Boney Hector D Cruz Am Ar U3com08013 Final Project

“COMPARATIVE STUDY ON GOLD LOAN PROVIDED BY MUTHOOT
FINANCE AND ITS COMPETITOR (MANAPPURAM FINANCE)”
PROJECT REPORT
Submitted in partial fulfillment of the requirements

for the award of the degree in
BACHELOR OF COMMERCE
Submitted by
BONEY HECTOR D’CRUZ
Project Mentor
MS. GAYATHRI DEVI
DEPARTMENT OF COMMERCE AND MANAGEMENT
AMRITA SCHOOL OF ARTS & SCIENCES
AMRITA VISHWA VIDYAPEETHAM
AMRITAPURI
Comparative study of Muthoot Finance and Manappuram Finance

Mentor’s Name: Gayathri Devi
Lecturer
Department of Commerce and Management
Amrita School of Arts and Science
Amritapuri
CERTIFICATE
This is to certify that the project entitled “Comparative study on gold loan
provided by Muthoot Finance and its competitor (Manappuram Finance)” is
a bonafide record of the work done by BONEY HECTOR D’CRUZ under
my supervision studying at Amrita School of Arts and Science, Amritapuri,
in partial fulfillment of the requirements for the award of the degree of
Bachelor of Business Management from Amrita Vishwa Vidyapeetham ,
during the period January- March 2011. It has not formed the basis for
award to any candidate for any previous Degree, Diploma, Associate ship,
Fellowship, or other similar titles.
We wish all success in his career.
Station: Amritapuri
Date (Ms. Gayathri Devi)

BONEY HECTOR D’CRUZ
THIRD YEAR, B.COM.
Amrita School of Arts and Science
Amrita Vishwa Vidyapeetham
Amritapuri
DECLARATION
I, BONEY HECTOR D’CRUZ, hereby declare that the project entitled

“COMPARATIVE STUDY ON GOLD LOAN PROVIDED BY
MUTHOOT FINANCE AND ITS COMPETITOR (MANAPPURAM
FINANCE)”, a record of the independent project done by me during the
period January- March 2011. I also declare that it has not formed the basis
for award to any candidate for any previous Degree, Diploma, Associate ship,
Fellowship, or other similar titles.
PLACE: KOLLAM (Boney Hector D’cruz)

Date:

ACKNOWLEDGEMENT
First and foremost I praise and thank the Almighty for being the unfailing
source of support and strength throughout the completion of my internship.
I have a great pleasure in offering my sincere thanks to Ms. Gayathri
Devi, Lecturer, Department of Commerce and Management for the
guidance, suggestions and immense help rendered by him throughout the
internship
I also wish to express my thanks to Mr.Ansil B. Peter Branch
manager, Muthoot Finance Private limited, Vaddy-Kaval Junction for his
guidance and support during my training period.
Words fall shortly to thank all my friends for all their friendship and
support. I am forever indebted to my parents for their constant encouragement
and support without which, it would not have been possible to bring this report
to completion.

ABSTRACT
During the course of B.COM in AMRITA VISHWA VIDYAPEETHAM,

I have completed the project titled “Comparative study on gold loan provided
by Muthoot Finance and its competitor (Manappuram Finance)”. The project is
a comparative study of a gold loan financing company with special reference to
the gold loans offered by Muthoot Finance and Manappuram Finance. The
primary information was collected through direct visits to the concern, Personal
interviews with the branch manager, staff and customers and also through
questionnaires. This primary data was analysed using tables and charts. The
secondary data was collected through company’s annual reports and internet.
A detailed analysis was conducted on the questionnaires collected from
the customers of both institutions and interpretation of data was done by ways
of tables and charts. During the study it was found that both companies are in a
cut throat competition to be the leader in this industry. Some of the problems
faced by companies were analysed and suitable suggestion were given.

LIST OF FIGURES
________________________________________________________________________
FIGURE NO TITLE PAGE NO
2.1 Muthoot’s organisational structure
2.2 Manappuram’s organisational structure
5.1 Gold loan in a year
5.2 Rate of interest
5.3 Location of the institute
5.4 Staff behavior
5.5 Gold loan application procedure
5.6 Infrastructure facilities
5.7 Time taken for the whole gold loan procedure
(Muthoot Finance)
(Manappuram finance)
5.9 Security standards
5.10 Source of knowledge for Muthoot
5.11 Source of knowledge for Manappuram
5.12 Effective gold loans for Muthoot
5.13 Effective gold loans for Manappuram

LIST OF TABLES
________________________________________________________________________
TABLE NO. TITLE PAGE NO
5.1 Gold loan in a year
5.3 Location of the institute
5.4 Staff behavior
5.5 Gold loan application procedure
5.6 Infrastructure facilities
5.8 Security standards
5.9 Source of knowledge
5.10 Effective gold loans
5.11 Long payback period
5.13 Gold Portfolio of the different gold loan providers
5.14 Table on Net loans and Market share

TABLE OF CONTENTS
CHAPTER
NO. TITLE PAGE NO.
I Introduction 1-3
II Organisational Profile 4-14
Research Objectives and Scope of

III 15-17
Research Project
IV Research Methodology and limitation 18-22
Data Analysis, Interpretation and

V 23-43
Presentation
VI Findings, Suggestions and Conclusion 44-48
VII Limitations 49-50
Appendix
51-55
Bibliography

