
expand its business Gujarat and in north India. At the same time this NBFC Company
provides a wide choice of services to its customers. Now its next step will be to open
another 200 branches in north India and then to shift east India. So one can say that
Mthoot Fincorp is on expansion mode and in next 10 year it wii open its branches in
entire India.

28

MARKET LEADING POSITION IN THE GOLD LOAN BUSINESS WITH A STRONG


PRESENCE IN UNDER-SERVED RURAL AND SEMI URBAN MARKETS

Gold loans are the core products in our asset portfolio. We believe that our experience,
through our Promoters, has enabled us to have a leading position in the Gold Loan
business in India. Highlights of our market leading position include the following:
We are the largest gold financing company in India in terms of loan portfolio. Our loan portfolio
as of March 31, 2010 comprised approximately 2.8 million loan accounts in India with Gold
Loans outstanding of Rs.73,417.3 million.
We have the largest branch network among gold loan NBFCs. As of March 31, 2010, we
operated 1,605 branches across 20 states and two union territories in India, and in the
month of August 2010, we served an average of 53,989 customers daily. Our branch
network has expanded significantly in recent years from 373 branches as of March 31,
2005 to 1,921 branches as of August 31, 2010, comprising 335 branches in northern India,
1,322 branches in southern India, 197 branches in western India and 67 branches in
eastern India.
We believe that due to our early entry we have built a recognizable brand in the rural and
semi-urban markets of India, particularly in the southern Indian states of Tamil Nadu,
Kerala, Andhra Pradesh and Karnataka. As of March 31, 2010, the southern Indian states
of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka constituted 75.38% of our total
Gold Loan portfolio.
We have a strong presence in under-served rural and semi-urban markets. A large portion
of the rural population has limited access to credit either because of their inability to meet
the eligibility requirements of banks and financial institutions because credit is not
available in a timely manner, or at all. We have positioned ourselves to provide loans
targeted at this market.
We offer products with varying loan amounts, advance rates (per gram of gold) and
interest rates. The principal loan amounts we disburse usually range from Rs.2,000.0 to
Rs.100,000.0 while interest rates on our Gold Loans range between 12.00% to 30.00%
per annum.

29

2.2.1.1 Muthoot Organisational Structure


fig. 2.1

30

CHAPTER -4
PRODUCT PROFILE

INTRODUCTION

The year 1939 saw the emergence of the present day corporate giant- The Muthoot
Group. It embarked on its unending mission of providing excellent services to its
customers by establishing its first unit in Kozhencherry
The clear-cut vision and ideals of our founder patron late Shri. Ninan Mathai Muthoot
and Founder chairman late Shri. M George Muthoot has made the Muthoot Group the
Largest financial Group of its kind in India.
Undoubtedly the mission is to win the confidence of the customer through unmatched,
prompt and personalized service

ADMINISTRATIVE SET UP OF MUTHOOT GROUP


The Registered Office of the group is situated at kozhenchenrry In kerala. The
Corporate Office (South) is in Kochi, Kerala and the Corporate Office: (North)
is situated at Lajpat Nagar New Delhi.

31

THE GROUP HAS FORTY FOUR REGIONAL OFFICE


KeralaTamilnaduKARNATAKA ANDHRAPRADE
SH
Trivendrum north

South
tamilnadu

Trivendrum south
Kollam

Sivagangai

Kottarakkara

Trichy

Kozhenchery

Madurai

Ernakulam

Coimbatore

Trichur

Chennai South

Alleppey

Chennai north

Idukki

Pondichery

Calicut

Salem

KOLKATTA

Theni

KARNAL

Thirunelveli

MUMBAI

Thanjavur
A

AHAMADABAD
DELHI
WEST DELHI
JAIPUR

WESTBEGAL
GUJRAT
HARIYANA
DELHI
MAHARASTR
DELHI
RAJASTHAN

32

Bangalore

Hyderabad

North
Bangalore
South
Hubli
Mangalore
Mysore
Goa

Secunderabad
vijayawada
Kurnool
Vishakapatanam
Thirupathi
Rajamundry

VARIOUS DIVISIONS OF MUTHOOT GROUP


1. BANKING & FINANCE DIVISION (MFIN)
Started in 1939
ISO 9001-2000 Company
Deals in Gold Bond (Deposits) , Gold Loan, & M Power Card

2. MUTHOOT PLANTATION DIVISION


Since 1939
Commitment of Muthoot Group to pollution free world
Our Estates are St. Mathews Estate, Koodal & St. Mathews Estate, at Kulasekharam
Nagercoil;
Muthoot Plantation boasts cloves, coconut and Rubber.

