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Comprehensive Project Report "A Study On Consumer Perception and Satisfaction Towards Home Loan"
Comprehensive Project Report "A Study On Consumer Perception and Satisfaction Towards Home Loan"
FACULTY GUIDE:
Dr.RAMZAN SAMA
ASSISTANT PROFESSOR
SUBMITTED BY:
RAJPUT ROSHAN (177290592116) BATCH : 2017-2019
Student’s Declaration
I hereby declare that the Summer Internship Project Report titled “A STUDY ON CONSUMER
PERCEPTION AND SATISFACTION TOWARDS HOME LOAN” in HFFC INDIA LTD.
is a result of my own work and my indebtedness to other work publications, references, if any,
have been duly acknowledged. If I am found guilty of copying from any other report or
published information and showing as my original work, or extending plagiarism limit, I
understand that I shall be liable and punishable by the university, which may include ‘Fail’ in
examination or any other punishment that university may decide.
Institute’s Certificate
PREFACE
“A JOURNEY OF THOUSANDS MILES BEGINES WITH ONE
STEP”
Now a day with the rapid growth of technology world becomes smaller
day by day and to stand with this world it is necessary to have a practical
knowledge of any subject instead of any theory.
Practical knowledge is important everywhere, like a person can‘t learn
driving by reading thousands of books on it. There should be a practical
driving knowledge.
Similarly management student can‘t learn management without going in
real business field. Then he/she can know about the business problem as
well as market situation, only theoretical knowledge is not the sing of
management training practical knowledge also hold an equal importance.
As a part of the MBA Circular and in order to gain practical Knowledge in the field
of management, we are required to make a report on “A STUDY ON
CONSUMER PERCEPTION AND SATISFACTION TOWARDS HOME
LOAN” At HFFC
The Basic Objective behind doing this project report is to get
knowledge tools of different tools of marketing
ACKNOWLEDGEMENT
This project bears imprint of many people and it really gratifies me to recognize
there assistance in it. My biggest gratitude goes for Mr. Prasant Gajaria
(Regional Manager, Gujarat) and Mrs. Nikita Desai (Area Customer Service
Manager) and Mr. Happy Prakash Pandey (Branch Manager of Naroda,
Ahmedabad) and the staffs of HFFC, who let me carry out my project in their
organization, also thanks for their fantastic cooperation during the entire project.
Thank you
Table of Contents
CHAPTER PAGE
CONTENTS
NO. NO.
• Executive Summary 7
1 Introduction of Home Loan Industry 8
1.1 Housing Market in India 9
1.2 National Housing Bank(NHB) 11
1.3 Indian Home Loan Industry 11
1.4 Introduction of HFFC 17
1.5 Mission 18
1.6 Core Value 18
1.7 Management Of HFFC 19
1.8 Organization Structure 20
1.9 Company Journey 21
1.10 Management Information System 22
1.11 Customer of the Company 23
1.12 Benefits of the company 24
1.13 About the Products 27
1.14 Pradhan Mantri Awas Yojana 28
2 Literature Review 29
3 Research Design 32
4 Data Analysis& Interpretation 36
5 Major Findings 49
• For any emerging economy, development of the housing sector has its own challenges.
The biggest of these challenges is access to finance. While investment in real estate is an
easy candidate for borrowing, real estate lending is more opportunity-based. In India,
access to finance for housing needs is largely concentric and focused at higher income
groups, as that is the sector where there are formal evidences of income such as salary
slips or income-tax returns. Since lenders tend to lend to sectors where lending is the
easiest, the lower segments of the population pyramid will remain unserved or
underserved, if the system was left entirely to itself. Therefore, there is a need, in every
financial system, to enable access to finance by lower segments of the population
pyramid.
• While the upper middle-income segment is well-served by banks and mortgage lenders,
the lower middle-income segment has low or no access to banks for mortgage finance;
creating a huge demand in this segment and lack of access of finance. The fact that the
upper segments of the pyramid are well-served is evident from the highly competitive
mortgage lending rates prevailing for the sector. There is also a much longer way to travel
in terms of ensuring the availability of housing finance to low income to middle income
groups.
