Chapter IV

DATA ANALYSIS - Part II

(PRIMARY DATA - BORROWERS' RESPONSES)

4.1 INTRODUCTION:

The primary data has been collected from the borrowers with the help

of a well designed structured questionnaire having open-ended and

closed-ended questions. The researcher personally visited the

borrowers on random basis and also visited the banks to get the

addresses of the borrowers. There was a good response from the

banks as well as the borrowers. The data was collected from 170

respondents within a period of 4 months i.e. May 2009 to August 2009.

The primary data collected from the borrowers are analyzed as

follows:-

(A) BRIEF PROFILE OF THE SAMPLE:

The study covers a wide data collected from the sample. A brief profile

of the sample is as follows:-

1. AGE-WISE PROFILE OF THE BORROWERS:-

The age-wise profile of educational loan borrowers is categorized into

four categories viz. 18 to 25 years of age, 26 to 35 years of age, 36 to

50 years of age and above 50 years. Accordingly, data collected from

the borrowers is presented as follows:-.

176
 Table 4.1
Age structure of the Borrowers

Age Group No. of Borrowers Percentage

18-25 141 83

26-35 28 16

36-50 1 1

Above 50 0 0

Total 170 100

The data is presented in the chart as follows:-

Chart 4.1
Age-wise Profile of the Borrowers

100
83
80
CD
tn
S 60
c:
CD 40
~
CD
a.. 20
1 0
0
18-25 26-35 36-50 Above
50
Age group

Table 4.1 reveals that out of 170 borrowers for educational loans, 141

borrowers i.e. 83 percent of the borrowers are from age group of (18-

25) years. 28 borrowers i.e. 16 percent of the borrowers for educational

loans are from the age group of (26-35) years. Whereas, there is only

one borrower in the age group of (36 to 50) years. There are no

177
borrowers from the remaining age group of 50 years and above. Thus,

a majority of borrowers i.e. 83 percent are young, who took educational

loans in larger proportion compared to borrowers from other age

groups.

2. GENDER-WISE PROFILE OF THE BORROWERS:-

The gender-wise profile of borrowers is presented as follows:-

Table 4.2
Gender-wise profile of the Borrowers
Gender No. of Borrowers Percentage

Male 98 58

Female 72 42

Total 170 100

The data is presented in the chart as follows:-

Chart 4.2
Gender-wise profile of the Borrowers

80 ~--------------------------------------------------------------------~

60 58
CI)

-
tn 42
ca
r:::: 40
CI)
0
I-
CI)
D- 20

O
Male Female

Gender

178
Table 4.2 reveals that the out of total 170 borrowers for educational

loans from nationalized banks within Mumbai region, 98 borrowers

i.e.58 percent of the borrowers are male and 72 borrowers i.e. 42

percent of the borrowers are female. Hence it is revealed that a

significant number of borrowers (58 percent) are male students.

3. INCOME-WISE PROFILE OF THE BORROWERS:-

The income-wise profile of the borrowers is categorized into five

groups viz. less than Rs.1 Lakh, Rs.1 and Rs.3 Lakhs, Rs.3 and Rs.5

Lakhs, RS.5 and RS.10 Lakhs and Rs.10 Lakhs and above.

Accordingly, data collected from the borrowers is presented as follows:-

Table 4.3
Income-wise Profile of the Borrowers
Annual Income Of Family No. of Percentage
lRs. In Lakhs) Borrowers
Below 1 lakh 32 19

1 lakh - 3 lakhs 96 56

3 lakhs - 5 lakhs 21 12

5lakhs- 10lakhs 14 8

Above 10 lakhs 7 4

Total 170 100

The data is presented in the chart as follows:-

179
 Chart 4.3
Income-wise Profile of the Borrowers

80

60 56
CI)

-..
C)
CIS
c 40
CI)
()
CI)
D.. 20

0
Below 1 lakh- 31akhs - 5lakhs- Above
1 lakh 31akhs 51akhs 10lakhs 10lakhs
Annual Income of the Family

Table 4.3 reveals that out of the total 170 borrowers for educational

loans, 32 borrowers Le.19 percent of the borrowers are having annual

family income less than Rs.1 lakh (Lower class income group). 96

borrowers for educational loans Le. 56 percent of the borrowers are

having annual family income between Rs.1 and Rs.3 Lakhs (Middle

Class income group). 21 borrowers Le.12 percent of the borrowers for

educational loans are having annual family income between Rs.3 and

Rs.5 Lakhs (Upper Middle Class income group). 14 borrowers Le. 8

percent of the borrowers for educational loans are having annual family

income between Rs.5 and Rs.10 Lakhs (Upper Class Income group).

Only 7 borrowers Le. 4 percent of the borrowers for educational loans

are having annual family income above Rs.10 Lakhs (Affluent Class

Income group). Thus, it is revealed that a significant number of

borrowers Le. 56 percent of borrowers having annual family income

between.Rs.1 and Rs.3 lakhs (Middle Class Income Group), have

180
taken educational loans in larger proportion than the borrowers

belonging to other annual income groups.

4. EDUCATIONAL QUALIFICATION OF THE BORROWERS:-

The educational qualification of the borrowers is categorized into 4

groups viz. upto S.S.C., Graduation, Post Graduation, Others (H.S.C. &

other Diploma courses). Accordingly, data collected from the borrowers

is presented as follows:-

Table 4.4
Educational Qualification of the Borrowers

Educational No. of Borrowers Percentage

Qualification
Upto S.S.C 15 9

Graduation 93 54

Post Graduation 6 4

Others 56 33

Total 170 100

The data is presented in the chart as follows:-

181
 Chart 4.4
Educational Qualification of the Borrowers

60
50
rn
CD
40
-...
C)
ca
c: 30
CD
(,)

CD 20
a.
10
0
Upto S.S.C Graduation Post Others
Graduation

Educational qualification

It is revealed from table 4.4 that out of total 170 borrowers for

educational loans, 15 borrowers i.e. 9 percent of borrowers had studied

upto S.S.C. 93 borrowers for educational loans i.e. 54 percent of

borrowers are graduates. 6 borrowers for educational loans i.e. 4

percent of borrowers are post-graduates. Whereas 56 borrowers i.e. 33

percent had studied upto H.S.C. and other equivalent diploma courses.

Thus, 54 percent of borrowers are graduates. This indicates that

majority of borrowers for educational loans are graduates and have

applied for education loan in order to pursue further studies like post-

graduation or management. Also, 33 percent of borrowers who have

studied upto H.S.C or other diploma courses have applied for

educational loan in order to pursue further studies like graduation in

various fields like engineering, medical, arts, science, commerce and

management.

182
5. OCCUPATION OF THE BORROWERS' PARENTS:-
The occupation of the parents of the educational loan borrowers is

categorized into five groups viz. Employed, Self- Employed,

Professional, Business, Others. Accordingly, data collected from the

borrowers is presented as follows:-

Table 4.5
Occupation-wise Profile of Parents of the Borrowers
Parent's Occupation No. of Borrowers Percentage

Employed 129 76

Self-employed 11 6

Professional 3 2

Business 19 11

Others 8 5

Total 170 100

The table is also presented in the chart as follows:-

Chart 4.5
Occupation -wise profile of Parents of the Borrowers

100 ~-----------------------------------

80
Q)
C)
Sc 60
Q)

~
Q)
40
I:L
20 11
2
o
Employed Self- Professional Business Others
employed

Occupation of Borrowers' Parents

183
It is revealed from table 4.5 that out of 170 borrowers, 129 borrowers'

parents i.e. 76 percent of the borrowers are 'Employed'. 11 of the

borrowers' parents i.e.6 percent of the borrowers are 'Self-employed'. 3

borrowers' parents i.e. 2 percent of the borrowers' parents are

'Professionals'. 19 borrowers' parents i.e. 11 percent of borrowers'

parents are having 'Business'. And 8 borrower's parents i.e. 5 percent

of the borrowers' parents are having other occupation like working in

small shops, labourers. Thus, 76 percent of borrowers' parents are

employed. This indicates that the occupation of large number of

parents whose wards are borrowers for educational loans are

'Employed' .

(B) DATA ANALYSIS OF EDUCATIONAL LOANS TAKEN BY

BORROWERS:

1. COURSE FOR WHICH LOAN IS T AKEN:-

The courses for which the borrowers have taken educational loan are

categorized into five groups viz. Graduation, Post Graduation, Medical,

Engineering, Management, and Others. Accordingly, data collected

from the borrowers is presented as follows:-

184
 Table 4.6
Course for which Loan is taken by the Borrowers
Course for which Loan is taken Frequency Percentage

Graduation 16 9

Post Graduation 30 18

Medical 34 20

Engineering 6 4

Management 58 34

Others 26 15

Total 170 100

The data is presented in the chart as follows:-

Chart 4.6
Course for which the loan is taken

40 ~------------------------~~-------,
Q)

-...
C)
as
cQ)
o
30
20
Q)
a.. 10

Course for which loan is taken

It is revealed from table 4.6 that out of 170 borrowers, 16 borrowers i.e.