3. EDUCATION DIVISION
St. Since
Georges1962
School, Alakananda, New Delhi

St. Georges School, Defence colony, New Delhi


MGM
Muthoot
NursingatSchool,
Kozhencherry,
Staff
Training
Colleges
Ernakulam
& NewPathanamthitta
Delhi

4. MUTHOOT HOSPITALITY & HOTEL DIVISION


Cardamom County
in 1978
& Our
Group
purchased
JustStarted
1 Km from
famous
Periyar
Tiger
Reserve this project in 2000

33

All Spice the multi-cuisine restaurant offers finest international dishes


Ayura-Ayurvedic center helps you for natural therapy.
Green Leaf certificate from Dept. of Tourism Government of Kerala
Company certified with 4 star classification and First ISO 9001-2000 Resort in
Kerala.

Muthoot Pampa Villa


River side cottage at champakulam, Alleppey on the banks of Pampa river

Muthoot Back Water Cruises


.

Fleet of House boats at Alleppey

5. HEALTH CARE DIVISION


1988Memorial Muthoot Medical centre, Kozhenchery with ISO 9001
MarSince
Gregorios
2000 Certification

Mar Gregorios Memorial Muthoot Medical centre, Pathanamthitta

Muthoot MRI Scan & Research Centre.

6. MUTHOOT VEHICLE & ASSET FINANCE DIVISION


Since 1992
Keralas largest I-lire Purchase & Leasing Finance
Company
34

Over Drive Car Loan Facility provides loans with lowest


rates with easy and flexible repayment.
Loan also given to used Vehicles

7. MUTHOOT BUILDERS

Head quarters at Trivandrum.

Throughout its fifteen years of operation, Muthoot Builders have built several meticulously
planned residential, commercial, hospital and hospitality buildings which are known for the
quality of construction, utility value and aesthetic beauty

8. MUTHOOT SYSTEMS AND TECHNOLOGIES PVT LTD.


IT Division of the Muthoot Group
Since 1993
Strong focus on custom application development
Developing custom application ranging from medium to large-scale

9. MONEY TRANSFER DIVISION.


Started in200l
Facilities include (Inward Remittance)
1)
2)
3)
4)
5)

Trans Cash
Xpress Money
First Remit
Instant Cash
Money Gram

35

Outward Remittance
1) Wiremoney

10. MUTHOOT WEALTH MANAGEMENT SERVICES PVT. LTD.

Life Insurance
Mutual Funds
General Insurance

36

11. MUTHOOT FOREIGN EXCHANGE DIVISION


Since 2001
All major
currencies
and travelers cheques accepted for encashment
Commission
free
encashment
Possess Authorized Dealer Category II license from RBI

Sale of major currencies and travelers cheques

12. MUTHOOT PRECIOUS METALS CORPORATION


Sale of 999.99 Pure Gold coin imported from Switzerland.
Easy to buy and store

13. POWER GENERATION


The group has also ventured into power generation by tapping into non conventional
energy resources. The group in association with Suzlon Energy Corporation has
installed two wind power units at Thirunelveli to generate electricity from wind.

14. MEDIA
Muthoot Group has made a grant entry into the world of media & broad casting by
setting up an FM radio station at Chennai.

37

15. MUTHOOT
Helps
the customers toTRAVEL
book their SMART
national as well as international flight tickets. It
also helps people to have passport and visa, and also to book train tickets.

(A). MUTHOOT SECURITIES LTD.


16
Muthoot
Group has forayed into the market, helps the customers to multiply their
.
fortune in Share Trading.

(B) MUTHOOT COMMODITIES LTD.

Latest venture from the Muthoot Group, being a member of MCX, NCDEX and NMCE
Muthoot Commodities provides a platform for commodity future trading.