CHAPTER I
INTRODUCTION

India is one of the largest markets for gold and as of fiscal 2010, accounts for approximately
10% of the total world gold stock with an annual demand of approximately 700 tonnes.
Several gold based financial products have been made available to retail consumers in the
Indian market from time to time with a view to bring the gold holdings to the core financial
market.
Lending against gold has been one of the most popular instruments based on gold, and it
works well with the Indian rural population, which typically views gold as an important
savings instrument that is liquid and can be into converted into cash instantly to meet their
urgent cash requirements. Moreover, traditionally gold owners in southern India are more
open than elsewhere in the country to accept and exercise the option of pledging gold to
borrow money.
1.1 TOPIC
“Comparative study on gold loan provided by Muthoot finance and its competitor
(Manappuram finance)”
1.1.1 STATEMENT OF THE PROBLEM
One of the most discussed topics in the present competitive gold loan market is about the best
gold loan company. The two stand out names in this context is Muthoot Finance Limited and
Manappuram General Finance and Leasing Ltd, Both companies face a cut throat competition
among each other to reach the top position of this market. In order to maintain and increase
the market share both companies have to find out their weakness and turn it into their
strengths. Satisfied customers are vital for the existence of the firms. This study aims to
bring out the reasons which make customers choose one company over the other and enlist
the best gold loan company in India.
1.2 REASONS FOR SELECTION OF THIS TOPIC
Muthoot Finance Limited is the largest gold financing company in India in terms of loan
portfolio (Source: IMaCS Industry Report (2010 Update). Muthoot provides personal and
business loans secured by gold jewellery. They have a “Systemically Important Non-deposit
taking NBFC” headquartered in the southern Indian state of Kerala. Our branch network as of
October 31, 2010 was 2,813 branches…
Manappuram General Finance and Leasing Ltd or MAGFIL is a non-banking financial

company (NBFCs) situated in Valapad, Thrissur, Kerala state. Manappuram is the first NBFC
in India to get a short term rating of A1+ from ICRA (the highest short term rating awarded
to any corporate in India by ICRA) and a long term rating of LA+ from ICRA. Manappuram
has over 1,000 branches across 15 states, with a staff strength of over 6,500 people and a
customer base of over 5,000…

There have been many studies connected with the comparison between two different
organisations, but no significant efforts has been made to study the gold loan provided by
Muthoot Finance and Manappuram Finance, the two top gold loan financing companies in
India. Until now a study on the gold loan facilities offered by Muthoot and Manappuram has
not undertaken. The present study seeks to fill up the gap and is likely to open further detail
for probe in this regards.
1.3 LEARNING FROM THE STUDY
This study will help to identify the best gold loan provider and the reasons which make it
stand out from its competitors. The comparative analysis will also help to recognize the
important features which a customer looks into while choosing a gold loan plan. And as for
the other players in the market, this study will enable them to be acquainted with their
weaknesses and strive to improve those features in which they lag behind the top player.

CHAPTER II
ORGANISATIONAL
PROFILE
2.1 INDUSTRIAL PROFILE

2.1.1 OVERVIEW OF THE INDIAN ECONOMY
India is the fifth largest economy in the world after the European Union, the United States,
China and Japan with an estimated GDP of approximately US$3.56 trillion in 2009, on
purchasing power parity ("PPP") basis. India is also one of the fastest growing economies in
the world. According to the Central Statistical Organization, India's GDP grew at a rate of
7.4% in fiscal 2010.
According to India Brand Equity Foundation, India is one of the largest bullion markets in the
world. India is also the largest consumer of gold jewellery in the world (approximately 20%
of global gold consumption), and the largest importer of gold in the world. Gold imports were
approximately 739 tonnes in fiscal 2010.
2.1.2 OVERVIEW OF THE INDIAN CONSUMER CREDIT MARKET
The consumer credit market in India has undergone a significant transformation over the last
decade and experienced rapid growth due to consumer credit becoming cheaper, more widely
available and increasingly a more acceptable avenue of funding for consumers. The consumer
credit market has developed in India due to the following factors:
• Increased focus by banks and financial institutions on consumer credit resulting in a market
shift towards regulated lenders from unregulated moneylenders/financiers.
• Increasing trend of Indian consumers to acquire assets such as cars, goods and houses on
credit.
• Fast emerging middle class and growing number of households in our target segment.
• Improved terms of credit as interest rates in India fall in line with global interest rates.
• Legislative changes that offer greater protection to lenders against fraud and potential
default increasing the incentive to lend.
• Growth in assignment and securitisation arrangements for consumer loans has enabled non
deposit based entities to access wholesale funding and compete solely on their ability to
originate, underwrite and service consumer loans.
Credit availability, affordability and consumer confidence are the key drivers for consumer
loan growth. A variety of financial intermediaries in the public and private sectors participate
in India's consumer lending sector, including the following:
• Commercial banks.
• Long-term lending institutions.
• NBFCs, including housing finance companies.
• Other specialized financial institutions and state-level financial institutions and
• Lenders in the unorganized sector.
2.1.3 GOLD FINANCE INDUSTRY IN INDIA

The recent economic boom and crash has sent shock waves throughout the economy, creating
radical change in business paradigms, consumer demands, and even in economic cultures
themselves. One of the greatest changes in the developing world has been a change in the
people's relationship with gold. Since the days of the Roman Empire, gold has been seen as
both a designer luxury and an immense store of value, and because of its portability and use
as jewelry, gold has been a traditional fashion and savings account for people in Eastern
Europe, India, and other foreign countries for a very long time.
But lately, old habits seem to be dying fairly easily. The pawning of gold, which has for a
long time been perceived as shameful, is rapidly becoming an acceptable practice. In India,
for example, this long-held tradition is being replaced by gold loan businesses, which offer
personal and business loans with gold as a security for lower interest rates than one would
have access to with an unsecured loan. Many of the borrowers are women, who are now
becoming more active members of society and are looking for ways to finance things such as
holiday trips, children's educations, and down payments for homes.
Private lenders in India are making a killing off of this new trend. Once a very small industry,
the gold loan business has taken off and is now a booming trend in India. The business is an
easy way for people in impoverished areas to gain access to quick credit. This is not to say
that credit comes cheap; many of these gold loan businesses charge interest at rates as high as
18%; higher than many of the credit cards we are familiar with. While this may seem a bit
harsh, this is still a great leap forward both culturally and economically for people in the third
world. Historically, informal lending practices such as these are the beginnings of developed
credit markets in later stages of development. This helps people like those in rural India gain
access to the credit that they need to begin building futures for themselves and their children.
2.2 COMPANY PROFILE