9 percent of the borrowers took educational loan for pursuing

graduation course. 30 borrowers i.e. 18 percent of the borrowers took

185
educational loan for pursuing post graduation course. 34 borrowers i.e.

20 percent of the borrowers took educational loan for pursuing Medical

course. 6 borrowers Le.4 percent of the borrowers took educational

loan for pursuing Engineering course. 58 borrowers i.e. 34 percent of

the borrowers took educational loan for pursuing Management studies.

Whereas 26 borrowers i.e. 15 percent of the borrowers took

educational loan for pursuing other educational courses like Pilot

training, Retail Management, Software Training. Thus, majority of

borrowers i.e. 34 percent of the borrowers took educational loan for

pursuing management studies vis-a-vis other courses.

2. COURSE FEE STRUCTURE:-

The Course fee structure of the educational loan taken by the

borrowers is broadly categorized into 3 groups viz. course fees upto

Rs. 4 lakhs, Rs.4 lakhs - RS.7.5 lakhs, and Rs.7.5 lakhs & above.

Accordingly, data collected from the borrowers is presented as follows:-

Table 4.7
Course Fee Structure
Course Fees Frequency Percentage

Up to 41akhs 115 68

4 lakhs - 7.5 lakhs 11 6

7.5 lakhs & above 44 26

Total 170 100

The data is presented in the chart as follows:-

186
 Chart 4.7
Course Fee Structure

80
68
CD 60

-
en
as
c
CD
u
"-
40
26
CD
Il. 20
6
0
Upto 41akhs 4 lakhs to 7.5 7.5lakhs &
lakhs above

Fee structure of the courses applied for

Table 4.7 revealed that out of 170 borrowers for educational loans, 115

borrowers i.e. 68 percent of the borrowers applied for the courses

having course fees upto Rs.4 lakhs. 11 borrowers i.e. 6 percent of the

borrowers took up a course having course fees between Rs.4 and

Rs.7.5 lakhs. Whereas 44 borrowers i.e. 26 percent of the borrowers

took up a course having course fees above Rs.7.5 lakhs. Thus,

majority of borrowers i.e. 68 percent of the borrowers for educational

loans took up a course having course fees up to Rs. 4 lakhs.

3. STUDIES PURSUED IN INDIA OR ABROAD:-

The educational loan taken by borrowers is broadly categorized into 2

groups viz. Studying in India and Studying Abroad on the basis of place

of study. Accordingly, data collected from the borrowers is presented

as follows:-

187
 Table 4.8
Studies pursued in India or Abroad by the borrowers

Studying in India or Abroad Frequency Percentage

Studying in India 128 75

Studying Abroad 42 25

Total 170 100

The data is presented in the chart as follows:

Chart 4.8
Studies pursued in India or Abroad by the borrowers

100 ~--------------------------------~

80 75

60
40
25
20

0+----
Studying in India Studying Abroad

Courses pursued in India or Abroad

Table 4.8 revealed that out of total 170 borrowers, 128 borrowers i.e.

75 percent of the borrowers took educational loans for studying in

India. Whereas, 42 borrowers i.e. 25 percent of the borrowers took

educational loans for studying in other countries. Thus, majority of the

borrowers took educational loans for studying in India.

188
4. AMOUNT OF LOAN APPLIED FOR BY THE BORROWERS:-

The amount of the loan applied for by the educational loan borrowers is

categorized in the 3 groups viz. Loan amount applied for upto Rs.4

Lakhs, Loan amount between Rs.4 to 7.5 lakhs and Loan amount

above Rs. 7.5 lakhs. Accordingly, data collected from the borrowers is

presented as follows:-

Table 4.9
Amount of the Loan applied for by the borrowers

Amount of Loan Applied For Frequency Percentage

Upto 41akhs 123 73

4 lakhs - 7.5 lakhs 16 9

7.5 lakhs & above 31 18

Total 170 100

The data is presented in the chart as follows:-

Chart 4.9
Amount of the Loan applied for by the borrowers

80 ~----------------------------------~

60
CD
0)

!'!!
&:::
40
CD
~
~ 20 18
9
o~--

Upto 41akhs 41akhs - 7.Slakhs 7.Slakhs & above

Applied for Loan Amount

189
Table 4.9 revealed that out of 170 borrowers, 123 borrowers i.e. 73

percent of the borrowers applied for loan amount upto Rs.4 lakhs. 31

borrowers i.e. 18 percent of the borrowers applied for loan amount

above RS.7.S Lakhs. Whereas only 16 borrowers Le.9 percent of the

borrowers applied for loan amount between Rs. 4 and Rs.7.S Lakhs.

Thus, majority of the borrowers for educational loans Le.73 percent

applied for educational loans upto Rs.4 Lakhs.

5. AMOUNT OF LOAN SANCTIONED TO THE BORROWERS:-

The amount of the loan sanctioned to the borrowers by banks is

categorized in 3 groups viz. Loan amount sanctioned upto Rs.4 Lakhs,

Loan amount between Rs.4 to 7.S lakhs and Loan amount above

RS.7.S lakhs. Accordingly, data collected from the borrowers is

presented in as under:-

Table 4.10

Amount of Loan Sanctioned to the Borrowers

Amount of Loan Sanctioned Frequency Percentage

Upto 41akhs 133 79

4 lakhs - 7.S lakhs 21 12

7.Slakhs & above 16 9

Total 170 100

The data is presented in the chart as follows:-

190
 Chart 4.10
Amount of Loan Sanctioned to the Borrowers

100
79
CI) 80

-...
en
m
cCI)
u
60
40
CI)
ll.
20 12 9
0
Upto 41akhs 4 lakhs to 7.5 7.5lakhs &
lakhs above

Amount of loan sanctioned

Table 4.10 revealed that out of 170 borrowers, 133 borrowers i.e. 79

percent of borrowers have been sanctioned loan upto Rs.4 Lakhs. 21

borrowers i.e.12 percent have been sanctioned loan between Rs.4 and

Rs. 7.5 Lakhs. Whereas 16 borrowers i.e. 9 percent of borrowers have

been sanctioned loan above Rs.7.S lakhs. Thus, majority of borrowers

i.e. 79 percent borrowers were sanctioned a loan upto Rs.4 lakhs.

6. REPAYMENT TENURE OF THE LOANS TAKEN BY THE

BORROWERS:-

The repayment tenure of the loans taken by the borrowers of

educational loans is presented in as follows:-

191
 Table 4.11
Repayment Tenure of the Loans taken
Repayment tenure Frequency Percentage
1 Year 2 1
1.5 Years 2 1
2 Years 2 1
3 Years 17 10
4 Years 5 3
5 Years 132 77
6 Years 3 2
7 Years 6 4
8 Years 1 1
Total 170 100

The data is presented in the chart as follows:-

Chart 4.11
Repayment Tenure of the Loans taken

90
80 77
70
(1) 60

-
C)
tV
c 50
(1)
(,)
lI.. 40
(1)
Q. 30
20
10
1 1 1 1
0
1 1.5 2 3 4 5 6 7 8
Repayment tenure (Number of years)

192
Table 4.11 revealed that out of 170 borrowers, 132 borrowers i.e.77

percent of borrowers took educational loan which has repayment

tenure of 5 years (60 installments). 17 borrowers i.e. 10 percent of

borrowers took educational loan which has repayment tenure of 3

years. Only 1 borrower had taken educational loan which has

repayment tenure of 8 years. Thus, majority of banks give educational

loans for longer term i.e. 5 years irrespective of the course pursued by

the borrowers which included diploma courses and management

courses having course duration of two or three years only.

7. MORATORIUM PERIOD FOR THE LOANS TAKEN BY THE

BORROWERS:-

The data on moratorium period offered for the loans taken by the

borrowers have been presented as follows:-

193
 Table 4.12
Moratorium Period for the Loans taken
Moratorium Period Frequency Percentage
1 Year 4 2
1.5 Years 5 3
2 Years 29 17
2.5 Years 1 1
3 Years 63 36
4 Years 37 21
4.5 Years 1 1
5 Years 23 14
5.5 Years 1 1
6 Years 5 3
7 Years 1 1
Total 170 100

The data is presented in the chart as follows:-

Chart 4.12
Moratorium period for the loans taken

40 ~--------------~~----------------~

30

20

10

o -+-----,...
1 1.5 2 2.5 3 4 4.5 5 5.5 6
Moratorium Period (No. of Years)

194
Table 4.12 revealed that out of 170 borrowers, 63 borrowers i.e. 36

percent of borrowers took educational loan having moratorium period

of 3 years and 37 borrowers i.e. 21 percent of borrowers took

educational loan having moratorium period of 4 years. 29 borrowers i.e.