USP - GOLD LOAN


High per gram rate offered
Quick and fast service extended
Interest rate, monthly I Rupee on words.
8 different schemes, suitable for various categories of customers
Need to produce, only Identity proof and address proof
Your assets (gold ornaments) are kept in out strong rooms under 100% insurance protection.
Interest only for the actual days
Easily available - No need to maintain an account.

38

Super Bullet Points

We provide instant cash loan in 5 minutes


loan for any amount available any time, any where for any purpose.
Simple hassle free loan with least documentation.
unmatched safety of security of Gold pledged.
Flexible payment option on easy installments.

1. USP - GOLD BOND


We mobilize resource, not through fixed deposits as in
Banks, but through Debenture called Gold-Bonds which are
fully secure, redeemable and non-convertible instrument

1. The resources mobilized are given out as gold Loans to


customers. This investors money is guaranteed by 120% of
gold kept in our strong rooms.

2. We offer the best rate of interest- up to 12%. In our Doubling


Bond, We give 17% interest and in 72 months the bond amount
doubles.

3. The Bond holder is free to close the deposit at anytime.


Investors in shares and insurance do not have this facility.

4. Since it is a Debenture, it cannot be converted in to other


instruments like shares etc.

5. Interest can be availed monthly or annually.


39

6. Higher interest rate is offered to senior citizens, Muthoot


employees, Ex-service me state and central government
pensioners, freedom fighters and state and central award
winners.

7. Gold Bond investments can be shifted to any branch of the


company.

8. Also you can avail interest from any branch

9. Customer can avail a loan up to 90% the Bond amount,


through any of our branches.
10. You can suggest a nominee for your investment.

11. Closing of the gold Bond can be effected through any of our
branches.

Super Bullet Points

1. For every 100 crs. of investment in Bonds, we have 140


crores of gold with us.

to
90% available
at anytime
2. Unmatched
liquidity.
Premature closure of Bonds & Loans up

3. Our rate of interest is 2.5% to 3% higher than the interest


rates of nationalized /schedule banks.

40

4. We have an unblemished track record 01124 years. Wide network of over 2500 branches
across the country facilities customers to withdraw the amount of Bonds/Interest from any part of
the country.
5. We have never defaulted or delayed over a single interest payment, not to mention principal.

2. USP - MUTHOOT TRAVEL SMART


Tie -up with all important National and international Air ways Companies.
Category A- IATA recognized travel agent.
Can purchase Air Tickets through any Branch of Muthoot Finance and other out lets and
divisions of Muthoot group.
Door delivery facilities for tickets you purchase.
Service extensions at some of the seleced Air Ports Kochi, Dubai, London, Heethru.
Maintain offices at London, Metro Dubai, Karama.
National and International Tour Packages.
Passport, Visa arrangements at an affordable rate and in reasonable time.

4. USP - PRECIOUS METAL CORPORATION


Can buy, 24 Karat pure gold coins and biscuits
Installment schemes for purchasing ornaments
Less risk and easy to encash.
Gold coins in Pillfur proof packing.
Imported from Switzerland
Favorable for owners of jewellery shops and high value customers.

41

5. USP - Forex
Can BUy and sell all important currencies.
Accepted as Authorized Dealer by the RBI (License for sending money to foreign countries)
category II.
All Muthoot Finance branches can buy foreign currencies.
Travel cheques are issued for all major currencies and also can be en cashed.
We issue electronic travel cards for all major currencies and the same can be used in foreign
countries, as ATM card or Debit Card.
You can Send money to foreign countries through Muthoot. Exchange Companies.

6. USP Money Transfer


It is an on time transfer
For transferring money up Rs. 50000/ the sender or receiver needs to maintain a bank account.
Up to Rs. 50000 can be received as cash by the Indian receiver.
A customer can accept money from any branches of muthoot in India.
A foreigner can receive cash, in Indian currency up to an equivalent of 2500 US Dollars from
any Muthoot branch.
Services of Six money transfer companies are made available through Muthoot Branches.

42

7. USP- M.Power Card


This card will be accepted in all Muthoot Finance branches.
Holder gets an accidental insurance cover up to Rs. 100000/Can enjoy on line Air tickets Booking and Shopping
300 shops in Kerala give the holder, up to 25% discount in shopping
Referral rewards and Bonus points can be converted as gifts.
Recharging facilities for mobile phone
Bill payment facilities at KSEBs and major phone companies.

