“Opportunity for Affordable Housing in Urban Gujarat.

Submitted By:

Ms. NehaChauhan

Summer Internship

PGDM (ABM) 2015-17 Batch

Submitted to:

Dr. T. Paranjothi

CENTRE FOR MANAGEMENT EDUCATION

Vaikunth Mehta

National Institute of Cooperative Management,

University Road, Pune - 411007

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NEHA CHAUHAN (1548)
 ACNOWLEDGEMENT

This acknowledgement is not merely a catalogue of names but an expression of a deep sense
of gratitude to all those who helped me in this project directly or indirectly.

I take this opportunity to express my sincere and deepest gratitude to “Pahal Financial
Services Pvt .Ltd.” for providing me a chance of learning .The project really helped me to
have an insight of Microfinance Sector in India.

I owe a great deal to VAMNICOM for laying the building blocks of logic and pragmatism in
my life .This report, in a way is a reflection of these values.

I feel my immense pleasure in expressing my sincere and profound sense of gratitude to the
“Pahal Financial Services Pvt .Ltd.” Gujarat, especially to Mrs. PurviBhavsar for inspiring
and affectionate guidance, unending benevolence, constant encouragement during the course
of summer project .I am also thankful to Pahal Financial Services Pvt .Ltd.” Family for their
kind support and co-operation.

I am immensely overjoyed to acknowledge my sincere thanks to my faculty guide Mr.T.

Paranjothi providing necessary guidance during my summer project.

I am greatly indebted to Mr. T. paranjothi (Programme Director), Mr.D.Ravi (Joint

Programme Director) without whose help and guidance this project would not have been
completed.

Last but not least, I bow my head in front of almighty and my parents who has always been
the torch bearer for me throughout my work by showing me the right path and boosting my
moral to bring the best out of me.

NehaChauhan
PGDM (ABM-1548)

2
NEHA CHAUHAN (1548)
 DECLARATION

This is to declare that I NehaChauhan, student of Post Graduate Diploma in management

(Agri Business Management 2015-2017 batch) at Vaikunth Mehta National Institute of
cooperative management (VAMNICOM) ,Pune has given original data and information to
the best of my knowledge in the project report titled “Opportunity for Affordable Housing
in Urban Gujarat”and that no part of information has been used for any other assignment
but for partial fulfillment of the requirement towards the completion of the said course.

I also agree in principal not to share the vital information with any other person outside the
organization and that I have not submitted it for any award or any other title, degree or
diploma.

Date: NehaChauhan

Place: Roll No: 1548

3
NEHA CHAUHAN (1548)
 CERTIFICATE
This is to certify that the project report entitled, “Opportunity for Affordable Housing in Urban
Gujarat”submittedin partial fulfillment of the requirements for the degree of Agri-Business
Managementof VAIKUNTH MEHTA NATIONAL INSTITUTE OF COOPERATIVE
MANAGEMENT (VAMNICOM) PUNE.

Ms. NEHA CHAUHAN (1548) has worked under my supervision and guidance and that no
part of this report has been submitted for the award of any other degree, diploma, fellowship
or other similar titles or prizes and that the work has not been published in any journal or
magazine.

Mrs.PurviBhavsar
Managing Director
(PROJECT GUIDE)

4
NEHA CHAUHAN (1548)
 CERTIFICATE

This is to certify that the project report entitled, “Opportunity for Affordable Housing in
Urban Gujarat.” submitted in partial fulfillment of the requirements for the degree of Agri-
Business Management of VAIKUNTH MEHTA NATIONAL INSTITUTE OF
COOPERATIVE MANAGEMENT (VAMNICOM) PUNE.

Ms NEHA CHAUHAN(ROLL NO. 1548) has worked under my supervision and guidance
and that no part of this report has been submitted for the award of any other degree, diploma,
fellowship or other similar titles or prizes and that the work has not been published in any
journal or magazine.

Dr. T. Paranjothi
HoC-ME & Programme Director
(FACULTY GUIDE)

5
NEHA CHAUHAN (1548)
 EXECUTIVE
SUMMARY

6
NEHA CHAUHAN (1548)
 EXECUTIVE SUMMARY

I. Title: Opportunity for Affordable Housing in Urban Gujarat

II. Organization: Pahal Financial Services Pvt. Ltd
III. Reporting Officer: Mrs. Purvi Bhavsar
IV. Faculty Guide: Mr. T. Paranjothi
V. Student Name: Neha Chauhan

Need of the study:

To study the various type of home loan i.e. home purchase loan, home improvement loan,
home extension loan, and home conversion loan so that, the organization can plan for future
growth activities. This study will help to Pahal Financial Services Pvt. Ltd to plan housing
loan and strategies to acquire better grip in market and maintain the current customers and
also to reach the new ones.
Objectives

 To study the concept of Home Loan /Housing Finance in today’s scenario.