2.2.1 MUTHOOT FINANCE LIMITED
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 - BaringsIndia and Matrix Partners India for Rs.1.57 billion, hence
valuing the earlier privately held company at over $1 billion.
We are a “Systemically Important Non-deposit taking NBFC” headquartered 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 India’s 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.
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:
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.
2.2.1.1 Muthoot Organisational Structure

fig. 2.1

2.2.2 MANAPPURAM GENERAL FINANCE AND LEASING LIMITED

With the Trust, Commitment and Transparency extending over 61 years, Manappuram Group
has emerged as a force to reckon with, under the stewardship of Mr. V.P. Nandakumar, the
Chairman of the company. Today with 9 companies under its fold, having more than 1,950
branches spread over 19 States of India and a total business over Rs. 70 Billion, a workforce
of over 14,500 and a customer base of over 5 Million, we are India`s Largest Listed and
Highest Credit rated Gold Loan Company.
We are involved in providing a wide range of financial solutions to our customers that will
make their life easy.
The company was founded in 1949 by late Mr. V.C. Padmanabhan, a great visionary of his
times. The company commenced its operations at Valapad, mainly with money lending
activity on a very modest scale. The principal asset of the company was the impeccable
integrity devotion and foresight of its founder. The company soon established itself as a safe
haven for investments of the people of the area providing absolute safety and assured returns.
On the sad demise of the founder in 1986, his illustrious son, Mr. V.P. Nandakumar, the
present Chairman took over the reins. Under his dynamic leadership, the company never had
to look back. Mr. Nandakumar was working as an officer of the erstwhile Nedungadi Bank,
before he took over the captaincy of the company. Known for his sharp business acumen and
professionalism, Mr. Nandakumar has been instrumental in taking the organization to its
present level. With an alert mind and unconventional methods of problem solving, Mr.
Nandakumar has put this organization on the launching pad. He believes that the future
belongs to those who can advantageously use the technology to serve the customers by
evolving customized products and services.
The Group`s flag-ship Company, Manappuram General Finance and Leasing Limited
(MAGFIL) was established in 1992 in the wake of economic reforms launched by the
Government of India mainly to take advantage of the importance assigned to Leasing as a
vehicle to promote decentralized pattern of Economic Growth through small and medium
enterprises. In a short span of time, MAGFIL had several Firsts.
 First NBFC from Kerala to receive a Certificate of Registration issued by RBI mainly
on the strength of the company`s ability to settle the depositors` claim in full.
 First NBFC from Kerala to get a credit rating of "MA+" from ICRA, (a credit rating
agency approved by RBI) which signifies the company`s ability to make timely
repayment of the principal and interest under its Public Deposit Programme. Within a
short span of time MAGFIL recorded a phenomenal growth to become a premier
NBFC from South India.
 It is the FIRST NBFC from Kerala to have received Adequate Safety rating for its
Secured Non- convertible Redeemable Debenture issue for Rs. 50 million.
 First NBFC from Kerala to go for public issue.

 First NBFC from Kerala to issue bonus shares at the ratio 1:1.
 First NBFC from Kerala to receive Foreign Direct Investment (FDI).
 First NBFC from Kerala to receive AD- II (Authorised Dealer - II) License from
RBI.
 First NBFC from Kerala to obtain Broker`s License from IRDA (Insurance
Regulatory & Development Authority).
 First NBFC in the country to receive a Short-term rating of A1+ by ICRA and P1+ by
CRISIL. These are the Highest Short Term Rating awarded by ICRA and CRISIL to
any Corporate in India and Long term rating of LA+ for its working capital limit.
The shares of the company are listed in Mumbai, Chennai and Cochin Stock Exchanges and
are actively traded in BSE at levels far above par.
In 1993, this Group set up Manappuram Benefit Fund Limited, a NIDHI Company to provide
specialized services to its members. Today, it is one of the topmost Nidhi Companies in
South India.
Manappuram Chits (I) Limited, a chit fund company registered under the Chit Fund Act
1982, a central legislation enacted by Government of India, was set up in the year 2000,
where most of the Chit Fund Companies in Kerala found it difficult to conform to the
discipline of this central legislation.
As a part of its diversification, the company also started Forex business upon the Reserve
Bank of India granting it a full-fledged money changers license in the year 2002.
The company also commenced in a big way for instant money transfer facility, in
collaboration with Xpress Money, Coinstar, Instant Cash, Zoha, Ezremit and MoneyGram.
Instant Money Transfers being the fastest method of inward and outward remittance of funds
will be useful to NRIs for remitting money to or from their relatives in India, who will be
able to receive the proceeds within a few minutes of remittance.
Whilst the company`s core activity continues to be Gold Loan, it has entered very
aggressively into fee-based activities especially in the wake of opening up of insurance sector
allowing private participation. In November 2006, company was awarded Broker`s License
by IRDA to sell insurance. As an Insurance broker, the company is able to offer its customers
a wide variety of products tailor-made to their requirements.
Thus the company has emerged as a one-stop financial Super Market. In order to look after
the fee-based activities exclusively, the Group has promoted a separate company called
Manappuram Insurance Brokers Private Limited (MAIBRO) as wholly owned subsidiary of
MAGFIL, the flagship company of the Group.
The Group has received ISO 9001-2000 certification in the year 1993 as a hallmark of its
having attained the International Quality Standards.