CHAPTER 1
INTRODUCTION
HOME OF
LOAN INDUSTRY
• India has recorded increased demand for housing in recent years, mainly in urban areas,
consequent to the financial sector reforms in 1991 resulting in higher growth rates and
income levels. The increased demand is based on increasing levels of income and
savings, urbanization, emerging of a younger earning age group, decrease in the average
size of household and nuclearization of families.
• There was increased demand for commercial and residential space in metro/surrounding
areas due to phenomenal growth in sectors like retail, information technology (IT); IT
enabled services (ITES) and business process outsourcing (BPO) services. This boom in
demand was aided by easy availability of housing finance, and favorable tax regime. The
flow of money through foreign direct investment (FDI) and from non-resident Indians
(NRIs) also contributed to the growth of the sector. The increase in prices was not only
restricted to urban areas but was also existent in rural areas, where prices of land close to
the highways and city limits recorded phenomenal increases.
NATION
AL HOUSING BANK
• National Housing Bank has been playing an important role in regulating and supervising
the housing finance companies.
• In recent years, especially since 2001, a number of new players have entered the housing
finance market with competitive offerings which have helped increase the demand for
housing loans.
• These housing finance companies/banks have been passing on the benefit of lower cost of
funds to customers.
• Most of these financing institutions, besides simplifying the process of availing loans,
have also introduced new products and variants targeted at specific customer segments.
No Need of a Guarantor:-
Some banks have relieved their customer to find a guarantor for availing the home loan. Now-a-
days commercial banks have liberalized their laws for the customers to avail home loans. The
guarantor is no more required by the banks to get a loan sanctioned.
Loan period:-
According to the loan amount and the creditability of customers many banks provide a longer
period for repayment of loan amount, i.e. up to 15-20 years as maximum loan tenures, to lessen
burden on customers to repay their home loan.
b) Administrative fees:-
Administrative fee is a percentage of the approved loan amount. Housing finance
institution/banks or collects this amount for issuing interest certificates, maintaining customer's
records, technical and legal charges, etc throughout loan’s tenure. This charge is paid by the
customer on receipt of offer letter from Housing finance institution/banks. This payment is made
before availing the disbursement amount.
c) Rate of interest:-
Rate of interest is applicable throughout the loan amount’s tenure and is charged on the principal
monthly reducing manner. Customers are given an option to choose the rate of interest from
either a fixed or a variable rate by most housing finance institution/banks.
d) Legal Charges:-
Legal charges are levied by some housing finance institution/banks mainly Public Sector Banks
which they incur on their panel of lawyers on getting the property documents vetted.
e) Technical Charges:-
To meet their cost on visit to the customer’s property for ensuring quality of construction and
according to the norms of the respective approval authority, certain Housing Finance
Institutions/Banks levy technical charges.
j) Additional charges:-
Most housing finance institution charge a particular percentage on the delayed payment. When a
customer fails to clear the dues within a stipulated time frame these charges are levied.
k) Incidental charge:-
When a representative from housing finance institution/banks is sent for collection of
outstanding dues, incidental charges are payable from the customer which is normally charged at
an even rate per visit. Most housing finance institution/banks levy these charges.
l) Prepayment Charges:-
When a customer makes a part prepayment or a full repayment of the loan, penalty of
prepayment charges is charged by housing finance institution/banks. This is levied only on round
sum payments and not on the EMIs that is paid by the customer.
INTRODUCTION OF HOME
FIRST FINANCE COMPANY INDIA PVT. LTD.(HFFC)
• Home First Finance Company India Pvt. Ltd. is a dedicated Housing Finance Company,
established in 2010.
• It is registered with NHB (National Housing Bank) are the second largest players in the
housing market after commercial bank.