 To examine types of loans in India.

 To assess the potentiality of affordable housing opportunities in targeted geographies.

 To explore thebusiness opportunities from the people.

 To develop a database of the targeted customer groups in the targeted geographies for
the future reference.

Methodology Used:

1. Planning Of the study: I was allotted Ahmedabad, Vadodara, and Mehasana Region of
Gujarat for Study .Questionnaires for customers were prepared with help of PAHAL
financial Pvt .Ltd officials to achieve the given objectives of the study. The detailed
outline of the schedule was given to me.

2. Secondary data collection: Secondary data was collected from published sources like
Research Papers, Magazines, and Internet.

7
NEHA CHAUHAN (1548)
 3. Research Study / Primary data collection: The survey was conducted at various
villages across Ahmedabad, Vadodara, and Mehasana.

4. Analysis of the data: After collection of the data from Ahmedabad, Vadodara, and
Mehasana Region analysis was done as to achieve the objective of study.

5. Preparation of report: The report was prepared as per prescribed format.

6. Sample size: A sample size of 509 customers was taken in Ahmadabad, Vadodara,
and Mehasana region .The data collection is done by personally interacting with
customers through informal interviews and personal observation.

7. Sources of information:
Primary Source

 Personal interaction with customers.

 From organization: Pahal finance Pvt. Ltd.
Secondary Source
 Research paper
 Magazines
 Websites
Scope of study:

The study was carried out in urban Gujarat. In this area there is huge demand for affordable
housing .Different housing finance companies are promoting their product in different ways.
This study will help to know the potential market for affordable housing in urban Gujarat.

Geographical scope:

Number of District covered: 3

Number of farmers covered: 509

Period of Study:

The study is for duration of 60 days from 1st April 2016 to 30thMay 2016.

Findings:

 There were field officers available for each area.

 Customers were not aware about the housing loan.

 Majority of the respondents fall in low income group

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NEHA CHAUHAN (1548)
  Tailoring, cattle rearing and incense manufacturing formed the core of livelihood.

 Unstable income pattern led to low standard of living.

 Most of the respondents don’t have pucca house.

 Majority of the respondents were capable enough of clearing the loaned amount in a
maximum period of 5 years.
Limitations of the study:

 The survey was done in a limited geographic area. Therefore the results cannot be
considered as representative position of whole district.

 Another constraint is time, due to which it was not possible to cover whole area.

 The respondents were reluctant to answer the questions. However due care was given to
elicit information.

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NEHA CHAUHAN (1548)
 Content
Sr. No. Topic Page No.
Executive Summary 7-9
1. Introduction
1.1Home Loan
1.2 History of Home Loan in
India
1.3.1Purpose of the project 12-15
1.3.2 Methodology
1.3.3Sources of information
1.3.4 Scope of the project

2. About Micro-finance
institutions 16-18
2.1 History of Micro-Finance
2.2 Role of Micro-Finance

3. Organization profile
3.1 Introduction
3.2 Product Strategy
3.3 Risk Management 19-22
3.4 Internal Process Initiatives
3.5 Client Focus
3.6 Strategic Vision over the
next 5 years
4. Home Loan
4.1 Home Loan 23-25
4.2Types of Home Loan

5. Home Loan: Field Survey

Analysis 26-39

6. Findings And
Recommendation 40-42

7. Bibliography
43

8. Annexure 44-45

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NEHA CHAUHAN (1548)
 List of Graphs
SR. No. PARTICULARS Page No.
1 Occupation of the customers
27

2 Family income (on monthly basis)

28

3 Earning members in the family

29

4 Savings of respondents
30

5 Type of savings
31

6 Possession of House
32

7 Requirement of Home Loan

33

8 Type of Home Loan required

34

9 Amount of Loan Required

35

10 Repayment period(in years)

36

11 Monthly Repayment Capacity

37

12 Possession of land Documents

38

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NEHA CHAUHAN (1548)
 Chapter-1
Introduction

12
NEHA CHAUHAN (1548)
1.1 Home Loan
Home loans are an attractive and popular means of buying a dream house for most people. In
India, the demand for home loans has increased manifold in the last decade. The purpose of
the study is to study the concept of Home Loan /Housing Finance in today’s scenario. The
home loan market in India has grown at a rapid and alarming rate of over 40% over the
period of the last four years. The reports from one of the industry experts, reveals that it is
evident that there is very little chance that these will be any significant decline in growth rates
in the future. Therefore it becomes important at this point in time to examine the key factors
that have been instrumental in triggering this high growth period. These are several reasons
that can be considered as having attributed to the growth of the home loan market. On the
demand side, the first and the most important factor for the growth has-been faster rise in
incomes as compared to property prices, thus making housing more affordable.