As a premier organization, the company has derived its strength from the dedication of its
highly motivated staff. Being an organization with a vision, the company has recognized that
the best of investments are investment in people and has accordingly assigned considerable
importance in the matter of training its staff. It is a matter of considerable pride that the
company has a full-fledge training establishment with very few parallels in the NBFC sector,
where in-house training courses are conducted almost continuously in a very professional
manner for up gradation of the skills and for enhancement of functional efficiency so as to
make the organization a "Customers` Delight". Every employee has been given very clear
idea of his role which enables them to function more efficiently and produce better results.
The Group functions with a tremendous sense of social responsibility. The setting of
Manappuram Institute of Management (MAINMA) in September, 2005 to be groomed into a
management institution of all India repute was dictated by this social responsibility.
The Company has signed an agreement with M/s. Hudson Equity Holdings Limited and
Sequoia Capital India Investment Holdings for preferential issue of compulsorily convertible
preferential shares of Rs.100/- each for Rs. 234 million each, aggregating to Rs. 468 million
to be converted into equity shares later. When converted into equity, both these investment
companies together will be holding Rs. 4,667,284 (Rupees Four Million, Six Hundred and
Sixty Seven Thousand, Two Hundred and Eighty Four) equity shares of Rs. 10/- each at a
price of Rs. 100.272 constituting a maximum of 29.79% of paid- up equity share capital of
the company. These funds have been raised for expanding our business in gold loan and
vehicle loan by opening of more branches across the country.
In November 2008, the company has also received capital infusion of Rs. 1 Billion and 80
Million from UK and the US-based equity firms, with participation from its promoters. The
UK-based Ashmore Alchemy, a joint venture between Ashmore and Alchemy has invested
Rs. 320 million through its Mauritius-based investment vehicle, AA Development Capital
India Fund, LLC.
Considering the increase in the size and volume of operations of the company, we have
appointed Earnest & Young, an internationally reputed firm as our auditors.
The company`s vision in the short term is to emerge as a strong national player, with a wide
Branch network across the entire country to serve its customers as a one-stop financial super
market that makes our customers` life easy.

2.2.2.1 Manappuram Organisational Structure
fig. 2.2
Chairman
Board of Managing
Directors Director
Chief General
Manager
Finance Operations Personnel Marketing

Manager Manager Manager Manager
Branch
Manager

CHAPTER III
RESEARCH OBJECTIVES
AND
SCOPE OF RESEARCH PROJECT

3.1 PROBLEM DEFINTION
One of the most discussed topics in the present competitive gold loan market is about
the best gold loan company. The two stand out names in this context is Muthoot Finance
Limited and Manappuram General Finance and Leasing Ltd, Both companies face a cut
throat competition among each other to reach the top position of this market. In order to
maintain and increase the market share both companies have to find out their weakness and
turn it into their strengths. Satisfied customers are vital for the existence of the firms. This
study aims to bring out the reasons which make customers choose one company over the
other.
3.2 OBJECTIVES OF THE RESEARCH PROJECT
3.2.1 PRIMARY OBJECTIVES
 The primary objective of this study is to compare the gold loans provided by Muthoot
Finance Limited and its competitors.
 To analyze the gold loan facility provided by Muthoot Finance limited.
 To observe the working of the various departments in relation with the study.
 To analyze the rate of customer satisfaction.
 To know about the preferences of the customers.
 To study the behavioral factors of customers in choosing a particular gold loan.
3.2.2 SECONDARY OBJECTIVE
 To suggest various factors to improve customer satisfaction. Thus, increasing the

market share of the company.

3.3 SCOPE OF THE RESEARCH PROJECT
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:
 To know the present market share of Muthoot Finance Limited.
 Indentify the factors responsible for the high customer satisfaction.
 To evaluate the social security and empowerment process of the company.
 To evaluate the suggestions of the customers which is necessary for the further
development of the organization.

CHAPTER IV
RESEARCH METHODOLOGY
AND
LIMITATIONS

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.
4.1 RESEARCH PLAN
4.1.1 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.
4.1.2 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 both Muthoot Finance and
Manappuram Finance.
4.2 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)
4.2.1 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 methods of model building etc.

4.2.2 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.
4.2.2.1 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
- Expert opinion
 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
 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 it’s 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
4.2.2.2 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

4.3 SAMPLING PLAN
Sample Frame
In a present study, convenience sampling method is used for collecting the primary data. In
the survey, 60 customers are selected as sample.
Tools for collection of data
A questionnaire is developed to collect data from the respondent under the sample.
Analysis of Data
The primary data are analyzed by using statistical techniques like percent
4.3.1 STATISTICAL TOOLS

The tools used for the analysis are Simple percentage and Diagrammatic representation.
 Simple Percentage
Percentage refers to a special of ratio percentage are used in the making comparison
between two or more data. Percentage is used to describe relationship. Since the percentage
reduce everything to a common base thereby allow meaningful comparison to be made
Number of frequency
× 100
Total number of frequency
 Diagrammatic Representation
Diagrams are used to represent the tabulated data diagrammatically as they will give a
vivid picture about the information collected. The diagrams include.
 Simple Bar diagram
 Multiple Bar diagram
 Pie diagram
 In this particular study the attitudes of a selected sample have been analyzed. There is
a note of relevance to primary data .since the research objectives can only be achieved
through collecting primary data.

CHAPTER V
DATA ANALYSIS,
INTERPRETATION
AND PRESENTATION
1. How often do you take a gold loan in a year?

Table 5.1
Opinion Muthoot Response Manappuram Response % of Muthoot % of Manappuram

Once 11 13 36.67 43.33
2-5 times 19 9 63.33 30
6-10 times 0 8 0 26.67
More than 10 times 0 0 0 0
fig. 5.1
20
18
16
14
12
10 Muthoot Response
8 Manappuram Response
6
4
2
0
Once 2-5 times 6-10 times More than
10 times
INTERPRETATION
The above chart was designed to understand number of times a customer applies for a gold
loan in Muthoot and Manappuram.
The response of the customers suggest that 36.67% of Muthoot’s customers applies for a
gold loan just once while the rest of the 63.33% applies for a gold loan 2-5 times.
In case of Manappuram, Customers who choose their gold loan facility once stands at 43.33%
and those who choose the same 2-5 times a year stands at 30%. Rests 26.67% of the
customers choose this facility 6-10 times a year.
Both Muthoot and Manappuram don’t have any customers who apply for gold loan more than
10 times.
As per the scale below, rate the following factors of Muthoot Finance Limited and
Manappuram General Finance and Leasing Limited:
5- Excellent 4- Very Good 3- Good 2- Fair 1- Bad