• HFFC was co-founded by former Mphasis Chairman, Mr. Jaithirth (Jerry) Rao and
former Citibank Consumer Banking Head, Mr. P. S. Jayakumar.
• It is a Housing Finance Company (HFC) set up to provide housing loans to buyers of
low-cost housing.
• It is serve the housing loan needs of mid and low-income borrowers, who are currently
unable to avail loans from Banks and HFCs due to lack of required documents and
employment in the unorganized sector.
• The company started operations in 2010 and a year later it raised funds from Bessemer
Ventures. Later, it attracted funding from Tata Capital Growth fund as well.
• First time buyers of affordable homes, are likely to have a number of queries regarding
various aspects of the home purchase process including obtaining a loan, eligibility,
documentation, repayment and so on. Some consumers may have questions about
ownership, registration and others that are not directly related to financing. We address
these apprehensions and handhold such consumers, as they make their journey towards
owning their home.
MISSION
• HFFC aims to serve the housing loan needs of low and middle income customers, who
are unable to avail loans from Banks and HFCs due to various factors.
• HFFC is focused on providing housing loans to buyers of affordable housing priced
between 5 lakhs and 30 lakhs.
CORE VALUE
MANAGEMENT OF HFFC
FOUNDERS
BOARD OF DIRCTORS
ORGANIZATION STRUCTURE
HFFC JOURNEY
• The company uses Salesforce online software for daily operation activities.
• It provides companies with an interface for case management and task management, and a
system for automatically routing so it helps to manage customer portfolio.
CUSTOMER OF THE COMPANY
• They are credit worthy customers who are excluded from the financial system due to
various reasons.
PRODUCTS
Hon’ble Prime Minister envisioned Housing for All by 2022 when the Nation completes 75 years
of its Independence. In order to achieve this objective, Central Government has launched a
comprehensive mission “Pradhan Mantri Awas Yojana – Housing for All (Urban)”.
The mission seeks to address the housing requirement of urban poor including slum dwellers
through following programme verticals:
• Slum rehabilitation of Slum Dwellers with participation of private developers using land as a
resource
• Promotion of Affordable Housing for weaker section through credit linked subsidy
• Affordable Housing in Partnership with Public & Private sectors
• Subsidy for beneficiary-led individual house construction /enhancement.
• I gathered these information these guildlines from the report which is issued by Ministry
Of Housing & Urban Poverty Alleviation, Government Of India
CHAPTER 2
LITERATURE REVIEW
• Here, during our management course I referred few books and magazines for obtaining
and understanding. It was also helpful in this research. The following are important
researches are helpful in this research.
• Vandell, Kerry D Analysis in the Year 2008 And He Analysis the Sharpe rise and then
suddenly drop down home price from the period 1998-2008. Changes in prices are for the
reasons as such economic fundamentals, the problem was not subprime lending, but the
dramatic reduction, then increases in interest rates during the early mid-2000,the hosing –
boom was concentrated in those market with significant supply side restriction, which tend
to be more price- volatile; and the problem was not excess supply of credit in aggregate, or
increase in subprime percentage but rather in the increased or reduced presence of certain
another Mortgage products.
• Mrs. Aarti Varma (March 2015) in their research paper title “a study on customers view
and perception towards home loan” researched to know the perception of consumers towards
home loan segment. Taking 200 respondents and questionnaire as primary data and using
technique as random sampling method.
CHAPTER-3
RESEARCH DESIGN
PROBLEM IDENTIFICATION
• Home is a dream of person that shows the quantity of efforts, sacrifices of luxuries, and
above all gathering funds little by little to afford one’s dream
• Banks, whether commercial or financial, provide home loans to the people who want to
have a home. Home loans are provided at a competitive rate to attract customers towards
them.
• Every bank has its own loan procedure among customers. Customers are presented with
a number of options to choose.
• Discovering customer preferences enables the banks to sell its services in advance and
use the collected information to make its services perfect before placing it on the open
market and develop an effective long-term marketing plan to gain competitive advantage.