1.2History of Home Loan in India

Housing has traditionally been one of the most important assets for households in Asia. The
cities of Indus Valley Civilization, Harappa and Mohenjo-Daro, are the exemplary in this
context. The Housing finance sector in India has no doubt, experienced unprecedented
change in its structure from its formulation stage. Indian Housing Finance has far moved
from the stage of being a solely government undertaking provided service during the 1970’s
to a very competitive sector with more than 45 housing finance entities providing housing
loans worth ` 7,81,000 million to home buyers across India.

Table 1.1 Phases of Indian Housing Finance

Phase I Before 1970 Government Domination
Phase II 1970 – 1980 HUDCO and HDFC
establishes
Phase III 1980 – 1990 Establishment of NHB

Phase IV 1990 – 2000 Liberalization of Interest Rate

Phase V 2000 to present High Growth
Source: Chandrasekar V, 2010.

The first phase began before 1970 when the sole provider of any house building support was
the government of India through its various social schemes for public housing.

The second phase starts with the establishment of the public housing company, Housing and
Urban Development Corporation (HUDCO). HUDCO was created to assist and promote
housing and urban development programs with government agency. Another important
private player, Housing Development Finance Company (HDFC) was established in 1977.
HDFC pioneered in individual lending, based on market principles. HDFC today is one of the
largest home loan providers of the country and its success displayed that financing homes can
be a very profitable business.
The third phase covers the decade of 1980s, which is marked by the establishment of the
country’s housing finance regulator - National Housing Bank in 1987.

13
NEHA CHAUHAN (1548)
The fourth phase is the era after liberalization and is characterized by dramatic changes in
pricing of loans. Before 1994, the pricing of home loans were regulated by the NHB based on
a differential rates charged according to the size of the loan. This policy was amended in
1994 and providers were free to charge market rates for the loans above 25,000. The fourth
phase saw a dominance of fixed interest rates, but variable rate offers started emerging at the
end of the decade.

The fifth Phase of rapid growth in the sector started after the millennium. Home loan
disbursements rapidly grew during the first few years of this phase. The lower interest rate
regime, rising disposable incomes, stable property prices and fiscal incentives made housing
finance an attractive business. Home loan disbursements grew to ` 7, 68,191.90 million in
2005 from ` 1, 47,012 million in 2001. The year 2003 witnessed an annual growth rate of
76% in loan disbursements.

1.3.1 Purpose of the project

The main objective of the study is:

 To study the concept of Home Loan /Housing Finance in today’s scenario.

 To examine types of loans in India.

 To create awareness about the housing loan.

 To create affordable housing opportunities in targeted geographies.

 To create business opportunities from the people.

 To create a database of the targeted customer groups in the targeted geographies for
the future reference.

 Ensuring them to give better customer service.

1.3.2 Methodology Used:

1. Planning of the study: I was allotted Ahmedabad, Vadodara, and Mehasana Region of
Maharashtra for Study .Questionnaires for customers were prepared with help of
PAHAL financial Pvt .Ltd officials to achieve the given objectives of the study. The
detailed outline of the schedule was given to me.

2. Secondary data collection : Secondary data was collected from published sources like
Research Papers ,Magazines, and Internet

3. Research Study / Primary data collection: The survey were conducted at various
villages across Ahmedabad, Vadodara, and Mehasana . An explorative study was
conducted using a well-structured questionnaire and convenient sampling method was
used.The questionnaire was filled carefully by the customers’ different areas with the
help of personal interviews and observations.
14
NEHA CHAUHAN (1548)
 4. Analysis Of the data: After collection of the data from Ahmedabad, Vadodara, and
Mehasana Region analysis was done as to achieve the objective of study.

5. Preparation of report: The report was prepared as per prescribed format.

6. Sample size: A sample size of 509 customers was taken in Ahmadabad, Vadodara,
and Mehasana region .The data collection is done by personally interacting with
customers through informal interviews and personal observation.

7. Sources of information:

1.3.3 Sources of information

Primary Source

 Personal interaction with customers.

 From organization: Pahal finance Pvt. Ltd.
Secondary Source
 Research paper
 Magazines
 Websites

1.3.4 Scope of study:

The study was carried out in Ahmedabad, Vadodara, and Mehasana Region of Gujarat. In this
area there is huge demand for affordable housing .Different housing finance companies
promoting their product in different ways. As the survey was conducted in urban areas of
these districts there are very few companies who are providing them such home loans. Pahal
duty is to give more choice, better services, quicker settlement, tighter regulation and greater
awareness‘s. By providing such choice the competitive and services of the products will
become alike.