17 percent of borrowers took educational loans having moratorium

period of 2 years whereas 23 borrowers i.e. 14 percent of borrowers

have taken educational loans with moratorium period of 5 years. Thus,

majority of the borrowers i.e. 36 percent borrowers have taken

educational loans with moratorium period of 3 years.

8. PROCESSING FEES CHARGED:-

The data on processing fees charged to the borrowers for educational

loans is presented as follows:-

Table 4.13

Processing Fees charged

Processing Fees Charged Frequency Percentage

Yes 0 0

No 170 100

Total 170 100

The data is presented in the chart as follows:-

195
 Chart 4.13
Processing Fees Charged

120 ~--------------------~
CI)

-e
C)
m
cCI)
90
60
30
CI)
a. o
o +-----------~---
Yes No
Processing fees charged

Table 4.13 revealed that no Bank charged any processing fees to the

borrowers of educational loans. This indicates that as per the

guidelines of Reserve Bank of India, banks do not charge any

processing fees to the borrowers of educational loans.

9. RATE OF INTEREST CHARGED ON EDUCATIONAL LOANS:-

The rate of interest charged on educational loans taken by borrowers is

categorized into three groups viz. rate of interest between 8 and 10

percent, 10 and 12 percent and 12 percent and above. Accordingly,

the data collected from the borrowers is as follows:-

Table 4.14
Rate of Interest

Rate of Interest Charged Frequency Percentage

8% - 10% 15 9

10% - 12% 112 66

12% & Above 43 25

Total 170 100

196
The data is presented in the chart as follows:-

Chart 4.14
Rate of Interest

80
66
70
Q) 60

-
tJ)
co 50
cQ) 40
u 25
lo..
Q) 30
a.. 20 9
10
0
8% -10% 10% -12% 12% & Above
Rate of Interest

Table 4.14 revealed that out of 170 borrowers, 112 borrowers Le.66

percent of borrowers took educational loans which carried interest

between 10 and 12 percent. Whereas, 43 borrowers Le. 25 percent

took educational loans carrying interest rate above 12 percent. Only 15

borrowers i.e.9 percent borrowers took educational loans carrying

interest rate between 8 and 10 percent. Thus, majority of the borrowers

i.e. 66 of the borrowers took educational loans which carried moderate

rate of interest between 10 and 12 percent.

10. NATURE OF INTEREST:-

The nature of interest charged on the loan taken by borrowers for

educational loans is categorized into two groups viz. Fixed and

Floating. Accordingly, the data collected from the borrowers is as

follows:-

197
 Table 4.15
Nature of Interest

Nature Of Interest Frequency Percentage

Fixed 25 15

Floating 145 85

Total 170 100

The data is presented in the chart as follows:-

Chart 4.15
Nature of Interest

100
85
80
Q)

-
C)
as
I:
Q)
(,)
~
Q)
60

40
a. 15
20

0
Fixed Floating
Nature of Interest

Table 4.15 revealed that the out of 170 borrowers, 145 borrowers i.e.

85 percent of borrowers took educational loans carrying a floating rate

of interest whereas only 25 borrowers i.e. 15 percent of borrowers took

educational loans carrying a fixed rate of interest. Thus, majority of

borrowers i.e. 85 percent of the borrowers took educational loans

carrying floating rate of interest.

11. EXPENSES COVERED BY THE EDUCATIONAL LOANS:-

The data on the number of expenses covered by the educational loans

taken by borrowers is categorized into 8 groups viz. Fees, Deposits,

198
Books, Travelling, Hostel, Computers, Insurance and Study Tours.

Accordingly, the data collected from the borrowers is as follows:-

Table 4.16
Expenses covered by the Borrowers

Expenses Covered Response Frequency Percentages

Fees Yes 167 98
No 3 2
Total 170 100
Deposit Funds Yes 52 31
No 118 69
Total 170 100
Books Yes 72 42
No 98 58
Total 170 100
Travel Yes 28 16
No 142 84
Total 170 100
Hostel Yes 53 31
No 117 69
Total 170 100
Computers Yes 47 28
No 123 72
Total 170 100
Insurance premiums Yes 20 12
No 150 88
Total 170 100
Study Tours/Project Works Yes 9 5
No 161 95
Total 170 100

199
The data is presented in the chart as follows:-

Chart 4.16
Expenses covered by the Borrowers

120~------------------------------------'

100 98 88 95
84
CI> 80 69 72
69
-...
en
as
c
u
CI> 60
42
58

CI>
D.. 40 31 31 28
16 12
20
5
0 --
2
I I •
~I~I ~I~I ~I~I ~I~I ~I~I ~I~I ~I~I :,z
~Io
Fees Deposit Books Travel Hostel ~ompute nsurance Study
Funds Tours

Expenses covered

Table 4.16 revealed that out of eight expenses covered by educational

loans, 'Fees' has been paid as one of the major expenses by 167

borrowers i.e. 98 percent of borrowers out of 170 borrowers. This was

followed by another expense incurred on 'Books' which was covered

through educational loans by 72 borrowers i.e. 42 per cent of

borrowers. 53 borrowers i.e. 31 percent borrowers paid 'Hostel'

expenses through educational loans taken by them. 52 borrowers i.e.

31 percent of borrowers paid 'Deposit funds' expenses through

educational loans. 47 borrowers i.e. 28 percent of the borrowers paid

for 'Computer' expenses through educational loans. 28 borrowers i.e.

16 percent of the borrowers paid for Travel' expenses, 20 borrowers

i.e. 12 percent of the borrowers paid for 'Insurance' expenses and 9

200
borrowers i.e. 5 percent of the borrowers paid for 'Study tours/Project

work' expenses respectively. Thus, majority of borrowers paid for 'fees'

through educational loans taken by them in comparison to other

expenses for courses pursued by them.

12. SECURITY PROVIDED:-

The data collected from the borrowers on security provided by the

borrowers of educational loans has been as follows:-

Table 4.17
Security provided
Security Provided Frequency Percentages

No 139 82

Yes 31 18

Total 170 100

The data is presented in the chart as follows:-

Chart 4.17
Security provided

100
82
Q) 80

-m
ctI
cQ)
u
~
60
40
Q)
~
18
20
0
No Yes
Security Provided

201
Table 4.17 revealed that out of 170 borrowers, 139 borrowers i.e. 82

percent of borrowers did not provide any security on educational loans

taken by them. This is due to Reserve Bank of India's guidelines which

states that loans upto Rs.4 Lakhs does not require any security but co-

obligation of parents is required. Also, loan amount between Rs. 4 and

Rs. 7.5 Lakhs requires co-obligation of parents together with collateral

security in the form of suitable third party guarantee. Whereas loan

amount above Rs. 7.5 Lakhs requires co-obligation of parents together

with tangible collateral security of suitable value. The table also

revealed that only 31 borrowers i.e. 18 percent of borrowers provided

security on educational loans taken by them. Thus, majority of

borrowers were sanctioned educational loans without any security.

13. TYPE OF SECURITY PROVIDED:-

The type of security provided by borrowers is categorized into three

groups viz. No security, security provided in the form of third party

guarantee as collateral and tangible collateral security. Accordingly,

the data collected from the borrowers is presented as follows:-

Table 4.18
Type of security provided

Type of security provided Frequency Percentages

Nil 139 82

Guarantor as Collateral 8 5
Tangible property as
Collateral 23 13

Total 170 100

202
The data is presented in the chart as follows:-

Chart 4.18
Type of security provided

100
82
C1) 80
C)
S 60
I:
C1)
...
(.)
C1)
40
Q.
20 13
5
0
Nil Guarantor as Tangible
Collateral property as
Collateral
Type of Security

Table 4.18 revealed that out of 170 borrowers, 139 borrowers i.e. 82

percent of borrowers have not provided any security against

educational loans taken by them. 23 borrowers i.e. 13 percent of

borrowers provided tangible collateral security of suitable value. Only 8

borrowers i.e. 5 percent of the borrowers provided security in the form

of third party guarantee. Thus, majority of borrowers did not provide

with any security for educational loans taken by them.

14. TIME TAKEN FOR PROCESSING AND SANCTIONING LOANS:-

The time taken for processing and sanctioning of educational loans by

the banks is categorized into three groups viz. Prompt (1 to 20 days),

Moderate (21 to 45 days) and Lengthy (45 days and above).

Accordingly, the data collected from the borrowers is as follows:-

203
 Table 4.19
Time taken for Processing and Sanctioning loans

Time Taken for Processing &

Sanctioning The Loan Frequency Percentages
Prompt(1-20 days) 115 68

Moderate(21-45 days) 55 32

Lengthy (45days & above) 0 0

Total 170 100

The data is presented in the chart as follows:-

Chart 4.19
Time taken for Processing and Sanctioning loans

80
68
Q)
tn
60
SI:
Q) 40
~
Q)
a. 20
0
0
Prompt Moderate Lengthy
(1-20 days) (21-45 days) (45days &
above)
Time taken for processing loans

Table 4.19 revealed that the time taken for processing and sanctioning

educational loans for 115 borrowers i.e. 68 percent of borrowers was

'Prompt' i.e. within 1 to 20 days. The time taken for processing and

sanctioning educational loans for 55 borrowers i.e. 32 percent of

borrowers was 'Moderate' i.e. within 21 to 45 days. No bank took more

than 45 days for processing and sanctioning educational loans. Thus,

204
majority borrowers' loan applications were processed and sanctioned

promptly.