Descriptive research:
• Descriptive research is used to describe characteristics of a population or phenomenon
being studied. It does not answer questions about how/when/why the characteristics
occurred.
SOURCES OF DATA
•
•
SAMPLING PLAN
• Sampling Method:
• Judgmental sampling method: As the name suggests, this involves collecting a sample
from somewhere convenient to you: the mall, your local school, your church. Sometimes
called accidental sampling, opportunity sampling or grab sampling.
• Sample Size: The unit of observation is the home loan companies in AHMEDABAD,
total sample size considered was 102 respondents.
.
CHAPTER-4
DATA ANALYSIS
&
INTERPRETATION
PRIMARY RESEARCH
• My project aim to study the perception of consumers towards home loan and
their preferences for various parameters, for which I surveyed 100 perspective
customers.
GENDER PERCENTAGE (%) COUNT(N)
Male 76.47% 78
Female 23.53% 24
Total 100.00% 102
• AGE GROUP
AGE PERCENTAGE (%) COUNT(N)
Less than 30 21.57% 22
30-40 43.14% 44
41-50 28.43% 29
50 & Above 6.86% 7
Total 100.00% 102
Mean 2.21
Standard Deviation 0.860
• INCOME SLAB(MONTHLY)
• OCCUPATION
OCCUPATION PERCENTAGE(%) COUNT(N)
Salaried 34.31% 35
Self Employed 45.10% 46
Professional 8.82% 9
Other 11.76% 12
Total 100.00% 102
Mean 1.98
Standard Deviation 0.954
• Almost Half (i.e.45%) of the respondents were self-employed, followed by the salaried
class (34%),only 8% were professionals and 12% consisted of retired people and
housewife’s.
• So,In this survey we will easily know the perception of businessmen, who don’t have any
income proof which is essential required in some private & public bank.
• Nearly 48% agreed that they would like to go with Nationalized Banks, Owing to various
reasons like lower rate of interest as well Trust & Reputation. About 30% choose private
banks to be a better option on ground of faster processing and adequate loan availability.
On similar ground 18% opted for National housing banks and remaining 4%suggested
options like money lenders and relatives on grounds of security and flexibility
TOTAL 16 2 2 5 1 102
• With the majority(I.e.75%) saying not to have opted for a home loan from a finance
company, The remaining 24% that said yes ,Have taken the same for new
property(69%),followed by balance transfer loan of nearly 12% ,Resale Property
and others standing at a tie of 8.5%,and only 3% Renovation and Re Development.
• There was only a minor difference of 6% between respondents having and Not Having
their own house, and that of 8% between those who were Planning and not planning to
Purchase their own house
• On asking about the choice between smaller installments and small repayment period,
nearly 52% gave preference to the Former and 48% to latter.
• So majority people agreed that they will small installment with longer tenure which is
more flexible for them.
• The Respondents seemed well informed, A greater number(71%) were aware of the
subsidy they are entitled to under “Pradhan Mantri Awas Yojana” ,owing to various
sources like advertisement’s ,Banks, Builder and other sources
• I also saw that the people don’t have their own house, they specially forced to buy new
home to take a advantage of subsidy scheme, the amount of advantage is up to
Rs.2,67,000.
• Nearly 48% said that easy availability of finance was the major reason for choosing a
Finance company, The reference by builder stood at 28% ,Less Paper Work &
Documentation at about 20%,and 4% to other reasons
• With regard to influencing factors, the influence of friends & Relatives stood at 35% and
Trust on the institution stood at 33%, Advertisements influenced about 22%
respondents ,and other factors like Loan requirement, Security & Convenience and Time
were given importance by 9% respondents.
• So, it is crystal clear shown as people believes in experience of others & they have more
trust on friends & relative rather than advertisement. They also consider trust &
reputation factor according to their perception.
• I identified 5 key factors which play a key role in decision making for a home loan
they were
1. Interest Rate
• Respondents were asked to rate them on a Likert Scale from “Highly Important” to
“Highly Not important”, and the responses were as below
• RATE OF INTEREST
Hypothesis Test
Test:- 1
H0: There is no significant association between Gender And Fast And
Efficient service of the bank.