8. USP-MWMS
Dealing in life Insurance Investment Products.
Advice on best insurance product of all major Insurance Companies
Market Linked Products which are consistently delivering good return
Unit linked and Investment oriented Insurance Plans
Provides Flexibility gives Protection to savings of life
Liquidity, high returns, Tax bnefits, Insurance cover, option to switch among funds and
continued advices to maximize health
xcellent after sales service and redemption advices.

43

CHAPTER -5
RESEARCH METHODOLOGY
RESEARCH PLAN
In this chapter, explains the structural frame work .The research methodology considered
as a blue print of the study. It determines the strengths, reliability and accuracy of the
project. Methodology can be said as the methods used by researchers in selecting
samples, sample size, data collection and various tools in data collection.

PRELIMINARY INVESTIGATION
Preliminary investigation involves the following:
Direct visit to the company.
Discussions with the branch manager.
Analysed about the scope and viability of the existing facilities.
Secondary data were used to get an overview about the two companies.

EXPLORATORY STUDY
Personal interviews with branch manager, staff and the customers.
Questionnaires were used to understand various factors affecting the gold loan financing
decision.
To analyse and interpret the data collected using figures and tables.
The last phase of this project is to give suggestions to Muthoot Finance.

44

RESEARCH DESIGN
A research design is the plan, structure and strategy of investigation conceived so as to
obtain answers to research questions and to control variance by F.N. Kerlinger (1959)

PHASES OF RESEARCH DESIGN


Sample design
Sample design deals with the method of selecting items to be observed for the given study.
Observational design
Observational design relate to the conditions under which the observations are to be made
while conducting research studies.
Statistical design
These design concern with the quantitative and statistical aspects of the design such as
technique of study, the methodsof model building etc.

45

COLLECTION OF DATA

The successes of the study are based upon the proper collection of data. Normally data
collected comes under two categories; Primary and Secondary.

PRIMARY DATA
The data collected directly by the investigator are called primary data. They are original
and give first hand information. It can be collected by different methods viz. direct
personal investigation, indirect oral investigation etc. Primary data were collected through
- Questionnaire

- Personal interview

- Survey method

- Observation

Questionnaire
The primary data was collected mainly by using a questionnaire. In study, structured
questionnaire consisting of a list of questions pertaining to the dichotomous questions, multiple
choice questions and questions for recommendations and suggestions. This facilitates the
respondents to fill up the questionnaire is an easy and fast manner.

The questions are divided in two following sections: Personal details


Inquiry details

46

Personal Interview

The personal interview was taken from half of the respondents. This was mainly to elicit
information that was left out in the questionnaire opinions and suggestions were asked for the
betterment of the project.
Survey method
Survey is the most commonly used method of primary data collection in marketing research.
This is widely used because its extreme flexibility. Survey research is a systematic gathering of
data from respondents through questionnaire. Survey technique used in the study is personal
interview. The advantages of this method are:

It requires relatively shorter period of time to complete

Researcher can procure many different types of information

The amount of information produced on each aspect is larger.

There is a possibility of more accurate reply

SECONDARY DATA
The collected by the investigator from the data already collected by others for some other
purpose are called secondary data. Thus secondary data are refined data from primary data. It is
also called second hand data because data is collected from previous reports about the
organization from the internal books, magazines and World Wide Web. Secondary data are
collected through
- Annual reports
- Websites
- Journals and magazines

47

-6
DATA ANALYSIS CHAPTER
& INTERPRETATION

TABLE-1 SHOWING THE CLASSIFICATION OF

RESPONDENTS ON THE BASIS OF THEIR INCOME GROUP


INCOME (RS.)

NO. OF RESPONDENTS

PERCENTAGE

Below 2000

15

30

2000-4500

13

26

4500-6000

12

24

10

20

50

100

6000 and above


TOTAL

48

Interpretation

Chart showing classification of respondents on their monthly income. out of 50


respondents among the 15 respondents were having a monthly income of less than 2000
while 13 of them earned between 2000-4500, and 12 of respondents have a monthly
income between 4500-6000 and 12 of them earned above 6000.