15. SUPPORT PROVIDED BY EDUCATIONAL LOAN TO PURSUE

HIGHER EDUCATION:-

The views of the borrowers related to 'whether educational loans taken

by them helped them in securing higher education' is as follows:-

Table 4.20
Support provided by Educational loan to pursue Higher Education

Whether Educational Loan has helped Frequency Percentages

in Higher Studies
No 0 0

Yes 170 100

Total 170 100

The data is presented in the chart as follows:-

Chart 4.20
Support provided by Educational loan to pursue Higher Education

120
100
100
CI) 80

-...
m
CIS
£:
CI)
Co)
60
40
CI)
a.. 20
0
No Yes
Responses

205
Table 4.20 revealed that all 170 borrowers who took educational loans

agreed that educational loans supported and helped them in pursuing

higher education. Thus, nationalized banks play an important role in

supporting higher education through educational loans.

16. RESPONSES ON WHETHER EDUCATIONAL LOANS

COVERED ALL COURSE EXPENSES:-

The views of the borrowers about 'whether the borrowers met all the

course expenses through educational loans taken by them' are

presented as follows:-

Table 4.21
Responses on Course expenses covered
Whether Loan covered course Frequency Percentages
expenses
Strongly agree 131 77

Agree 24 14

Neither Agree nor Disagree 0 0

Disagree 13 8

Strongly disagree 2 1

Total 170 100

The data is presented in the chart as follows:-

206
 Chart 4.21
Responses on Course expenses covered

100

80 77

CI)
60
-
C)
co
c
CI)
(.) 40
~
CI)
a.
20

0
Strongly Agree Neither Disagree Strongly
agree Agree nor disagree
Disagree

Responses on whether loan met course expenses

Table 4.21 revealed that out of 170 borrowers, 131 borrowers i.e. 77

percent of borrowers 'strongly agreed' to the statement that

'educational loans taken by them covered all the expenses incurred

towards the course pursued'. Whereas, 24 borrowers i.e. 14 percent of

borrowers 'agreed' to the statement. However, 13 borrowers i.e. 8

percent of the borrowers 'disagreed' to the statement whereas 2

borrowers i.e. 1 percent of the borrowers 'strongly disagreed' to the

statement. Thus, majority of borrowers feel that educational loans

taken by them covered all the course expenses.

17. RESPONSES ON INTEREST CHARGED:-

The views of the borrowers about 'whether the interest charged on

educational loans is high' are as follows:-

207
 Table 4.22
Responses on interest charged on loans
Whether Interest Rate charged is
High Frequency Percentages
Strongly agree 1 1

Agree 37 22

Neither Agree nor Disagree 2 1

Disagree 64 37

Strongly disagree 66 39

Total 170 100

The data is presented in the chart as follows:-

Chart 4.22
Responses on interest charged on loans

60 ~-------------------------------------,

CD 40
en
S
c
CD
~ 20
CD
a..

1
o +-----~-
Strongly Agree Neither Disagree Strongly
agree Agree nor disagree
Disagree

Responses on whether interest charged on loans is

high

Table 4.22 revealed that out of 170 borrowers, 66 borrowers i.e. 39

percent of borrowers 'strongly disagreed' to the statement that 'high

interest was charged on educational loans taken by them'. 64

208
borrowers Le.37 percent of borrowers 'disagreed' to the statement that

'high interest was charged on educational loans taken by them'. Only 1

borrower 'strongly agreed' to the statement whereas 37 borrowers Le.

22 percent of borrowers 'agreed' to the statement and felt that they

were charged a high rate of interest on educational loans. 2 borrowers

Le. 1 percent of the borrowers 'neither agreed nor disagreed' to the

statement. Thus, majority of borrowers Le. 130 borrowers felt that they

were not charged with a high rate of interest on educational loans

taken by them.

18. TYPES OF PROBLEMS FACED WHILE TAKING LOANS:-

The views of the borrowers regarding the problems faced by them

while obtaining educational loans is presented as follows:-

209
 Table 4.23

Types of problems faced while taking educational loans

Problems Faced Response Frequency Percentages

Security Yes 4 2

No 166 98

Total 170 100

Margin Money Yes 18 11

No 152 89

Total 170 100

Guarantor Yes 4 2

No 166 98

Total 170 100

Documentation Yes 3 2

No 167 98

Total 170 100

Repayment Tenure Yes 1 1

No 169 99

Total 170 100

Valuation of collateral Yes 1 1

No 169 99

Total 170 100

The data is presented in the chart as follows:-

210
 Chart 4.23
Types of problems faced while taking educational loans

120
98 98 98 99 99
100 89

CP 80

-...
C)
CIS
c:
CP
()
60
CP
0. 40

20 11

0 -
2

Yes I No I
I
Yes I No I
2
-I
Yes No I
-
2

Yes Nol
1

I I
Yes No
1

Yes I No
Security Margin Guarantor Documentatior Repayment Valuation
Money Tenure of
collateral
Types of problems faced while taking loans

Table 4.23 revealed that out of 170 borrowers, 166 borrowers i.e.98

percent of borrowers felt that providing 'Security' was not a problem

while obtaining educational loans whereas only 4 borrowers i.e. 2

percent of the borrowers felt that it was a problem for them. 152

borrowers i.e. 89 percent of borrowers felt that providing 'Margin

Money' was not a problem for them whereas only 18 borrowers i.e. 11

percent of the borrowers felt that it was a problem while obtaining

educational loans. 166 borrowers i.e. 98 percent of borrowers felt that

providing a 'Guarantor' was not a problem while taking educational

loans whereas only 4 borrowers i.e. 2 percent of the borrowers felt that

it was a problem. 167 borrowers i.e. 98 percent of borrowers felt that

'Documentation' was not a problem while taking educational loans

211
whereas only 3 borrowers i.e. 2 percent of the borrowers felt that it was

a problem. 169 borrowers i.e. 99 percent of borrowers were

comfortable with the 'Repayment tenure' of educational loans taken

and that it was not a problem for them while only 1 borrower i.e. 1

percent of the borrowers felt that it was problem. 169 borrowers i.e. 99

percent of borrowers felt that 'Valuation of tangible collateral' was not a

problem while taking educational loans whereas only 1 borrower i.e. 1

percent of the borrowers felt that it was a problem. Thus, majority of

borrowers did not face many problems while obtaining educational

loans from nationalized banks.

19. Number of Problems faced while taking educational loans:-

The problems faced while obtaining educational loans is categorized

into 6 groups viz. security, margin money, guarantor, documentation,

repayment tenure and valuation of tangible collateral. Accordingly, out

of these, the views of borrowers regarding number of problems faced

by them while taking educational loans is presented as follows:-

Table 4.24
Number of Problems faced while taking loans
No. Of Problems Faced while
Obtainina the Loan Frequency Percentaaes

0 146 86

1 19 11

2 3 2

3 2 1

Total 170 100

212
The data is presented in the chart as follows:-

Chart 4.24
Number of Problems faced while taking loans

100
86
80
CD
en
Sc 60
CD
...CD
(,)
40
c..
20
2 1
0
0 1 2 3
Number of Problems faced

Table 4.24 revealed that out of 170 borrowers, 146 borrowers i.e. 86

percent of borrowers did not face any problems while obtaining

educational loans. 19 borrowers i.e.11 percent of borrowers faced one

out of six problems viz. security, margin money, guarantor,

documentation, repayment tenure and valuation of tangible collateral.

Whereas 3 borrowers i.e. 2 percent of the borrowers faced two out of

six problems and only 2 borrowers i.e. 1 percent of the borrowers faced

three out of six problems while obtaining educational loans. Thus,

majority of borrowers did not face any problems while obtaining

educational loans.

20. CONCESSIONS RECEIVED ON EARLY REPAYMENT OF

LOANS:-

All Banks provided 1% concession in interest if loans are repaid before

repayment tenure starts. The responses of borrowers on whether they

213
received any interest concessions on early repayment of educational

loans taken by them are presented as follows:-

Table 4.25

Interest concession received on early loan repayment

Responses Frequency Percent

No 62 36

Yes 108 64

Total 170 100

The data is presented In the chart as follows:-

Chart 4.25

Interest Concessions received on early loan repayment

70
60
CI) 50

-
m
co
c
CI)
(.)
J".
CI)
40
30
36

a. 20
10
0
No Yes
Concessions received if loan is repaid early

Table 4.25 revealed that out of 170 borrowers, 108 borrowers Le.64

percent of the borrowers received interest concessions as they repaid

loans earlier than repayment tenure. Whereas, 62 borrowers i.e. 36

percent of borrowers did not receive any interest concessions as they

did not repay loans earlier than repayment tenure. Thus, majority of

214
borrowers received interest concessions on educational loans as they

repaid the educational loans earlier than repayment tenure.