H1: There is significant association between Gender And Fast And
Efficient service of the bank.
Gender Fast And 0.000 < 0.05 H1 accepted
Efficient
service of
the bank.
Gender: 1 6 20 45 71
2 11 0 20 31
Total 17 20 65 102
The analysis is based on significant association between Gender and Fast and Efficient service of the bank and here
the test used is chi-square.
As above table suggest the Pearson chi-square value is 0.000 which is less than 0.05 so that the null hypothesis will
be rejected.
So we can say that there is significant association between Gender and Fast and Efficient service of the bank.
Test:- 2
H0: There is no significant association between Gender And Reliability and
bank Employees Cooperation.
H1: There is significant association between Gender And Reliability
and bank Employees Cooperation.
Total
9 32 17 71
Gender: 1 13
3
11 17 31
2
0
12
43 34 102
Total
13
Test:- 3
H0: There is no significant association between Gender And Goodwill and
Reliability of institution.
H1: There is significant association between Goodwill and Reliability
of institution.
9 14 32 71
Gender: 1 16
6
08 17 31
2
0
15
22 49 102
Total
16
The analysis is based on significant association between Gender And Goodwill and
Reliability of institution and here the test used is chi-square.
As above table suggest the Pearson chi-square value is 0.038 which is less than
0.05 so that the null hypothesis will be rejected.
So we can say that there is significant association between Gender and Goodwill
and Reliability of institution.
CHAPTER 5
MAJOR FINDINGS
• To develop our findings i surveyed nearly 102 people and their perception towards
home loan, about 78% respondents being male and 22% being female, most of them
belonged to the age of 30-40 years, majority of respondents being in the income group of
15000-24999 followed by 25000-39999 helped us to study the perception of people
opting for affordable housing.
• Almost half of them being self-employed, and were keenly interested to know about the
offer prevailing at the builder sites at the auspicious occasion of rath yatra and guru
purnima.
• As far as accounting for income was concerned despite being self-employed the
accounting was in combination of cash and bank for the majority (ie-42%),Whereas
22% had accounting in bank accounts, a major reason associated with this was the
Pradhan Mantri Jan Dhan Yojana ,which has opened the avenues of banking for the
lower classes and the recent Demonetization which has encouraged banking
transactions, as told by our immediate supervisor and boss MsNeelimaVerma.
• Documentation being a major reason why most of lower income groups fail to avail
from Nationalized banks, a major observation was 58% of respondents not filing IT
returns. Despite the fact that their preferences were nationalized banks owing to various
reasons major ones being lower interest rates, Trust & Reputation. However, some
gave greater importance to processing time and better service and preferred private
banks.
• Rate of interest being a major parameter for home loan selection, other factors like
Trust & Reputation, processing time, safety & flexibility were given considerate
importance.
• The recent implementation of the G.S.T has however increased at 18% the ambiguity of
interested respondents and builders regarding the Stamp duty which shows higher charges
implemented by government. We seen that many people refused to pay high stamp duty
where their house was booked before G.S.T Launch date.
• Making a clear calculation of the interest they will pay and subsidy they will be entitled
to they are taking rational decisions after conserving the female members in family not
having a documented home on their own name.
CHAPTER 6
CONTRIBUTION
&
LEARNING
CONTRIBUTIONS
• In the Initial days of my Job I went for the SWOT Analysis and competitive analysis of
the company, the major competitors of our company being Indiabulls, Gruh Finance and
Punjab National Bank.
• The reason behind this analysis is to know the different strategies of competitors &
sales data of these competitors.
• Followed by which i operated for a few days from one of the largest affordable housing
project of our company ,Devnandan which is located in Naroda, it helped me to learn
how i am able to pitch the customers for home loan how we are to give them an idea
of the instalments and the tenure of their loan.