49

TABLE-2

SHOWING

THE

CLASSIFICATION

RESPONDENTS ON THE BASIS OF AGE GROUP

AGE GROUP (IN


RESPONDENTS)
30-35

NO. OF
RESPONDENS
23
18

PERCENTAGE

35-40

46
36

40-45

10

45-50
TOTAL

50

50

08
100

OF

Interpretation:
Chart showing the classification of respondents according to their age group 23 of the
respondents among the 50 respondents have age group of less than 30-35, while 18 of
then age group of between 35-40, 05 of the respondents have the age group between 4045, 4 of the respondents are in the age group of 45-50.

TABLE-3

SHOWING

THE

CLASSIFICATION

RESPONDENTS ON THE BASIS OF OCCUPATION

51

OF

OCCUPATION

NO. OF

percentage

RESPONDENTS
Govt. employee

20

10

Businessmen

20

40

Agriculturist

14

Professional

13

26

50

100

TOTAL

52

Interpretation
Chart showing the classification according to their occupation out of 50
respondents, 10 of respondents are Govt. employee, 20 of respondents are
businessmen, 07 of respondents are agriculturist, and 13 of respondents are
professionals.

4. TABLE SHOWING THE HOW OFTEN DO YOU TAKE A


GOLD LOAN IN A YEAR

Opinion

No Of

percentage

Respondent
Once

28

56

2-5 times

22

44

6-10 times

times
More than 10
total

50

53

100

Interpretation

The above chart shows that the out of 50, the opinion of the 28 respondents suggest that
56% of Muthoots customers applies for a gold loan just once, while the rest of the
44%applies for a gold loan 2-5 times.

54

5. THE TABLE SHOWS THAT THE CUSTOMERS OPINION


REGARDING THE RATE OF INTEREST CHARGEABLE BY
THE MUTHOOT FINANCE
Opinion

No of

Percentage

respondents
Excellent

22

44

Very good

12

24

Good

10

20

Fair

06

12

Bad

Total

50

100

Interpretation
The above chart was designed to understand the satisfaction of the customers with
the interest rate on gold loan offered by Muthoot finance. Here, 44% of the
customers believe that the interest offered by the muthoot finance company is
excellent. While 24% of customers of Muthoot finance think that the rate of interest
is very good.20% of the respondents believe that the interest rate is good. 12% of
the respondents believe the interest rate is fair. None of the respondesnts thought
that interest rate offered by companies was bad.

55

6. TABLE SHOWS THAT THE MUTHOOT FINANCE STAFF


BEHAVIOR TOWARDS THE CUSTOMER REGARDING
VARIOUS FINANCIAL PRODUCTS
Opinion

No of

percentage

respondents
Excellent

25

50

Very good

12

24

Good

10

20

Fair

03

06

Bad

Total

50

100

Interpretation
Staff behavior is interpreted in the above chart. About 50% of the organizations thought
that the behavior of staff isexcellent. The share of customers who choose very good as the
option stands at 24% for Muthoot finance.20% of respondents believe that staff behavior
was good and 06% of respondents believe that the fair respectively. None of the
respondents to the questionnaire believe that the behavior of staff was bad.

56

7. CUSTOMERS OPINION TOWARDS THE VARIOUS


FINANCIAL LOAN APPLICATION PROCEDURE OFFERED BY
THE MUTHOOT FINANCE.
Opinion

No of respondents

Percentage

Excellent

22

44

Very good

13

26

Good

10

20

Fair

05

10

Bad

Interpretation
The above chart was designed to interpret the response of customers to Muthoot finance
gold loan procedure .It was interpreted that 44% and 26% of Muthoots respondents
believed that this factor was excellent and very good respectively. As for option Good
and Fair the share stands at 20% and 10% Muthoot finance. None of the respondents to
the questionnaire believe that the bad

57

8. TIME TAKEN FOR THE VARIOUS AND WHOLE LOAN


PROCEDURE OF MUTHOOT FINANCE

Opinion

No of

Percentage

respondents
Less than 5 minutes

03

06

5- 10 minutes

07

14

11- 30 minutes

18

36

31- 60 minutes

22

44

Othersmention)
(Please

0
50

Total

100

Interpretation
The above diagrams represents one of the main factors which decides the fate of any loan
financing company i.e. time taken for clearing a loan .06% of respondents believed that it
takes less than 5 minutes for the whole loan procedure.