15
NEHA CHAUHAN (1548)
 Chapter-2
About Micro-finance
Institutions

16
NEHA CHAUHAN (1548)
Microfinance at a glance
Microfinance is a general term to describe financial services to low-income individuals or to
those who do not have access to typical banking services.

Microfinance is also the idea that low-income individuals are capable of lifting themselves
out of poverty if given access to financial services. While some studies indicate that
microfinance can play a role in the battle against poverty, it is also recognized that is not
always the appropriate method, and that it should never be seen as the only tool for ending
poverty.

‘Microfinance refers to small scale financial services for both credits and deposits- that
are provided to peoplewho farm or fish or herd; operate small or micro enterprise where
goods are produced, recycled, repaired, or traded; provide services; work for wages
or commissions; gain income from renting out small amounts of land,vehicles, draft animals,
or machinery and tools; and to other individuals and local groups in developingcountries in
both rural and urban areas’.

2.1T h e H i s t o r y of Mo d e r n Mi c r of i n a n c e
In the late 1970s the concept of microfinance had evolved. Although, microfinance have a
long history from the beginning of the 20th century we will concentrate mainly on the period
after 1960.Many credit groups have been operating in many countries for several years, for
example, the “chit funds" (India), tontines" (West Africa), "susus" (Ghana), "pasanaku"
(Bolivia) etc. Besides, many formal saving and credit institutions have been working for a
long time throughout the world. During the early and mid 1990s various credit institutions
had been formed in Europe by some organized poor people from both the rural and urban
areas. These institutions were named Credit Unions, People's Bank etc. The main aim of
these institutions was to provide easy access to credit to the poor people who were neglected
by the big financial institutions and banks.
In the early 1970s, few experimental programs had started in Bangladesh, Brazil and some
other countries. The poor people had been given some small loans to invest in micro-
business. This kind of micro credit was given on the basis of solidarity group lending, that is,
each and every member of that group guaranteed the repayment of the loan of all the
members.
Many banks and financial institutions have been pioneering the microfinance program after
1970.These are listed below.

ACCION International:
This institution had been established by a law student of Latin America to help the poor
peopleresiding in the rural and urban areas of the Latin American countries. Today, in 2008,
it is one of themost important microfinance institutions of the world. Its network of lending
partner comprises not onlyLatin America but also US and Africa.

SEWA Bank:
In 1973, the Self Employed Women's Association (SEWA) of Gujarat (in India) formed a
bank,named as Mahila SEWA Cooperative Bank, to access certain financial services easily.

17
NEHA CHAUHAN (1548)
Almost 4thousand women contributed their share capital to form the bank. Today the number
of the SEWABank's active client is more than 30,000.

GRAMEEN Bank:
Credit unions and lending cooperatives have been around hundreds of years. However, the
pioneering of modern microfinance is often credited to Dr. Mohammad Yunus, who began
experimenting with lending to poor women in the village of Jobra, Bangladesh during his
tenure as professor of economics at Chittagong University in the 1970s. He would go on to
found Grameen Bank in 1983 and win the Nobel Peace Prize in 2006.

2.2Role of Microfinance:
The micro credit of microfinance prename was first initiated in the year 1976 in Bangladesh
with promise of providing credit to the poor without collateral , alleviating poverty and
unleashing human creativity and endeavor of the poor people. Microfinance impact studies
have demonstrated that-

1. Microfinance helps poor households meet basic needs and protects them against risks.

2. The use of financial services by low-income households leads to improvements in

household economic welfare and enterprise stability and growth.

3. By supporting women’s economic participation, microfinance empowers women, thereby

promoting gender-equity and improving household well being.