• After this i again approached as mystery shoppers to some of the other affordable
housing projects which is located at Naroda side to check if they are having tie ups with
any of our competitors and if they are offering any advice to take loans from specific
finance companies so that we could inform our bosses on perspective builders for tie-ups
with them, So here main reason was to target the other projects which will be ready in
upcoming years.
• The second phase of work The Marketing Campaign, where i had the maximum
learning began.
• The campaign began with putting up banners behind auto rikshaw with the
advertisements of HFFC providing affordable home loans without any income proof that
attracted many customers.
• And then we got tremendous response of customer we were getting back to back calls
from the customers regarding the home loan mortgage loans but some false inquiries was
about PL and Business loan that’s not our product by far
• It was a time where we got first hand experience of core marketing there were times
where people were very welcoming and showed keen interest in what we had to
offer ,clear there doubts and know more about the location , terms of finance, the rates
and range of flats available and what would be the documentation and income criteria.
• The subsidy available under Pradhan Mantri Awas Yojana served as a major attraction
which helped us to lure the candidates into visiting our site. We even identified some
“Hot Interested” customers so that we could keep a track and follow up of their date of
visit and interested in other properties.
• There were few incidences as well where some people expressed dissatisfaction on
ground of higher interest rates ,High Processing Fees, Location Problem and
property being far away from work places ,in response to which we offered them
prospective solutions at our level and tried to help them.
• After our regular visits we even kept called them for follow up’s and created leads in our
systems using with “Sales Force” so that we and our bosses can keep a track of them and
try to convert them into clients.
• The campaign continued for about more than two weeks which resulted into mass
walk-ins and calls, many customers who had interacted with us approached and took
details of the scheme whereas many successfully booked the flat and availed the home
loan .Our work also constituted of showing sample flats to the customer since we were
the financial partner at Pusph heights & Ambuja Avenue.
• The next few days were dedicated to continuously keeping track of the interested
customers so that our competitors don’t target them, for those who found the housing
scheme expensive we had a number of options in their respective areas for which we
invited them to office.
• I even worked at another site “Ambuja Avenue”, situated near narol for the same.
CHAPTER 7
RECOMMENDATION
• Company has to create a sense of security among the customers, because most of the
people fear about security.
• To broaden the customer base the vast middle income strata should be fully exploited.
• Simplify the procedure, reduce service charges & demand only the basis essential proof.
• As a result of personnel survey conducted it was found that most of the customers are in
favour of higher amount of limits at lower rate of interest with lower instalment with
longer tenure.
CHAPTER 8
CONCLUSION
• Home First Finance Company Pvt. Ltd. is good reputation in Home loan market. Due to
New housing project in Ahmedabad, company has built good image among the
customer. The success factor of HFFC is hard work, discipline, co-operative structure of
its employees and it help to the company to achieve customer satisfaction level. The
company also maintains good relationship with its customers.
• The results and findings of this research study exemplifies the fact that an in - depth
market research has been conducted and all the objectives set for the research work has
been fully accomplished and the analysis is also performed to the maximum extent
possible.
• Working in HFFC is a great experience, Not only did I got an opportunity to apply the
concepts of marketing learned in the real field which helped me to brush on my
marketing skills, under the esteemed guidance of our leader and boss Mr Happy Prakash
Pandey, I underwent a vigorous marketing campaign and learned a great deal as to how
our company handles its potential customers to generate leads, a learning which will
help me a great deal in future
CHAPTER 9
REFERENCES
CHAPTER 10
ANNEXURE
QUESTIONNAIRE
1.Name: _______________
2. Gender
Male Female
3.Age
4. Salary Slab(Monthly)
Less than 15,000. 15,000 to 24,999
5. Occupation
Yes No
8. Would you take home loan from finance company?
Yes No
9. If yes, for which property purpose you took home loan from finance company?
Yes No
Yes No
12. Are you aware of Subsidy Scheme under “Pradhan Mantri Awas Yojana” ?
Yes No
18. Which factor is influence you most for home loan decisions?