I. Rate of interest
Table 5.2

Excellent 6 6 20 20
Very good 10 6 33.33 20
Good 9 11 30 36.67
Fair 5 7 16.67 23.33
Bad 0 0 0 0
fig. 5.2
12
10
6 Muthoot Response
Manappuram Response
4
0
Excellent Very Good Fair Bad
good
INTERPRETATION
The above chart was designed to understand the satisfaction of the customers with the interest
rate on gold loan offered by Muthoot and Manappuram.
Here, 20% of the customers of both Muthoot and Manappuram believe that the interest
offered by both companies is excellent. While 33.33% and 20% of customers of Muthoot and
Manappuram think the rate of interest is very good.
30% (Muthoot) and 36.67% (Manappuram) of the respondents believe the interest rate is
good.
16.67% (Muthoot) and 23.33% (Manappuram) of the respondents believe the interest rate is
fair. None of the respondents thought that interest rate offered by both companies was bad.
II. Location of the institute
Table 5.3

Excellent 8 5 26.67 16.66
Very good 17 11 56.67 36.67
Good 5 8 16.66 26.67
Fair 0 5 0 16.67
Bad 0 1 0 3.33
fig. 5.3
18
16
14
12
10
Muthoot Response
8
Manappuram Response
6
4
2
0
good
INTERPRETATION
The above chart shows the customer response on the location of both the institutes.
Here, Muthoot has a superior lead over Manappuram. This is easily recognisable as 26.67%
of Muthoot’s respondents believe that location of the institutes is excellent while 56.67% of
them believe it is very good.
On the other hand, 16.66% and 36.67% of Manappuram’s respondents considered the
location factor excellent and very good respectively.
The share of customers who choose ‘Good’ as their choice to this question stands as 16.66%
(Muthoot) and 26.67% (Manappuram).
None of Muthoot’s customers selected fair and bad as their option while 16.67% and 3.33%
of Manappuram’s clients opted for fair and bad respectively.
III. Staff behavior
Table 5.4

Excellent 7 7 23.33 23.33
Very good 9 12 30 40
Good 10 7 33.33 23.33
Fair 4 4 13.34 13.34
Bad 0 0 0 0
fig. 5.4
12
10
6 Muthoot Response
Manappuram Response
4
0
good
INTERPRETATION
Staff behavior is interpreted in the above chart. About 23.33% of both the organizations
thought that the behavior of staff is excellent.
The share of customers who choose very good as the option stands at 30% for Muthoot and
40% for Manappuram.
33.33% and 13.34% of Muthoot’s respondents believe that staff behavior was good and fair
respectively. This preference was selected by 23.33% and 13.34% in case of Manappuram.
None of the respondents to the questionnaire believe that the behavior of staff in both these
institutes was bad.
IV. Gold loan application procedure
Table 5.5

Excellent 12 6 30 20
Very good 3 7 10 23.33
Good 11 14 36.67 46.67
Fair 4 3 13.33 10
Bad 0 0 0 0
fig. 5.5
14
12
10
8
Muthoot Response
0
good
INTERPRETATION
The above chart was designed to interpret the response of customers to Muthoot’s and
Manappuram’s gold loan procedure.
It was interpreted that 30% and 10% of Muthoot’s respondents as well as 20% and 23.33% of
Manappuram’s respondents believed that this factor was excellent and very good
respectively.
As for option ‘Good’ and ‘Fair’ the share stands at 36.67% and 13.33% (Muthoot) and
46.67% and 10% (Manappuram).
No one selected ‘Bad’ in response to this question for either company.
V. Infrastructure facilities
Table 5.6

Excellent 8 4 26.67 13.33
Very good 14 6 46.67 20
Good 5 12 16.66 40
Fair 3 7 10 23.34
Bad 0 1 0 3.33
fig. 5.6
14
12
10
8
Muthoot Response
0
good
INTERPRETATION
The above chart represents the rating given by the customers on the infrastructure facilities of
both institutes.
26.67% was the share of Muthoot customers who thought that these facilities were excellent
and almost half of the total respondents (47.67%) believed it is very good.
And as for Manappuram, those who believed this facility is excellent stands at 20% and 40%
of the total thought it is very good.
The option ‘Good’ was selected by 16.66% (Muthoot) and 40% (Manappuram) respectively.
The option ‘Fair’ was selected by 10% (Muthoot) and 23.34% (Manappuram) respectively.
It was suprising to see 3.33% of Manappuram’s respondents believed that the infrastructure
facility provided by the organization was bad.
2. Time taken for the whole gold loan procedure?
Table 5.7

Less than 5 minutes 4 0 13.33 0
5- 10 minutes 9 6 30 20
11- 30 minutes 15 19 50 63.33
31- 60 minutes 2 5 6.67 16.67
Others (Please mention) 0 0 0 0
fig. 5.7
Muthoot Response
Less than 5 minutes

5- 10 minutes
11- 30 minutes
31- 60 minutes
Others (Please mention)
fig. 5.8
Manappuram Response
Less than 5 minutes

5- 10 minutes
11- 30 minutes
31- 60 minutes
Others (Please mention)
INTERPRETATION
The above pie diagrams represents one of the main factors which decides the fate of any gold
loan financing company i.e. time taken for clearing a gold loan.