21. FAILURE TO MAKE REPAYMENT ON TIME:-

The views of borrowers on whether they failed to make repayment of

educational loans taken by them on time are as follows:-

Table 4.26

Failure to make repayment

Failed to make repayment Frequency Percent

anytime
No 170 100

Yes 0 0

Total 170 100

The data is presented in the chart as follows:-

Chart 4.26

Failure to make repayment

120~------------------------------------------------------------~
100
100
CD
C) 80
S
; 60
~
CD 40
a.
20
o
0+---
No Yes

Failure to make repayment anytime

215
Table 4.26 revealed that all 170 borrowers did not fail anytime to make

repayment of educational loans taken by them. Thus, all borrowers

made timely repayment of educational loans taken by them.

22. RESPONSES OF BORROWER'S SATISFACTION TOWARDS

THE BANK:-

The views of borrowers regarding whether they were satisfied with the

Bank in terms of granting of educational loans is as follows:-

Table 4.27
Borrowers' satisfaction towards the Bank

Responses Frequency Percent

Strongly satisfied 158 93

Satisfied 11 6

Neither satisfied nor dissatisfied 1 1

Dissatisfied 0 0

Strongly dissatisfied 0 0

Total 170 100

The data is also presented in the chart as follows:-

216
 Chart 4.27
Borrowers' satisfaction towards the Bank

100
90
80
70
CI)

60
-
C)
co
t:
CI) 50
0
L.
CI) 40
a..
30
20
10 1 0 0
0
Strongly Satisfied Neither Dissatisfied Strongly
satisfied satisfied nor dissatisfied
dissatisfied

Responses on whether satisfied with the bank

Table 4.27 revealed that out 170 borrowers, 158 borrowers i.e. 93

percent of borrowers were 'strongly satisfied' with the bank in terms of

granting of educational loans. 11 borrowers i.e. 6 percent of borrowers

were 'satisfied' with the bank in terms of granting of educational loans.

Only 1 borrower i.e.1 percent of the borrowers was 'neither satisfied

nor dissatisfied' with the bank in terms of granting of educational loans.

Zero percent i.e. nobody felt 'dissatisfied' or 'strongly dissatisfied' with

the bank in terms of granting of educational loans. Thus, majority of

borrowers were 'strongly satisfied' with the banks in terms of granting

of educational loans.

217
 DATA ANALYSIS - Part III
(PRIMARY DATA - BANKERS' RESPONSES):-

4.2 INTRODUCTION:

The primary data has been collected from the bank managers of the

nationalized banks within Mumbai region. The data has been collected

with the help of a well designed structured questionnaire having open-

ended and close-ended questions. The researcher personally visited

the banks on random basis to get the responses of Bank Managers on

the educational loan scheme. The data was collected from 11

respondents within a period of 1 month i.e. August 2009. The primary

data collected from the bank managers are analyzed as follows:-

1. ESSENTIALITY OF RBI's MODEL EDUCATIONAL LOAN

SCHEME:-
The responses of bank managers on the essentiality of Reserve Bank

of India's Model Education Loan scheme in supporting higher

education in India is presented as follows:-

Table No. 4.28

Essentiality of "RBI's Model Educational Loan Scheme"
Response Frequency Percent

Highly Essential 8 73

Essential 3 27

Moderately Essential 0 0

Not Essential 0 0

Can't Say 0 0

Total 11 100

218
 The data is presented in the Chart as follows:-

Chart No.4.28
Essentiality of "RBI's Model Educational Loan Scheme"

80
70
CD 60

-
tn
as
c
CD
....
(,)
50
40
CD 30
Il..
20
10
o o o
0
Highly Essential Moderately Not Can't Say
Essential Essential Essential
Responses

Table No.4.28 reveals that 8 bank managers i.e. 73 percent of the bank

managers feel that the RBI's Model Educational Loan Scheme is

'highly essential' to support higher education in India. While 3 bank

managers i.e.27 percent of the bank managers feel that the model

educational loan scheme is 'essential' to support higher education in

India. Thus, majority of the bank managers are of the opinion that

'RBI's Model Educational Loan Scheme' is highly essential for

supporting higher education in India.

2. SUPPORTIVENESS OF RBI REGULATIONS FOR EDUCATIONAL

LOANS:-

The responses of bank managers on the whether RBI regulations

support higher education through educational loans is presented as

follows:-

219
 Table No. 4.29
RBI's regulations supporting Higher Education in India
Responses Frequency Percent

Strongly Supports 7 64

Supports 4 36

Moderately Supports 0 0

Does Not Support 0 0

Can't Say 0 0

Total 11 64

The data is presented in the Chart as follows:-

Chart 4.29
RBI's regulations supporting Higher Education in India

80
70 64
Q) 60

-...
tn
cu 50
c
Q) 40
(.)
Q) 30
a.
20
10
0 0
0
Strongly Supports Moderately Does Not Can't Say
Supports Supports Support
Responses

Table No. 4.29 revealed that 7 bank managers i.e.64 percent of the

bank managers were of the opinion that the RBI's regulations 'strongly

support' educational loans. Whereas 4 bank managers i.e. 36 percent

220
of the bank managers believed that the RBI's regulations 'supports'

educational loans. Therefore, majority of the bank managers are of the

opinion that RBI's regulations strongly support Educational loans.

3. PROBLEMS FACED BY BANK MANAGERS WHILE ISSUING

EDUCATIONAL LOANS:-

The responses on the problems faced by the bank managers while

granting educational loans is presented as follows:-

(i) PROBLEMS IN FOLLOWING GUIDELINES STRICTLY:-

The responses on the problems faced by bank managers in following

guidelines issued by Reserve Bank of India is presented as follows:-

Table 4.30

Problem in following guidelines strictly

Responses Frequency Percent

Always 0 0

Frequently 0 0

Sometimes 4 36

Never 7 64

Can't Say 0 0

Total 11 100

The data is presented in the Chart as follows:-

221
 Chart 4.30
Problem in following guidelines strictly

70
60
50

-
CD
C)
CIS
c 40
CD
()
~ 30
CD
a..
20
10
o o o
0
Always Frequently Sometimes Never Can't Say

Responses

Table No. 4.30 revealed that 7 bank managers i.e.64 percent of the

bank managers 'never' faced any problem with the guidelines while

issuing educational loans. 4 bank managers i.e. 36 percent of the bank

managers felt that they experienced problem with the guidelines

'sometimes'. Thus, it can be concluded that most bank managers

'never' faced any problem regarding the RBI guidelines while issuing

loans.

(ii) APPLICANT'S UNAWARENESS REGARDING EDUCATIONAL

LOANS:-

The responses on the problems faced by the bank managers regarding

applicant's unawareness about educational loan scheme are presented

as follows:-

222
 Table 4.31
Problem of Applicant's Unawareness regarding
Educational Loan Scheme

Responses Frequency Percent

Always 0 0

Frequently 2 18

Sometimes 5 46

Never 4 36

Can't Say 0 0

Total 11 100

The data is presented in the Chart as follows:-

Chart 4.31

Problem of Applicant's Unawareness regarding

Educational Loan Scheme

60
50 46
CI)
40
-
C)
C'lS
s:::
CI)
(.)
30
'-
CI)
Il. 20
10
o o
0
Always Frequently Sometimes Never Can't Say

Responses

Table 4.31 that 5 bank managers i.e. 46 percent of the bank managers

'sometimes' faced the problem of unawareness of applicants in

providing educational loans. 4 bank managers i.e. 36 percent of the

223
bank managers have 'never' faced any problem in this regard, and 2

bank managers Le.18 percent of the bank managers 'frequently' faced

problems due to unawareness of applicants while providing educational

loans. Thus, it can be concluded that majority of bank managers Le. 82

percent of bank managers face the problem of unawareness on the

part of the borrowers 'sometimes' or 'never'.

(iii) PROBLEM OF PROVIDING SECURITY:-

The responses on the problems faced by the bank managers regarding

provision of security by borrowers while issuing educational loans are

presented as follows:-

Table No. 4.32

Problem of Providing Security
Responses Frequency Percent

Always 1 9

Frequently 1 9

Sometimes 6 55

Never 3 27

Can't Say 0 0

Total 11 100

The data is presented in the chart as follows:-

224
 Chart No. 4.32
Problem of Providing Security

60 ~--------------------------------------~

40
CD
C)
.sc
CD
~
CD
20
a..

o
Always Frequently Sometimes Never Can't Say

Responses

Table 4.32 revealed that 6 bank managers i.e. 55 percent of bank

managers 'sometimes' faced problems regarding provision of security

by borrowers while giving educational loans. 3 bank managers i.e. 27

percent bankers claimed to have 'never' faced any problems with

providing security by borrowers for educational loans, whereas 1 bank

manager each i.e. 18 percent of the bank managers faced problems

either 'always' or 'frequently' while providing security by borrowers for

an educational loan. Thus, it can be concluded that majority of bank

managers i.e. 82 percent of bank managers face problems while

asking borrowers to provide securities for loans 'sometimes' or 'never'.