4. The level of impact relates to the length of time clients have had access to
financial services.

18
NEHA CHAUHAN (1548)
 Chapter-3
Organization profile

19
NEHA CHAUHAN (1548)
3.1 Introduction
Kelkar Leasing Company Pvt. Ltd. started in 1994 as a Non-Banking Finance Company
(NBFC) with a vision that the young blood of the family will take this company forward but
as they went abroad, the company remained idle for many years. The investment in shares
remained as deposits in the bank and no business was conducted. The present Management
identified this company for doing microfinance since it was an existing NBFC registered with
the Reserve Bank of India. The company was duly acquired on 8th February, 2011. The
current promoters brought in the initial equity of Rs.2 crore and commenced the microfinance
activities with a vision to provide holistic financial inclusion. The current promoters acquired
the microfinance portfolio of Lok Vikas Nidhi (a division of Vikas Centre for Development)-
a well-known trust operating in the area of social development in Gujarat for over 25 years.
Vikas did not wish to run the microcredit activity and hence the portfolio created under the
Joint-liability group (JLG) methodology was acquired by the NBFC. The name has been
subsequently changed from Kelkar Leasing Company Private Ltd to Pahal Financial Services
Private Limited to reflect the nature of the work we have undertaken in ‘financial inclusion’.
Along with the outstanding JLG portfolio of the trust having 7500 borrowers, the NBFC also
acquired the existing infrastructure of branches running in more than 11 districts of Gujarat
with trained human resource and having technology in place. Pahal has expanded its financial
services to Madhya Pradesh and Maharshtra after having done the primary survey of existing
potential and understanding of the clients and the area of work. As of now only we are having
9 branches in these regions.

3.2Product Strategy
The Company’s vision is to “promote holistic financial inclusion” across the entire spectrum
of financial services including credit, savings/investments, insurance, remittances and
advisory services. The idea is to engage the customer across the entire life cycle of her family
and enable credit and income enhancement, wealth creation and contingency planning. They
believe that any initiative to uplift the population at the bottom of the pyramid (BOP) requires
scientific impact assessment of the initiatives undertaken. Going forward also, structured
impact study of interventions made is going to be the critical to our strategy.

They have taken steps to offer intermediation thru the credit products under their
microfinance program. As a part of the strategic business model, they intend to cover the
targeted segment not only thru own micro credit operations but by also partnering with banks
(as a Banking correspondent) and other financial institutions (as partners or franchisee model)
Over and above this, they have mapped to facilitate both forward and backward market
linkages to their clients thereby enabling a significant scale up in their earning capacity. Once
they achieve a critical mass they would be introducing insurance, investment and savings
product. They propose to facilitate bank linkages for opening savings accounts of their
clients.

20
NEHA CHAUHAN (1548)
All of the above initiatives have required a focused thrust on the “financial literacy” and
“enterprise development” programs. Both these initiatives are at the cornerstone of their
product development initiatives. In their achievement of the objective they do foresee a need
to have a diverse set of organizational structures including a private limited company which
will facilitate the banking correspondent initiative and a section 25 company which will
promulgate financial literacy and capacity building efforts.

3.3Risk Management
The entire business proposition is based on a sound understanding of the risks associated with
the financial services business-these risks come from both the internal environment of the
organization as well as the macro external environment. The product and geographic strategy
is intended to mitigate a lot of external risks and provide a robust business model. They
propose to have strong internal controls both at the management and the board levels with a
clear focus on processes and transparency in dealings. Both the board and the current
management team have a diverse mix of expertise which is intended to ensure both
governance and execution of the overall strategy.

They believe that an objective credit rating exercise from organizations having the right
credentials will also go a long way in ensuring proper risk management of their businesses
and towards this they got themselves rated by ICRA their Credit Grading for year 2014-15
was BBB+(SO).

3.4Internal Process Initiatives

This involves the following actionable –

a) Putting in place “best in class” loan management systems and transactions engine to
support efficient service delivery mechanisms with seamless information management.

b) Engaged a sector specialist consultant to map all the processes at the Company.

c) In depth analysis of the growth and PAR (Portfolio at Risk) trends by aging, loan cycles,
regions and causes. All of their above actionable necessitate a robust technology platform.
They have created a strong back office enabled by appropriate technology to facilitate
efficient product and risk management backed by strong process orientation and optimizing
on the transaction cost of doing the business.

3.5Client Focus
a) To provide adequate customer training regarding the company, its processes and credit
profile monitoring.

b) To initiate independent verification processes intended to achieve full client protection.

c) To have a Not for profit organization which will complement the NBFC by significant
non-financial intermediation and aimed at overall livelihood betterment thru intervention for

21
NEHA CHAUHAN (1548)
their clients across diverse sectors of health, education and enterprise development. The
intent is to share a fixed % of profits of the NBFC towards this initiative.

3.6 Strategic Vision over the next 5 years

1. To have a business model that is holistically covering every aspect of financial inclusion-
namely credit, savings, insurance, pensions and remittances. Within credit also, there will be
a need to have a clear dissection of verticals that would entail the following-

a. conventional micro-credit
b. Micro enterprise lending to include enterprise loans
c. House repairs/renovation
d. Consumer loans
e. Housing Finance
2. To have a geographical outreach starting with the Western geographies of Gujarat,
Maharashtra, Rajasthan and Goa in the first couple of years and then covering the entire
nation.