13.33% of Muthoot’s respondents believed that it takes less than 5 minutes for the whole gold
loan procedure. But this option was not at all selected by any of the Manappuram’s
respondents.
Those respondents who thinks the whole gold loan procedure takes 5- 10 minutes stands at
30% (Muthoot) and 20% (Manappuram).
The option ’11-30 minutes’ was selected by 50% (Muthoot) and 63.33% (Manappuram)
respectively.
The option ’31-60 minutes’ was selected by 6.67% (Muthoot) and 16.67% (Manappuram)
respectively.
None of the respondents believe that the whole gold loan procedure takes more than 1 hour.
3. How satisfied are you with the security standards of Muthoot Finance Limited
Manappuram General Finance and Leasing Limited?
Table 5.8

100% 2 0 6.67 0
80- 99% 12 14 40 46.67
60- 79% 9 8 30 26.66
40- 59% 6 6 20 20
>40% 1 2 3.33 6.67
fig. 5.9
>40%
40- 59%
60- 79% Manappuram Response

Muthoot Response
80- 99%
100%
0 2 4 6 8 10 12 14 16
INTERPRETATION
The above bar diagram is also another important determinant of a gold financing company’s
success.
It is interpreted that 6.67% of Muthoot’s respondents are 100% satisfied with their security
standards while none of the Manappuram’s respondents are fully satisfied with the
company’s security standards.
It is also interpreted that 40% (Muthoot) and 46.67% (Manappuram) of the respondents are
80% - 99% satisfied with the security facilities.
Those respondents who trusted Muthoot’s and Manappuram’s security standards 60% - 79%
stands at 30% and 26.66% respectively.
Both the institutes had 20% of the total respondents who believed that the security standard
was 40% - 59% trustable.
Both the institutes had 3.33% (Muthoot) and 6.67% (Manappuram) of the total respondents
who believed that the security standard was less than 40% trustable.
4. How did you come to know about Muthoot, Manappuram and its facilities?
Table 5.9

Newspapers 9 6 30 20
Journals and Magazines 5 3 16.67 10
T.V Advertisements 11 12 36.67 40
Notice 2 5 6.66 16.67
Friends and relatives 3 4 10 13.33
Others (Please specify) 0 0 0 0
fig. 5.10
Muthoot Response
Newspapers
Journals and Magazines
T.V Advertisements
Notice
Friends and relatives
Others (Please specify)
fig. 5.11
Manappuram Response
Newspapers
Journals and Magazines
T.V Advertisements
Notice
Friends and relatives
Others (Please specify)
INTERPRETATION
The 1st pie diagram shows the mediums through which the public came to know about
Muthoot Finance Limited while the 2nd pie diagram shows the same for Manappuram General
Finance and Leasing Limited.

Here, it is interpreted that newspaper as a medium penetrates about 30% for Muthoot and
20% for Manappuram.
The main medium of advertising for both the companies is T.V. advertisements which stand
at 36.67% for Muthoot and 40% for Manappuram
Other sources like journals and magazines- Muthoot (16.67%) and Manappuram (10%),
notice- Muthoot (6.66%) and Manappuram (16.67%), friends and relatives- Muthoot (10%)
and Manappuram (13.33%) also play vital roles in penetrating the market share for both the
companies.
5. Taking into consideration, the recent fluctuations of gold rates. Do you think Muthoot
Finance and Manappuram Finance are successful in providing effective gold loans?
Table 5.10
Opinion Muthoot Response Manappuram % of Muthoot % of

Response Manappuram
Strongly agree 7 3 23.33 10
Agree 14 14 46.67 46.67
Neutral 6 9 20 30
Disagree 3 4 10 13.33
Strongly disagree 0 0 0 0
fig. 5.12
Muthoot Response
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
fig. 5.13
Manappuram Response
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
INTERPRETATION
It is interpreted from the above 2 pie diagrams that a majority of the respondents (46.67%)
both of Muthoot Finance as well as Manappuram Finance agrees to the fact that both

companies were able to provide effective gold loans even after the recent fluctuations in gold
rates.
Those respondents who strongly agree to this fact constitute 23.33% and 10% of the
respondents of Muthoot and Manappuram respectively.
20% (Muthoot) and 30% (Manappuram) opted for neutral while rest 10% (Muthoot) and
13.33% (Manappuram) disagreed to this fact.
6. In case of default, Does Muthoot Finance and Manappuram Finance assist by providing
long payback period?
Table 5.11

Strongly agree 12 5 40 16.67
Agree 14 16 46.67 53.33
Neutral 4 9 13.33 30
Disagree 0 0 0 0
Strongly disagree 0 0 0 0
fig. 5.14
16
16
14
14 12
12
9
10
8 5
6
4 4
2 0
0
0 0
Strongly agree 0
Agree
Neutral
Disagree
Strongly disagree
Muthoot Response Manappuram Response
INTERPRETATION
Here, it is interpreted a majority of the respondents agrees that both financial institutions
assist by providing long payback period.
This was closely followed by the opinion that the respondents strongly agrees that both
financial institutions assist by providing long payback period.
Followed by neutral with 13.33% (Muthoot) and 30% (Manappuram)
MUTHOOT V/S MANAPPURAM
1. RATE OF INTEREST

Table 5.12
Name of institute Muthoot Finance Manappuram Finance
Interest rate (% p.a.) 12.0-24.48 12.0-28.08
Financing (In %) 60-80 88-93
Maximum loan amount 1,00,00,000 1,00,00,000
Max Tenure (In years) 0.25 1
Interest rate type Fixed Fixed
The above table is a very important determinant of in the comparative study of gold loans
offered by Muthoot and Manappuram.
2. BRANCHES IN KOLLAM
Muthoot (95):
Alimukku
Anchal
Anchalmood
Ayur
Anandavallewaram
Anchal- Market Jn.
Arumurikada
Bharanikavu
Chakkuvally
Chandanathoppu
Chatannoor
Chavara- Thekkumbagham
Chamakkada
Channapetta
Chavara
Chengamanad
Cherumoodu
Edappallykotta
Enathu
Kadakkal
East kallada
Elampal
Ezhukone
Kadappakkada
Kalayapuram
Kannanelloor
Karavaloor
Karunagapally 2
Kalluvathukkal
Karalimukku
Karicode
Karunagapally Town
Karunangapally Merged
Kilikollur
Kottarakkara
Kottarakkara- Hospital Jn
Keralapuram
Kizhakketheruvu
Kottarakkara- City branch
Kottarakkara Market
Kottiyam
Kulathupuzha
Kunnicode
Manapally
Kulakkada East
Kundara
Madhathara
Mayyanad
Mukkada
Mynagappally
Nedumancavu
Nilamel
Mulavana
Nallila
Nellikunnam
Ochira
Odanavattom
Pallimukku
Parankimammukal
Pathanapuram
Oyoor
Panicker kadavu