(iv) PROBLEM OF MARGIN MONEY:-

The responses on the problems faced by the bank managers

regarding provision of margin money by the borrowers while issuing

educational loans are presented as follows:-

225
 Table 4.33
Problem of Margin Money
Responses Frequency Percent

Always 0 0

Frequently 0 0

Sometimes 5 45

Never 6 55

Can't Say 0 0

Total 11 100

The data is presented in the chart as follows:-

Chart No. 4.33

Problem of Providing Margin Money

60 ~--------------------------------------~

Q)
40
C)
Sc:
Q)

e
Q)
20
Il.

o o
o +-------~------~~
Always Frequently Sometimes Never Can't Say

Responses

Table 4.33 revealed that 6 bank managers i.e.55 percent of the bank

managers 'never' faced any problems regarding provision of margin

money by the borrowers while providing educational loans whereas 5

226
bank managers 45 percent of the bank managers faced problems

'sometimes'. Thus, it can be concluded that majority of bankers face

problems either 'sometimes' or 'never' while asking to provide margin

money for loans by borrowers.

(v) PROBLEM OF PREPARING DOCUMENTS:-

The responses on the problems faced by the bank managers for

preparing documents while issuing educational loans are presented as

follows:-

Table 4.34

Problem of preparing documents

Responses Frequency Percent

Always 0 0

Frequently 0 0

Sometimes 4 36

Never 7 64

Can't Say 0 0

Total 11 100

The data is presented in the chart as follows:-

227
 Chart 4.34
Problem of preparing documents

80
64
60

-
CD
C)
CIS
c:::
40
CD
,.,.
(,)

CD
a. 20

0 0
0
Always Frequently Sometimes Never Can't Say

Responses

Table 4.34 revealed that 7 bank managers i.e. 64 percent of the bank

managers 'never' faced any problems with regard to preparation of

documents while providing educational loans whereas 4 bank

managers i.e. 36 percent of the bank managers faced problems

'sometimes' in this regard. Thus, it can be concluded that most bank

managers did not face problems while preparing documents while

issuing educational loans.

(vi) PROBLEM OF VALUATION OF ASSETS/COLLATERAL

SECURITIES:-

The responses on the problems faced by the bank managers for

preparing documents while issuing educational loans are presented as

follows:-

228
 Table 4.35
Problem of Valuation of Assets/Collateral
Responses Frequency Percent

Always 0 0

Frequently 0 0

Sometimes 4 36

Never 7 64

Can't Say 0 0

Total 11 100

The data is presented in the chart as follows:-

Chart 4.35
Problem of Valuation of Assets/Collateral

80
64
60

-...
CI)
C)
as
cCI) 40
(,)
CI)
a.. 20

0 0
0
PJways Frequently Sometimes Never Can't Say
Responses

Table 4.35 revealed that 7 bank managers i.e.64 percent of the bank

managers 'never' faced any problems with valuation or calculating the

net worth of assets or collateral of the securities of the borrowers while

229
providing educational loans whereas 4 bank managers i.e. 36 percent

of the bank managers faced problems 'sometimes' in this regard. Thus,

it can be concluded that most bank managers never faced any

problems while calculating the net worth of assets or collateral provided

by the borrower in the process of issuing educational loans.

(vii) PROBLEM OF TRACING THE BORROWERS:-

The responses on the problems faced by the bank managers regarding

tracing the borrowers after issuing educational loans are presented as

follows:-

Table 4.36
Problem of tracing the borrowers
Responses Frequency Percent

Always 0 0

Frequently 0 0

Sometimes 9 82

Never 2 18

Can't Say 0 0

Total 11 100

The data is presented in the chart as follows:-

230
 Chart 4.36
Problem of tracing the borrowers

100
82
80
CD
60
-
C)
co
c
CD
0
40
"-
CD
a.. 20
0 0
0
Always Frequently Sometimes Never Can't Say

Responses

Table 4.36 revealed that 9 bank managers i.e. 82 percent of the bank

managers 'sometimes' faced problems of tracing borrowers after

providing educational loans whereas only 2 bank managers Le.18

percent of the bank managers 'never' faced any problems. Thus, it can

be concluded that majority of bank managers sometimes faced the

problem of tracing the borrowers after issuing educational loans.

4. FACTORS RESPONSIBLE FOR NON-PERFORMING ASSESTS

(NPAs ):-

The responses of the bank managers regarding the factors responsible

for NPAs in educational loans provided by banks are presented as

follows:-

231
(i) COMPULSION TO PROVIDE EDUCATIONAL LOANS AS PER

RBI GUIDELlNES:-

The responses of the bank managers on the factor responsible for

NPAs in Educational loans i.e. 'compulsion to provide educational

loans as per the RBI guidelines' are presented as follows:-

Table 4.37
NPA Factor "Compulsion to provide loans as per the guidelines"
Responses Frequency Percent

No 9 82

Yes 2 18

Total 11 100

The data is presented in the chart as follows:-

Chart 4.37
NPA Factor "Compulsion to provide loans as per the guidelines"

100
82
80
CI)

-
m 60
co
c
CI)
Co)
40
r-
CI)
c.. 20 18

0
No Yes
Responses

Table 4.37 revealed that 9 bank managers i.e.82 percent of the bank

managers did not feel compulsion to provide loans as per the RBI

guidelines as a factor for NPAs in educational loans whereas only 2

232
bank managers i.e.18 percent of the bank managers felt otherwise.

Thus, it can be concluded that majority of bank managers do not feel

that compulsion to provide loans by the guidelines is a factor

contributing to the NPA of loans.

(ii) LACK OF FOLLOW-UP ACTION BY BANK:-

The responses of the bank managers on the factor responsible for

NPAs in Educational loans i.e. 'lack of follow-up action by the bank' is

presented as follows:-

Table 4.38
NPA Factor "Lack of follow-up action by the bank"
Responses Frequency Percent

No 9 82

Yes 2 18

Total 11 100

The data is presented in the chart as follows:-

Chart 4.38
NPA Factor "Lack of follow-up action by the bank"

100
82
80
CD

-
tn
ca
s::::
CD
u
"-
60
40
CD
D.. 20

0
No Yes
Responses

233
Table 4.38 revealed that 9 bank managers Le.82 percent of the bank

managers did not feel that 'lack of follow-up actions taken by the bank'

is a factor for NPAs in Educational loans whereas only 2 bank

managers Le.18 percent of the bank managers felt otherwise. Thus, it

can be concluded that majority of bank managers feel that lack of

follow-up actions by the bank is not a major factor contributing to the

N PA of loans.

(iii) LACK OF FOLLOW-UP BY THE BORROWER:-

The responses of the bank managers on the factor responsible for

NPAs in Educational loans i.e. 'lack of follow-up action by the borrower'

is presented as follows:-

Table 4.39

NPA Factor "Lack of follow-up by the borrower"

Responses Frequency Percent

No 1 9

Yes 10 91

Total 11 100

The data is presented in the chart as follows:-

234
 Chart 4.39
NPA Factor "Lack of follow-up by the borrower"

100

80
CI)

-en 60
cu
cCI)
u 40
'-
CI)
Il.
20
9
0
No Yes
Responses

Table 4.39 revealed that 10 bank managers Le.91 percent of the bank

managers felt that lack of follow-up by the borrower was an important

factor for NPAs in Educational loans whereas only 1 manager i.e. 9

percent of the bank managers felt otherwise. Thus, it can be concluded

that majority of bank managers think that lack of follow-up by the

borrowers is a major factor contributing to the NPA of educational

loans.

(v) ACTION TAKEN IN CASE OF DEFAULT:-

The responses of the bank managers on the actions taken by them in

case of a default in repayment of the loans by the borrowers are

presented as follows:-

(i) ACTION OF SENDING NOTICES/REMINDERS:-

The responses of the bank managers on the action of sending

notices/reminders to the borrowers in case of default in repayment of

the loans by the borrowers is presented as follows:-

235
 Table 4.40
Action of Sending Notices/Reminders
Responses Frequency Percent

Always 9 82

Often 0 0

Sometimes 1 9

Rarely 1 9

Never 0 0

Total 11 100

The data is presented in the chart as follows:-

Chart 4.40
Action of Sending Notices/Reminders

100~----------------------------------~

82
80
CI)

-C)
CIS
C
CI)
(,)
'-
60

40
CI)
Q.
20 9
9
0
0
Always Often Sometimes Rarely Never
Responses

Table 4.40 revealed that 9 bank managers Le.82 percent of the

bankers 'always' send reminders or notices as a form of action against

default of loan repayment. Whereas 1 bank manager each Le.18

236
percent of the bank managers send notices or reminders upon default

of a loan repayment 'rarely' or 'sometimes' only. Thus, it can be

concluded that majority of bank managers 'always' resort to sending

notices/reminders upon default of repayment of the loan repayment.