22
NEHA CHAUHAN (1548)
 Chapter-4
Home Loan

23
NEHA CHAUHAN (1548)
4.1 Home Loan
A "home loan" is a credit to a consumer for the purchase or transformation of the private
immovable property he owns or aims to acquire secured either by a mortgage on immovable
property or by a surety commonly used in a member state for that purpose.

Home loan is the finance borrowed from a bank or financial institution to buy or modify a
residential real estate property.

4.2 Types of Home Loans

Home purchase loan: The home purchase loans are the most popular and the most
commonly available home loan variants. These loans can be used to finance the purchase of a
new residential property or an old house from its previous owners. In this type of loan also,
lenders usually finance up to 85 percent of the market value of the house. These loans are
provided either on fixed interest rates or floating interest rates or as hybrid loans. All banking
institutions and housing finance companies provide this type of loan.

Home improvement/extension loan: Home improvements loans for repairs/renovation

including waterproof, plumbing, compound wall, digging of well/tube-well, flooring/tiling,
additions like built-in cupboards/shelves, internal repairs including replacing doors/windows,
etc. These loans are given for expanding or extending an existing home. These are some of
the instances for which you could take an Extension Loan.

 To construct an additional room or floor by getting additional FSI granted.

 Using grills or sliding windows to enclose the balcony.
Home construction loan: These loans can be availed by those individuals who want to
construct a house according to their wishes rather than purchasing an already constructed one.
The loan application and approval process for home construction loans are somewhat
different from those of the commonly available housing loans.

Home Conversion Loan: It is that loan wherein the borrower has already taken a home loan
to finance his current home, but now wants to move to another home. The Conversion Home
Loan helps the borrower to transfer the existing loan to the new home which requires extra
funds, so the new loan pays the previous loan & fulfills the money required for new home.

Bridge Loan: This type of loan helps finance the new home of the borrower when he wants
to sell the existing home, this is normally a short term loan to the borrower & helps during
the interim period when he wants to sell the old home & want to buy a new one, It is given
till the time a buyer is found for the old home.

Home equity loans:

A home equity loan (sometimes abbreviated HEL) is a type of loan in which the borrower
uses the equity in their home as collateral. These loans are sometimes useful to help finance

24
NEHA CHAUHAN (1548)
major home repairs, medical bills or college education. A home equity loan creates a lien
against the borrower's house, and reduces actual home equity.

25
NEHA CHAUHAN (1548)
 Chapter- 5
Home Loan: Field
Survey Analysis

26
NEHA CHAUHAN (1548)
Introduction
In this section of the report we have tried to graphically present the observations made during
the field visits. Different factors affecting the need, type and amount of loan are analyzed and
represented with the help of various graphs. A few factors shown are Occupation, family
income, Earning members in the family, availability of savings, type of savings, availability
of house, requirement of home loan, type of home loan required etc. Findings or observations
made are written below the graph.

Occupation
Tables 6.1: Occupation

Occupation Percenatge
Self employed 55
Service 21
Business 16
No occupation 8

Table 6.1 depicts the occupation type of the respondents. Self employment is the main source
of income(55%) followed by service sector(21%) and 16% of the total respondents undertake
business. while 8% are unemployed.

Chart 6.1

self employed service business no occupation

8%

16%

55%

21%

27
NEHA CHAUHAN (1548)
Family income
Table 6.2: Family Income

Family income Percentage

Upto 10,000 9
Upto 20,000 57
Upto 30,000 25
Upto 40,000 7
Above 40,000 2

Table 6.2 furnishes the family income of the respondents. Majority of the respondents (57
percent) have monthly income ranging from 10,000 to 20,000 followed by 25 percent in the
range of 20,000 to 30,000. 9 percent have an income below 10000 while 9% of the total
respondents earn more than 40000.

Chart 6.2

350
57%
300

250
NO OF CUSTOMER

200

150 25%

100
9%
50 7%
2%
0
upto 10000 upto 20000 upto 30000 upto 40000 above 40000

28
NEHA CHAUHAN (1548)
Earning members in the family
Table 6.3: Earning members in the family

Earning members in the family Percentage

1 6
2 54
3 24
4 13
5 2
6 1
7 0.196

Table 6.3 gives the number of earning members in a respondents family. Majority of the
families have 2 working members (54 percent), 24 percent families have 3 working
members,13 percent of the total families 4 members earn, while 6 percent families have only
one breadwinner 1

Chart 6.3

300
54%

250

200
NO OF CUSTOMER

150
24%

100
13%

50 6%
2%
1% 0.196%
0
1 2 3 4 5 6 7

EARNING MEMBERS

29
NEHA CHAUHAN (1548)
Savings of Respondents
Table 6.4:Savings of Respondents

Savings of Respondents Percentage

Yes 90
No 10

Table 6.4 categorises respondents on the basis of their savings. 90 percent of the total
respondents have savings with them in one form or the other while only 10 percent
repondents didn’t have any kind of savings.