Parippally
Pathanapuramnedumparampu
Pattazhi
Polaithode
Poreekkal
Punalur thookkupalam
Perumpuzha
Pooyappally
Punalur
Punnala
Punthalathazham
Puthoor
Randamkutty Jn. (2nd mile stone)
South paravoor
Puthicavu
Ramankulangara
Roaduvila
Sakthikulangara
Sasthamkotta
Thadicadu
Thazhava
Thuvayur
Sooranad patharam
Thattamala
Thevalakkara
Vadakedathukavu
Vadayattukotta
Valakom
Velichikkala
Yeroor
Vaddy
Vallikkavu
Veliyam
Manappuram (27):
Anchal
Anchal Moodu

Ayur
Bharanikavu
Chandanathoppu
Chathannoor
Kadakkal
Kadappakkada
Karicode
Karunagapally
Kollam
Kottarakkara
Kottiyam
Kulathupuzha
Kundara
Nellimukku
Nilamel
Ochira
Odanavattom
Pallimukku
Pathanapuram
Punalur
Punnala
Puthoor
Ramankulangara
South Paravoor
Thattamala
The above list of the names of branches of both institutes shows that Muthoot has a far
superior lead over its rival Manappuram in terms of number of branches within Kollam
district.
DATA COLLECTED FROM SECONDARY SOURCES
Table 5.13

The above chart shows the Estimated Gold Portfolio of the different gold loan providers in
India.
It is interpreted that Muthoot Finance is 1st with an estimated portfolio of Rs. 7,342 Crores in
F.Y. 2009- 10.
Manappuram Finance which has shown a steady growth in the past few years still lags behind
Muthoot Finance in the 2nd position with an Estimated Gold Portfolio of Rs. 2,560 Crores.
Table 5.14
Net NPA / Net

2008 2009 2010
Loans (%)
Manappuram
1.6% 0.94% 0.49%
Finance
Muthoot
0.47% 0.57% 0.56%
Finance
Market Share 2008 2009 2010
Manappuram
3.7% 4.9% 6.8%
Finance
Muthoot
11.0% 13.4% 19.5%
Finance
Manappuram/
2.97 2.73 2.87
Muthoot
The above table was compiled from figures collected from the financial report of Muthoot
Finance and Manappuram Finance.

It is interpreted that Manappuram's earlier higher NPA's had to do with vehicle loans. NPA's
strictly on gold loans are much lower than that of Muthoot Finance.
Muthoot seems to be doing a good job based on ROE. It's advantageous to Manappuram if
Muthoot can't raise capital.

CHAPTER VI
FINDINGS,
SUGGESTIONS
AND CONCLUSION

6.1 FINDINDS
The present study “Comparative study on gold loan provided by Muthoot finance and its
competitor (Manappuram finance)” is conducted considering both primary and secondary
data. 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 of both companies

among public i.e. 36.67% (Muthoot) and 40% (Manappuram) respectively.
 Majority of the respondents’ have the opinion that the behaviors of both company’s
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 both the companies are more than satisfied with
the security standards on their gold jewellary.
 It was indentified from the customer response that both companies were successful in
proving effective gold loans even after the 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 to Manappuram General Finance 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 than
Manappuram General Finance and Leasing Limited. This is an important indicator of
the bigger market base that Muthoot Finance Limited has over his closest rival
Manappuram General Finance and Leasing Limited.
 The interpretation of data also indicated that the public are more satisfied with the
interest on gold loan offered by Muthoot Finance Limited over Manappuram General

Finance and Leasing Limited. 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. Although Manappuram is on a branch establishment drive it still lacks in the
number branches per area.
 The graph 5.4 shows neck to neck competitions between the two gold loan giants to
satisfy the customers. Here it is difficult to differentiate the two and find the best on
staff behavior.
 The graph 5.5 is also a clear indicator of the close competition between the two
institutes on the requirements for a gold loan as well as the whole gold loan
procedure.
 It has been interpreted that Manappuram General Finance and Leasing Limited lacks a
little bit on the infrastructure side of business. Muthoot being the more established
among the two knows the infrastructure requirements to grow in this industry.
 The pie charts 5.7 and 5.8 are very important to any gold loan financing companies. It
indicates that the time taken for the whole gold loan procedure is very less compared
to Manappuram General Finance and Leasing Limited. This gives Muthoot an all
important edge over Manappuram.
 This graph 5.9 shows the satisfaction of customers on the safety provided by the two
institutes on their gold. Here too, Muthoot has an important edge over Manappuram
on the safety of the securities according to the public opinion.
 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.

6.2 SUGGESTIONS
6.2.1 FOR MANAPPURAM FINANCE
 They should take up more promotional measures to increase the market share of their
products.
 They should concentrate on expansion plans and open new branches in unexplored
areas.
 Manappuram should work on improving their gold loan processing time.
 Infrastructure facilities should also be improved and should be of international

standards to compete with Muthoot Finance.
 Security standards and Interest rates are the other areas where Manappuram Finance
should work on.
6.2.2 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 as it lags behind
Manappuram which has already came up with IPO’s.

6.3 CONCLUSION
The comparative study between gold loan offered by Muthoot Finance and Manappuram
Finance was aimed at finding out the reasons which makes these two companies stand out
among other gold loan financing companies and also to identify the best gold loan provider
among these two financing giants.
It helped me to find out the different factors responsible for the success of these two
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 and its toughest competitor- Manappuram
General Finance and Leasing Limited still lacks in many areas although it has grown rapidly
in the past few months and given Muthoot a run for its money.
This experience has helped me gain knowledge about the business of gold loan financing in
India.