(ii) ACTION OF SENDING OFFICE STAFF FOR FOLLOW-UP:-

The responses of the bank managers on the action of sending office

staff to borrower's place for follow-up in case of default in repayment of

the loans by the borrowers is presented as follows:-

Table 4.41
Action of sending office staff for follow-up
Responses Frequency Percent

Always 1 9

Often 2 18

Sometimes 4 36

Rarely 4 36

Never 0 0

Total 11 100

The data is presented in the chart as follows:-

237
 Chart 4.41
Action of sending office Staff for follow-up

40 ~--------------------------------------~

30
CD
C)

oSc:: 20
CD
(.)
"-
CD 10
a..
o
o
PJways Often Sometimes Rarely Never

Responses

Table 4.41 revealed that 4 bank managers each i.e.72 percent of the

bank managers send 'sometimes' or 'rarely' their office staff for a

follow-up as a form of action against default of loan repayment.

Whereas 2 bank managers i.e. 18 percent of the bank managers take

this action upon default of a loan repayment 'often' and only 1 bank

manager i.e. 9 percent of bank managers 'always' sends office staff for

follow up regularly on default of repayment of loan. Thus, it can be

concluded that majority of bank managers i.e. 72 percent of bank

managers resort to sending office staff for a follow-up action upon

default of loan repayment either 'sometimes' or 'rarely'.

(iii) ACTION OF COMPROMISE:-

The responses of the bank managers on the action of compromising in

case of default in repayment of the loans by the borrowers are

presented as follows:-

238
 Table 4.42
Action of Compromise
Responses Frequency Percent

Always 0 0

Often 0 0

Sometimes 3 27

Rarely 2 18

Never 6 55

Total 11 100

The data is presented in the chart as follows:-

Chart No. 4.42

Action of Compromise

60 ~----------------------------------------~

40
CD

-
C)
as
t:
CD
0
"-
CD 20
a.

0
0
Always Often Sometimes Rarely Never

Responses on whether interest charged on loans is

high

Table 4.42 revealed that 6 bank managers i.e.55 percent of the bank

managers 'never' compromised as a form of action against default of

loan repayment. Whereas 2 bank managers i.e.18 percent of the bank

239
managers 'rarely' compromise upon default of a loan repayment and 3

bankers i.e. 27 percent of bank managers chose to compromise on

default only 'sometimes'. Thus, it can be concluded that majority of

bankers choose 'never' to compromise when the borrower defaults on

a loan repayment.

(iv) ACTION OF LEGAL PROCEEDINGS:-

The responses of the bank managers on the action of initiating legal

proceedings against the borrowers in case of default in repayment of

the loans by the borrowers are presented as follows:-

Table 4.43
Action of Legal Proceedings
Responses Frequency Percent

Always 0 0

Often 1 9

Sometimes 3 27

Rarely 1 9

Never 6 55

Total 11 100

The data is presented in the chart as follows:-

240
 Chart 4.43
Action of Legal Proceedings

60 ~-------------------------------------------,

40
CI)
C')
Ss::
CI)

e
CI) 20
a.

o +---~----.---
Always Often Sometimes Rarely Never

Responses

Table 4.43 revealed that 6 bank managers i.e.55 percent of the bank

managers 'never' took up legal proceedings as a form of action against

default of loan repayment. Whereas 3 managers Le. 27 percent of the

bank managers resorted to legal action 'sometimes' when the

borrowers default on loan repayment. 1 bank manager Le.9 percent of

bank managers mentioned that their bank took up legal proceedings

'often' while another bank manager Le. another 9 percent of bank

managers mentioned that their bank took up legal proceedings 'rarely'

upon default of loan repayment by borrowers. Thus, it can be

concluded that majority of bank managers 'never' initiate legal

proceedings against the borrower when he/she defaults on a loan

repayment.

241
6. PERCENTAGE OF BORROWERS MAKING EARLY

REPAYMENT:-

The responses of the bank managers on the percentage of the

borrowers making an early repayment of the loan amount borrowed are

presented as follows:-

Table 4.44
Percentage of borrowers making early repayment
Borrowers making early Frequency Percent

repayment (in Percent)

0 2 18

5 3 28

10 1 9

15 1 9

20 1 9

25 2 18

30 1 9

Total 11 100

The data is presented in the chart as follows:-

242
 Chart 4.44

Percentage of borrowers making early repayment

40

30 28
CI)

-...
C)
co
r::
20
CI)
()
CI)
£:L 10

0
o 5 10 15 20 25 30

Responses

Table 4.44 revealed that 3 bank managers i.e. 28 percent of bank

managers stated that around 5 percent of educational loan borrowers

in their bank made early repayments. 2 bank managers i.e. 18 percent

of the bank managers mentioned that no borrower made early

repayment of educational loans in their bank. 2 bank managers i.e. 18

percent of the bank managers stated that around 25 percent of

borrowers of educational loans made early repayments in their banks.

Whereas, 4 bank managers each i.e. 9 percent of the managers each

mentioned that in their respective banks, around 10 percent, 15

percent, 20 percent and as high as 30 percent of their borrowers made

early repayments. Thus, it can be concluded that the percentage of

borrowers of educational loans making early repayments varies from

bank to bank.

243
7. PERCENTAGE OF BORROWERS DEFAULTING ON LOAN

REPAYMENT:-

The responses of the bank managers on the percentage of the

borrowers defaulting on loan repayment are presented as follows:-

Table 4.45
Percentage of borrowers defaulting loan repayment
Borrowers defaulting in making Frequency Percent
repayment of loans (in Percent)
0 2 18

5 1 9

10 2 18

20 1 9

25 2 18

30 1 9

50 1 9

60 1 9

Total 11 100

The data is presented in the chart as follows:-

244
 Chart 4.45
Percentage of Borrowers default in making repayment

30~------------------------------------~

CI) 20
C)
S
c
CI)

e
CI)
10
£:L

o
o 5 10 20 25 30 50 60

Responses

Table 4.45 revealed that 2 bank managers i.e. 18 percent of the bank

managers stated that zero percent of borrowers of educational loans

default in making repayment of loans in their bank. 2 bank managers

i.e. 18 percent of the bank managers each mentioned that around 10

percent and 25 percent of educational loan borrowers in their

respective banks defaulted in making repayments on time. 3 bank

managers i.e. 9 percent of the bank managers each mentioned a very

high percentage of borrowers defaulting in making repayment of loans

viz. around 30 percent, and as high as 50 percent and 60 percent

respectively in their respective banks. Thus, it can be concluded that

percentage of borrowers defaulting loan repayment varies from bank to

bank.

8. INSURANCE COVER FOR BORROWERS:-

The responses of the bank managers on the insurance cover taken by

banks for their borrowers are presented as follows:-

245
 Table 4.46
Insurance Cover taken for Borrowers
Responses Frequency Percentage
Loan Amount
No 8 73
Upto Rs.4 lakhs
Yes 3 27
Total 11 100
Between Rs. 4 Lakhs to No 7 64
Rs. 7.5 lakhs.
Yes 4 36
Total 11 100
No 6 55
Above 7.5 lakhs
Yes 5 45
Total 11 100

The data is presented in the chart as follows:-

Chart 4.46
Insurance Cover taken for Borrowers

100
80 73
64
60 55
45
-
CI)
C)
as 36
t: 40 27
CI)
0
J..
CI)
20
a.
0
Yes Yes Yes

Upto Rs.4lakhs Rs.4 Lakhs to Above 7.5lakhs

Rs. 7.5 lakhs.

Responses

Table 4.46 revealed that 8 bank managers i.e.73 percent of bank

managers mentioned that their bank did not take insurance cover for

loan amount upto Rs.4 Lakhs whereas 3 bank managers i.e. 27

246
percent of bank managers stated that their bank took insurance cover

for loan amount upto Rs.4 Lakhs. 7 bank managers i.e. 64 percent of

bank managers mentioned that their bank did not take insurance cover

for loan amount between Rs. 4 Lakhs and Rs.7.5 Lakhs whereas 4

bank managers i.e. 36 percent of bank managers mentioned that their

bank did so. For loan amount above Rs.7.5 lakhs, 6 bank managers

i.e. 55 percent of bank managers mentioned that their bank did not

take insurance cover while other 5 bank managers i.e. 45 percent of

bank managers mentioned that their bank did take insurance cover for

the same. Thus, it can be concluded from the above data that overall

most banks do not take insurance cover for their borrowers.