Chart 6.4

no yes

10%

90%

30
NEHA CHAUHAN (1548)
Type of savings
Table 6.5: Type of savings

Type of savings percentage

None 10
Monthly 80
Quarterly 7
Half yearly 2
Yearly 1

Table 6.5 furnishes the details of type of savings made by the respondents. 80 percent of the
total respondents save on monthly basis,7percent on quarterly basis while only 2 percent and
1percent on half yearly and yearly basis repectievly. 10 percent of the respondents mentioned
that they have no savings.

Chart 6.5

450
80%
400

350

300

250

200

150

100
10%
50 7%
2%
1%
0
none monthly quartely halfyearly yearly

31
NEHA CHAUHAN (1548)
Possession of House
Table 6.6: Possession of House

Possession of House
Percentage

Yes 94
No 6

The Table 6.6 presents the possession of house. One can easily see 94 percent of the total
respondents have shelter of one kind or the other availble while only 6 percent statedthat they
do not have a house.

Chart 6.6

no yes

6%

94%

32
NEHA CHAUHAN (1548)
Requirement of Home Loan
Table 6.7: Requirement of Home Loan

Requirement of Home Loan

Percentage

Yes 92
No 8

The Table 6.7 furnishes the requirement of home loan. A majority of respondents require
home loan (92 percent) while only 8 percent of the total respondent don’t need home loan.

Chart 6.7

no yes

8%

92%

33
NEHA CHAUHAN (1548)
Type of Home Loan Required
Table 6.8: Type of Home Loan

Type of Home Loan

Percentage

Home improvement/extension 56
House construction(self) 5
Home purchase loan 28
Loan against home 4
Not required 7

Table 6.8 furnishes the data regarding type of home loan required by the respondents. A total
of 56 percent said they required loan for home improvement or extenshion, 28percent want to
buy their own home, while 5 percent wish to build their house with that loan and 5 percent
want loan against home. 7 percent of the total respondents wanted loan for other purposes

Chart 6.8

300 56%

250
NO OF CUSTOMER

200
28%
150

100

5% 7%
50
4%

TYPE OF HOME LOAN

34
NEHA CHAUHAN (1548)
Amount of Loan Required
Chart 6.9

Amount of Loan Required

percentage

Upto 1,00,000 8
Upto 5,00,000 60
Upto 10,00,000 12
Upto 15,00,000 11
Upto 20,00,000 2
Above 20,00,000 1
Not required 8

The table 6.9 classified the respondents on the basis of the amount of loan required by them.
A majority i.e. 60 percent require a loan upto Rs. 500,000, 12 percent require upto Rs.
10,00,000 and a total of 11 percent of the total respondents require a loan upto Rs. 15,00,000.
3 percent respondents want a loan of more then 15,00,000 Rs. While 8 percent of the total
respondents dosent require any home loan.

Chart 6.9

350
60%
300
250
200
150
100 12% 11%
8% 8%
50 2%
1%
0
NA up to 100000upto 500000 upto upto upto above
1000000 1500000 2000000 2000000

35
NEHA CHAUHAN (1548)
Repayment period (In Years)
Table 6.10: Repayment period (In Years)

Repayment period(In Years) Percentage

1 to 5 52
6 to 10 23
11 to 15 13
16 to 20 4
21 to 25 0.2
Not Required 8

The Table 6.10 categories respondents based on period required by them for the repayment.
Majority of the respondents (52 percent) want a loan for a maximum of 5 years. 23 percent
say they require 5 to 10 years duration for repaymment,while a 13 percent require a duration
of 11 -15 years. 4.02 percent of the total respondents require more then 15 years.

Chart 6.10

300
52%
250

200

150
23%

100
13%

50 8%
4%
0.2%
0
1 to 5 year 6 to 10 year 11 to 15 year 16 to 20 year 21 to 25 year NA

36
NEHA CHAUHAN (1548)
Monthly Repayment Capacity
Table 6.11: Monthly Repayment Capacity

Monthly Repayment Capacity Parentage

Up to 5,000 67
Up to 10,000 24
Up to 15,000 1
Not applicable 8

Table 6.11 brings out the monthly repayment capacity of the respondents. 67 percent of the
total respondents claim to have a capacity of upto Rs. 5000 repayment each month followed
by 24 percent who can repay upto Rs. 10000 every month. A mere 1 percent said they can
pay upto Rs. 15000 every month.