CHAPTER VII
LIMITATIONS OF THE STUDY

7.1 LIMITATIONS
 Time allowed for the study was not sufficient.
 A sample survey was selected.
 The data provided by the respondent may not be correct or accurate.
 Some of the samples selected for the study did not respond properly to the
questionnaire. However proper care had taken to make the analysis and interpretations
more meaningful.
 Questionnaires are impersonal, this means that it may be difficult to understand

answers and 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 would not do in an interview.
 Open questions can take a lot of time to collect and analyse.
 People are not always willing to fill questionnaires in so they may just throw them
always.
 Sometimes questions used are too standardised (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 answers, making questionnaires unreliable and sometimes invalid.

BIBLIOGRAPHY
BOOKS
 Philip Kotler, “Marketing Management” ”, Prentice- Hall of India, New Delhi, 8 th

Edition, August 1994
JOURNALS
 17th Annual Report of Manappuram General Finance and Leasing Limited
 Draft Red Herring Prospectus of Muthoot Finance Limited issued on 30 th September

2010
WEBSITES
 http://www.muthootfinance.com/
 http://www.manappuram.com/
 http://www.thehindubusinessline.in/2010/11/27/stories/2010112751420600.htm
 http://www.theequitydesk.com/forum/forum_posts.asp?TID=2635&PN=1

GOLD LOAN MARKET SURVEY QUESTIONNAIRE
FOR MUTHOOT FINANCE
1. Name of the customer:
2. Age:
3. Occupation:
4. Sex: Male Female
5. Monthly salary:
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:
I. Rate of interest :
II. Location of the institute :
III. Staff behavior :
IV. Gold loan application procedure:
V. Infrastructure facilities :
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%

e) >40%
10. 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
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?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Date:
Signature:

GOLD LOAN MARKET SURVEY QUESTIONNAIRE
FOR MANAPPURAM FINANCE
1. Name of the customer:
2. Age:
3. Occupation:
4. Sex: Male Female
5. Monthly salary:
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 Manappuram General Finance
and Leasing Limited:
I. Rate of interest :
II. Location of the institute :
III. Staff behavior :
IV. Gold loan application procedure:
V. Infrastructure facilities :
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 Manappuram General Finance
and Leasing Limited?
a) 100%
b) 80-99%
c) 60-79%

d) 40-59%
e) >40%
10. How did you come to know about Manappuram General Finance and Leasing Limited
and its facilities?
a) Newspapers
b) Journals and Magazines
c) T.V. Advertisements
d) Notice
e) Friends and relatives
f) Others (Please specify)
11. Taking into consideration, the recent fluctuations of gold rates. Do you think
Manappuram Finance was successful in providing effective gold loans?
12. In case of default, Does Manappuram Finance assists by providing long payback
period?
13. Why do you prefer Manappuram General Finance and Leasing Limited over other
Gold loan institutes and Government organisations?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
14. Any complaints about Manappuram General Finance and Leasing Limited?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
15. Any suggestions to improve the services offered by Manappuram General Finance
and Leasing Limited?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Date:
Signature:

Boney Hector D Cruz Am Ar U3com08013 Final Project

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“COMPARATIVE STUDY ON GOLD LOAN PROVIDED BY MUTHOOT

FINANCE AND ITS COMPETITOR (MANAPPURAM FINANCE)”

Submitted in partial fulfillment of the requirements

BONEY HECTOR D’CRUZ

MS. GAYATHRI DEVI

DEPARTMENT OF COMMERCE AND MANAGEMENT

AMRITA SCHOOL OF ARTS & SCIENCES

AMRITA VISHWA VIDYAPEETHAM

Comparative study of Muthoot Finance and Manappuram Finance

Department of Commerce and Management

Amrita School of Arts and Science

We wish all success in his career.

Comparative study of Muthoot Finance and Manappuram Finance

THIRD YEAR, B.COM.

Amrita School of Arts and Science

Amrita Vishwa Vidyapeetham

I, BONEY HECTOR D’CRUZ, hereby declare that the project entitled

PLACE: KOLLAM (Boney Hector D’cruz)

Comparative study of Muthoot Finance and Manappuram Finance

Comparative study of Muthoot Finance and Manappuram Finance

During the course of B.COM in AMRITA VISHWA VIDYAPEETHAM,

Comparative study of Muthoot Finance and Manappuram Finance

2.1 Muthoot’s organisational structure

2.2 Manappuram’s organisational structure

5.1 Gold loan in a year

5.2 Rate of interest

5.3 Location of the institute

5.4 Staff behavior

5.5 Gold loan application procedure

5.6 Infrastructure facilities

5.7 Time taken for the whole gold loan procedure

5.8 Time taken for the whole gold loan procedure

5.9 Security standards

5.10 Source of knowledge for Muthoot

5.11 Source of knowledge for Manappuram

5.12 Effective gold loans for Muthoot

5.13 Effective gold loans for Manappuram

5.14 Rate of interest

Comparative study of Muthoot Finance and Manappuram Finance

5.1 Gold loan in a year

5.2 Rate of interest

5.3 Location of the institute

5.4 Staff behavior

5.5 Gold loan application procedure

5.6 Infrastructure facilities

5.7 Time taken for the whole gold loan procedure

5.8 Security standards

5.9 Source of knowledge

5.10 Effective gold loans

5.11 Long payback period

5.11 Rate of interest

5.13 Gold Portfolio of the different gold loan providers

5.14 Table on Net loans and Market share

Comparative study of Muthoot Finance and Manappuram Finance

II Organisational Profile 4-14

Research Objectives and Scope of

IV Research Methodology and limitation 18-22

Data Analysis, Interpretation and

VI Findings, Suggestions and Conclusion 44-48

VII Limitations 49-50

Comparative study of Muthoot Finance and Manappuram Finance

Comparative study of Muthoot Finance and Manappuram Finance

1.1.1 STATEMENT OF THE PROBLEM