9. SUGGESTIONS TOWARDS RBI REGULATIONS:-

The suggestions of the bank managers on the changes required (if

any) in the Reserve Bank of India's regulations regarding educational

loans are presented as follows:-

(i) SUGGESTIONS FOR CHANGE IN LIMIT OF LOAN AMOUNT FOR

STUDIES IN INDIA:-

As per the Model educational loan scheme 2004-2005, the maximum

amount of loan for studies in India is limited to Rs.10 Lakhs. The

responses of the bank managers on the changes required (if any)

towards the limit of the loan amount for educational loans for studying

in India are presented as follows:-

247
 Table 4.47
Suggestions for changes in loan amount limit for studies in India
Responses Frequency Percent

No Change 10 91

Increase 1 9

Decrease 0 0

Total 11 100

The data is presented in the chart as follows:-

Chart 4.47
Suggestions for changes in loan amount limit for studies in India

100

80
CD

-
tn
CIS
£:
CD
(J
~
60

40
CD
a. 20
o
0
No Change Increase Decrease
Responses

Table 4.47 revealed that 10 bank managers i.e. 91 percent of the bank

managers suggested that there should be 'no change' in the loan

amount limit for studies in India, whereas 1 bank manager i.e.9

percent of bank managers suggested that there should be an 'increase'

in the loan limit for studies in India. Thus, it can be concluded that

majority of the bankers 'do not' suggest any change in the loan amount

limits for studies in India.

248
(ii) SUGGESTIONS FOR CHANGE IN LIMIT OF LOAN AMOUNT

FOR STUDIES ABROAD:-

As per the Model educational loan scheme 2004-2005, the maximum

amount of loan for studies abroad is limited to Rs.20 Lakhs. The

responses of the bank managers on the changes required (if any)

towards the limit of the loan amount for educational loans for studying

abroad are presented as follows:-

Table 4.48
Suggestions for changes in loan amount limit for studies abroad

Responses Frequency Percent

No Change 9 82

Increase 2 18

Decrease 0 0

Total 11 100

The data is presented in the chart as follows:-

Chart 4.48
Suggestions for changes in loan amount limit for studies abroad

100
82
80
CD
C) 60
S
c:
CD 40
...
u
CD
ll. 20 18
o
0
No Change Increase Decrease
Responses

249
Table 4.48 revealed that 9 bank managers i.e. 82 percent of the bank

managers suggested that there should be 'no change' in the loan

amount limit for studies abroad, whereas 2 bank managers i.e. 18

percent of the bank managers suggested that there should be an

'increase' in the loan limit for studies abroad. Thus, it can be concluded

that majority of the bankers 'do not' suggest changes in the loan

amount limits for studies abroad.

(iii) SUGGESTIONS FOR CHANGE IN MARGIN MONEY LlMITS:-

As per the Model educational loan scheme 2004-2005, no margin

money is required to be brought in by the borrowers to take a loan upto

RsA lakhs and to obtain a loan above RsA lakhs, 5% margin money is

required for studies in India and 15% margin money is required for

studies abroad. The responses of the bank managers on the changes

required (if any) towards margin money limits of the loan amount for

educational loans are presented as follows:-

Table 4.49

Suggestions for changes in Margin Money Limits

Responses Frequency Percent

No Change 9 82

Increase 2 18

Decrease 0 0

Total 11 100

250
The data is presented in the chart as follows:-

Chart 4.49
Suggestions for changes in Margin Money Limits

Table 4.49 revealed that 9 bank managers i.e. 82 percent of the bank

managers suggested that there should be 'no change' in the margin

money limits for educational loans. Whereas 2 bank managers i.e. 18

percent of the bank managers suggested that there should be an

'increase' in the margin money limits for educational loans. Thus, it can

be concluded that majority of the bankers 'do not' suggest changes in

the margin money limits.

(iv) SUGGESTIONS FOR CHANGE IN MORATORIUM PERIOD:-

As per the Model educational loan scheme 2004-2005, the norm for

moratorium period of educational loan is course period plus 1 year or 6

months after getting job, whichever is earlier. The responses of the

bank managers on the changes required (if any) towards the norm for

251
moratorium period on the loan amount for educational loans are

presented as follows:-

Table 4.50
Suggestion for changes in Moratorium period
Responses Frequency Percent

No Change 11 100

Increase 0 0

Decrease 0 0

Total 11 100

The data is presented in the chart as follows:-

Chart 4.50
Suggestion for changes in Moratorium period

120
100
100
Q) 80

-
tn
ca
s:::: 60

-
Q)
(.)
40
Q)
D..
20
0 0
0
No Change Increase Decrease

Responses

Table 4.50 revealed that all the 11 bank managers i.e. 100 percent of

the bank managers suggested that there should be 'no change' in the

moratorium periods for educational loans. Thus, it can be concluded

that all bankers 'do not' suggest any changes in the RBI guidelines

regarding Moratorium periods.

252
(v) SUGGESTIONS FOR CHANGE IN REPAYMENT PERIOD:-

As per the Model educational loan scheme 2004-2005, the norm for

repayment period of educational loan is course period plus 1 year or 6

months after getting job, whichever is earlier. The responses of the

bank managers on the changes required (if any) towards the norm for

repayment period on the loan amount for educational loans are

presented as follows:-

Table 4.51
Suggestions for changes in Repayment period
Responses Frequency Percent

No Change 8 73

Increase 2 18

Decrease 1 9

Total 11 100

The data is presented in the chart as follows:-

Chart 4.51
Suggestions for changes in Repayment period

100

80 73
Q)

-...
m
cu
cQ)
C,)
60

40
Q)
~ 20

0
No Change Increase Decrease

Responses

253
Table 4.51 revealed that 8 bank managers Le.73 percent of the bank

managers suggested that there should be 'no change' in the repayment

periods for educational loans. While 2 bank managers Le.18 percent of

the bank managers suggested that there should be an 'increase' in the

loan repayment period whereas only one respondent Le.9 percent of

the bank managers suggested that there should be a 'decrease' in the

loan repayment period. Thus, it can be concluded that a majority of

bankers 'do not' suggest any changes in the RBI guidelines regarding

repayment periods.

10. RESPONSES TOWARDS SECURITY PROVIDED FOR

EDUCATIONAL LOANS:-

The responses of the bank managers on whether providing a collateral

security against a loan should be made mandatory are presented as

follows:-

Table 4.52
Responses on whether security should be mandatory
Responses Frequency Percent

Extremely Mandatory 3 27

Mandatory 3 27

Moderately Mandatory 1 9

Not Mandatory 4 37

Can't Say 0 0

Total 11 100

254
The data is presented in the chart as follows:-

Chart 4.52
Responses on whether security should be mandatory

40 ~--------------------------~~--------~

30

Q)
C)
Ss: 20
Q)
~
Q)
a.. 10

o
o
Extremely Mandatory Moderately Not Can't Say
Mandatory Mandatory Mandatory

Responses

Table 4.52 revealed that 4 bank managers i.e. 37 percent of the bank

managers felt that provision of collateral/security by a borrower for an

educational loan was 'not mandatory'. Whereas 3 bank managers i.e.

27 percent of the bank managers felt that provision of

collateral/security by a borrower for an educational loan was 'extremely

mandatory' and another 3 bank managers i.e. 27 percent of the bank

managers felt that it was 'mandatory'. Only one of the bank managers

i.e. 9 percent of the bank managers felt that it was 'moderately

mandatory' to provide security for an educational loan. Thus, it can be

concluded that majority of bank managers felt that providing collateral

security by the borrowers should be 'mandatory' for educational loans.

255
11. RESPONSES TOWARDS AWARENESS REQUIRED FOR

EDUCATIONAL LOAN SCHEME:-

The responses of the bank managers on whether more awareness was

needed regarding educational loans provided by the banks in order to

improve the popularity of these schemes among the general public are

presented as follows:-

Table 4.53
Awareness required for Educational Loan Scheme
Responses Frequency Percent

Strongly Required 3 27

Required 4 37

Moderately Required 1 9

Not Required 3 27

Can't Say 0 0

Total 11 100

The data is presented in the chart as follows:-

256
 Chart 4.53

Awareness required for Educational Loan Scheme

40 ~----------~--------------------------~

30
CD
C)
.! 20
c
CD
~
CD
11. 10

o
o
Strongly Required Moderately Not Can't Say
Required Required Required

Responses

Table 4.53 revealed that 4 bank managers i.e. 37 percent of bank

managers felt that more awareness was 'required' to make educational

loans popular. Whereas 3 bank managers i.e. 27 percent of bank

managers felt that awareness was 'strongly required' to boost

popularity of educational loans and another 3 bank managers i.e. 27

percent of bank managers felt awareness was 'not required' at all.

Lastly, one bank manager i.e. 9 percent of bank managers mentioned

that awareness was 'moderately required' to boost the popularity of

educational loans in India. Thus it can be concluded that majority of the

bankers i.e. 63 percent of bank managers felt that awareness was

'required' or 'strongly required' to make educational loans more

popular.

257