Chart 6.11

400

67%
350

300

250

200

150
24%

100

8%
50

1%
0
NA upto 5000 upto 10000 upto 15000

37
NEHA CHAUHAN (1548)
Possession of land documents
Table 6.12: Possession of Land Documents

Possession of Land Documents

Percentage

Not applicable 8
Yes 63
No 29

Table 6.12 demarks the respondents on the basis of possession of land documents. 63 percent
of the total respondents claim to have their house documents while 29 percent didn’t have
ownership of the documents of their house.

Chart 6.12

NA no yes

8%

29%

63%

38
NEHA CHAUHAN (1548)
Findings:
On analysis of all the factors, one can easily see a huge scope for home loan finance based on
the primary survey. The respondents expressed keen willingness and ability to get the finance
and also the repayment of it. A home loan product developed on the basis of observations
made in the previous tables can be successful. Thus the study reveals that the Pahal financial
services pvt. Ltd. can venture into housing loan on a large scale and thereby increase its
business operation and provide shelter to the people and meet one of the basic necessities of
human beings.

39
NEHA CHAUHAN (1548)
 Chapter-6
Findings and
Recommendation

40
NEHA CHAUHAN (1548)
Findings
 Pahal provide servicesin11 districts of Gujarat.

 Field officers were available for particular area.

 Majority of the respondents fall in low income group with a maximum of50K annual
income.

 Tailoring, cattle rearing and incense manufacturing formed the core of livelihood.

 Unstable income pattern led to low standard of living.

 90 percent of customers keep their savings in bank and 80percent customers save on
monthly basis but few customers don’t even have a saving account.

 Maximum number of customers doesn’t have knowledge about housing loan.

 Most of the respondents required home loan to get their houses pucca.

 Rs. 5 lakh formed the upper limit of loans that could be withstood by majority.

 With an EMI of Rs. 5000, Majority of the respondents were capable enough of
clearing the loan amount in a maximum of 5 years.

 63percent of the total respondents have legal documents stating their ownership over
the house they live in.

 Pahal financial services Pvt. Ltd having good image in mind of customers and
Majority of the people want to take loan from Pahal only.

Recommendations and Suggestions:

 As there are many housing companies like Equitas, Aptus, GRUH etc. in the market
there is intense competition to survive in market. Pahal financial services Pvt. Ltd
should develop its competitive advantage to compete in market by proper
management.

 Company should take measures to increase the awareness about Home Loan among
farmers.

 To increase awareness, PAHAL Financial Services Pvt. Ltd should concentrate on

field work at ground level i.e. They should organize campaign of the product to
customers.

 Distribution index should be improved by availing timely delivery of the products

and proper management of staff and services.

41
NEHA CHAUHAN (1548)
  Company should give training to its representatives about the housing loan.

 Advertising campaigns should be started at least one month prior to launch the
product.

 At the time of campaigning particular product should be promoted, over position will
confuse the customers.

 At the time of product development, company should focus on loan amount, tenure
and rate of interest of the product to attract the customers.

42
NEHA CHAUHAN (1548)
BIBLIOGRAPHY

http://www.microfinanceinfo.com/

http://www.ehow.com/

http://pahalfinance.com/

www.wikipedia.org

43
NEHA CHAUHAN (1548)
Annexure
QUESTIONNAIRE
FOR CUSTOMERS

Name of the customers:

Village/city name:

1. Age:

2. Occupation:

3. What is your monthly income:

4. What is your family income:

5. How many members earn in your family:

6. Do you save your money in bank account ?

A. Yes
B. No

7.Mode of savings?
A. Monthly
B. Quarterly
C. Half yearly
D. Yearly

7. What is your income

8. What is your total family income

9. Do you have your own house

10. Have you ever taken any home loan

A. Yes
B. No

11. Do you want to take home loan?

A. Yes
B. No

12. Which home loan do you want to take?

A. Home improvement/extension loan
B. House purchase loan

44
NEHA CHAUHAN (1548)
 C. House construction loan
D. Loan against property

If house purchase loan

1. loan amount
2. repayment capacity
3. loan tenure

If Home improvement/extension loan

1. loan amount
2. repayment capacity
3. loan tenure
If House construction loan

1. loan amount
2. repayment capacity
3. loan tenure
If Loan against property

1. loan amount
2. repayment capacity
3. loan tenure

13. Do you have house documents?

A. Yes
B. No

14. Would you like to take loan from Pahal?

A. Yes
B. No

45
NEHA CHAUHAN (1548)