58

respondents who thinks the whole loan procedure takes 5- 10 minutes stands at 14%. the
option 11-30 minutes was selected by 36%.

The option 31-60 minutes was selected by 44% respectively. None of the respondents believe
that the whole loan procedure takes more than 1 hour.

59

9.

HOW

SATISFIED

ARE

YOU

WITH

THE

SECURITY

STANDARDS OF MUTHOOT FINANCE LIMITED

Opinion

No of

percentage

respondents
100%

10

80- 99%

06

12

60- 79%

18

36

40- 59%

15

30

>40%

06

12

Total

50

100

60

Interpretation

It is interpreted that 10% of respondents are 100% satisfied with their security standards. It is
also interpreted that 12% of respondents satisfied with the security facilities. 18 respondents
trusted Muthoot security standards is 60% - 79% respectively. The institutes had 30% of the
respondents who believed that the security standard was 40% - 59% trustable the institutes had
12% of the respondents who believed that the security standard was greater than 40% trustable.

10. TABLE SHOWING THAT HOW THE CUSTOMER WILL COME TO KNOW
ABOUT MUTHOOT FINANCE FACILITIES.

Opinion

No of
respondents

Percentag
e

Newspapers

08

16

Journals and

06

12

Magazines
T.V Advertisements
Notice
Friends and relatives
Others (Please
specify)
Total

24

48

04

10

20

50

100

Interpretation
The
diagram shows the mediums through which the customer came to know about
Muthoot Finance Limited, Here it is interpreted that newspaper as a medium penetrates
about 16% for Muthoot finance. The main medium of advertising for the company is T.V.
advertisements which stand at 48% for Muthoot finance. Other sources like journals and
magazines- Muthoot finance is 12%. notice is 04%, friends and relatives is 20% is also
play vital role in penetrating the mark share of the company.

61

11. TABLE SHOWS THAT THE CUSTOMER RESPONSES TAKING INTO


CONSIDERATION THE RECENT FLUCTUATIONS OF VARIOUS FINANCIAL
SERVICES OF MUTHOOT FINANCE ARE SUCCESSFUL IN PROVIDING
EFFECTIVE LOANS

Opinion

No of

percentage

respondents
Strongly agree

10

20

Agree

30

60

Neutral

08

16

Disagree

02

04

Strongly
disagree

Interpretation
It is interpreted from the above diagrams that a majority of the 60% respondents of
Muthoot Finance agrees to the fact
62

that the company are able to provide effective loans even after the recent fluctuations in rates.
Those respondents who strongly agree to this fact constitute 20% and 16% opted for neutral
while rest 04% disagreed to this fact.

12. TABLE SHOWS THAT IN CASE OF DEFAULT, DOES


MUTHOOT

FINANCE

ASSIST

BY

PROVIDING

PAYBACK PERIOD

Opinion

No of

Percentage

respondents
Strongly agree

12

24

Agree

28

56

Neutral

10

20

Disagree

Strongly
disagree

Interpretation
63

LONG

Here, it is interpreted a majority of the respondents agrees that financial institutions assist
by providing long payback period. This was closely followed by the opinion that the
respondents strongly agrees that 56% financial institutions assist by providing long
payback period. Followed by neutral with 20% and strongly agree is 24%.

64

CHAPTER 6
FINDINGS, SUGGESTION & CONLUSION

FINDINDS
The major finding of the study can be summarized as follows:
The management and employees of both the companies maintains a good relationship.

Most of the respondents (58.33%) have monthly income range between Rs.5000 Rs
10,000.

Media advertisement has an important role in spreading popularity Incase of Muthoot


Finance.

Majority of the respondents have the opinion that the behaviors of companys staff are
cordial and friendly.

Majority of the customers were satisfied with the services, hence there was no need of
complaints to be lodged.

NBFCs score over banks on two fronts despite charging higher interest - quick approval and
disbursal of loans, and less documentation. An NBFC at the most takes 30 minutes to give the
loan after verifying the gold, and the only document required is an identification proof of the
person pledging the gold.

It was also found that customers of the companies are more than satisfied with the security
standards on their gold jewellary.

It was indentified from the customer response that the companies are successful in proving
effective gold loans even after the65
recent fluctuations in the prices of gold.

The study was also aimed at finding best gold loan financing company. After analyzing and
interpreting the data collected through primary and secondary sources, the following
conclusions were made:
The estimated gold loan portfolio of Muthoot Finance Limited (7,342 Crores) is far superior
and leasing Limited (2,560 Crores) which indicate the sound market position of Muthoot
Finance Private Limited.

It was also interpreted that Muthoot Finance Limited has more regular customers.

The interpretation of data also indicated that the public are more satisfied with the interest
on gold loan offered by Muthoot Finance. This might be a result of its experience in the gold
loan market and its objective to provide gold loans at cheaper and affordable rates.

Another important finding was presence of Muthoot throughout the country as well as
aboard.

Muthoot being the more established among the two knows the infrastructure requirements
to grow in this industry.

It was also interpreted that Muthoot Finance was successful in providing long pay back
periods to its customers. This is also an another reason for its success in this industry.

66

SUGGESTIONS
FOR MUTHOOT FINANCE
Muthoot should work on its marketing strategies to improve its market share.
Most of the people are unaware of the different financial products offered by Muthoot. So
the company should take necessary steps to create awareness among the public.
The company can also give attractive offers to old customers as well as prospective new
customers.
The company can also look into new ventures as it has established itself as the leader in
gold loan financing field.
Muthoot should also speed up its process in offering IPO.

CONCLUSION
It helped me to find out the different factors responsible for the success of the muthoot
finance companies.
The major finding that can be concluded from this study is that Muthoot Finance Limited
is still the best gold financing company in India.
This experience has helped me gain knowledge about the business of gold loan financing in
India.

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GOLD LOAN MARKET SURVEY QUESTIONNAIRE


FOR MUTHOOT FINANCE

1. Name of the customer:

2. Age:

3. Occupation:

4. Sex: Male

Female

5. Monthly salary:

6. How often do you take a gold loan in a year?

a) Once
b) 2- 5 times
c) 6- 10 times
d) More than 10 times
7. As per the scale below, rate the following factors of
Muthoot Finance Limited:

68

5- Excellent 4- Very Good 3- Good 2- Fair 1- Bad

I.

Rate of interest:

II.

Location of the institute:

III.

Staff behavior:

IV.

Gold loan application procedure:

V.
Infrastructure facilities:
8. Time taken for the whole gold loan procedure?

a) Less than 5 minutes


b) 5- 10 minutes
c) 11- 30 minutes
d) 31- 60 minutes
e) Other (Please mention) ________________
9. How satisfied are you with the security standards of
Muthoot Finance Limited?

a) 100%
b) 80-99%
c) 60-79%
d) 40-59%
10.

e) >40%
How did you come to know about Muthoot Finance
Limited and its facilities?

a) Newspapers
b) Journals and Magazines
c) T.V. Advertisements
d) Notice
e) Friends and relatives 69
f) Others (Please specify)

11.

Taking into consideration, the recent fluctuations of


gold rates. Do you think Muthoot Finance was successful
in providing effective gold loans?

12.

In case of default, Does Muthoot Finance assists by


providing long payback period?

13.

Why do you prefer Muthoot Finance Limited over


other Gold loan institutes and Government organisations?
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
____________________________________________

14.

Any complaints about Muthoot Finance Limited?


__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
____________________________________________

15.

Any suggestions to improve the services offered


by Muthoot Finance Limited?
__________________________________________________________
__________________________________________________________
__________________________________________________________
70

__________________________________________________________
____________________________________________

Date:

Signature:

71

BIBLIOGRAPHY

BOOKS

Philip
Kotler, Marketing Management , Prentice- Hall of

India, New Delhi, 8th Edition, August 1994

JOURNALS

17th Annual Report of Manappuram General Finance and


Leasing Limited

Draft Red Herring Prospectus of Muthoot Finance Limited


issued on 30th September 2010

WEBSITES

http://www.muthootfinance.com/

http://www.thehindubusinessline.in/2010/11/27/stories/20
10112751420600.htms

http://www.theequitydesk.com/forum/forum_posts.asp?
TID=2635&PN=1

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