CHAPTER – 1

INTRODUCTION
 CHAPTER – 1

INTRODUCTION

INTRODUCTION

This is an art of preparing an educative project report offers to

provide some aspects and details regarding to Analytical Study of Various
Financial Products with the special reference to Muthoot finance, Sagar.
In this project report, the marketing financial activity has been brought out
in abroad & also the details regarding the financial services & its marketing
activities.

In this project report an attempt is made to bring out the details

regarding the history and achievements for the dynamic growth of the
Muthoot finance. The era of finance which has been taken a talkative role
has also been described.

As we know finance plays a vital role in the market and

development of economy. Financial services are needed for every
organization to run the business efficiently. It is required in all sectors of
the market i.e., education, Govt, business, trading, agriculture small scale
business etc. Finance plays a main role in day to day life. Finance includes
money, financial policy, financial services and financial consultants. Finance
is considered as ‘life blood of an organization’. It is important in
development of economy. Finance increases the savings and mobilization of
funds. It is very useful in new innovations in service sector.
MEANING OF FINANCE

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

business.

Particularly in production and marketing activities. The finance

functions in the same way as oil functions in the operation of machine or
blood functions in the human body.

In the absence of finance, nobody can image either of setting up a

business or its operations and development. Not only this, finance is
needed in those areas where economic activities of any type are performed.

Generally speaking, business finance means the arrangement of

finance for all business activities. Since the objective of the business is to
earn profit and for the operations of business activities, organization of any
type (sale proprietorship, firm or company is very much needed, it can
easily be deduced that the business finance is related to the financial
arrangement of the organizations set up and operated for the objective of
earning profit.

Finance often signified the money and it studies as how do an

individual, businessman, investor, financial institutions and also
government manage and operate the finance, i.e. Money. Experts have
never held common opinion with regard to finance.
DEFINITIONS OF FINANCE

According to Husband and Duckeny:

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

According to Osborn, R.C

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

According to Bonneville and Dewey

“Financing consists in raring, providing, managing, of all money,
capital or funds of any kind to be used in connection with the business”.
 CHAPTER-II
FINANCIAL SERVICES
 CHAPTER-2

FINANCIAL SERVICES

The financial services can also be called financial intermediation is a

process by which funds are mobilized from a large number of savers and
make them available to all those who are in need of it and particularly to
corporate customers. Thus, financial services sector is a key area and it is
very vital for industrial developments. A well developed financial services
industry is absolutely necessary to mobilize the savings and to allocate
them to various investable channels and thereby to promote industrial
development in a country.

FEATURES OF FINANCIAL SERVICES

Some of the characteristic features of financial services are as follows.

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

IMPORTANCE’S OF FINANCIAL SERVICES

 Following are the some of the points which shows the importance
of the financial services.

 Finance is “lifeblood” of an organization.

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

REASONS FOR GROWTH OF FINANCIAL SERVICES

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

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

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

POLITICAL AND LEGAL

When the country improves financially growth, automatically the
political and legal condition of the country also improves.
SOCIAL AND CULTURAL
 When the country stands financially fit then the living standard of
the peoples also increases automatically and also the culture of the nation
is saved.

TYPES OF FINANCIAL SERVICES

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

I. Long-Term Finance Sources:

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

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

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

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

Working capital requirements to increase wit the growth of business

concern and which can be met by reinvesting the profits in business itself.
c) Reserves:

Like retained earnings, various types of reserve also do not involve

any fixed charge on business earnings and therefore the use of such
reserves in financing working capital is also considered as proper and
profitable.

d) Sale of fixed assets:

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

e) Retiring current liabilities below book-value:

A business concern may avail some discount while making payments
against current liabilities i.e. discharging the current obligations. Similarly,
provisions for taxes and other known expenses are created and it is just
possible that actual payment on these score may be less than their book
values should be considered as non-recurring source for financing working
capital.
II Borrowed Sources/External Sources:
Under this component of long-term sources, the following are
included.

a) Debentures:
Business concern may also raise funds for financing the working
capital by issue of debentures in the same way as the issue of shares. It is,
however, noticeable that issue of debenture created fixed burden (in the
firm of interest) on the business used after considering the progress of the
business, stability of business earnings, risk factor etc.

b) Long-term Loans/debts:

In addition to the issue of debenture, a business concern may also

obtain funds for working capital as loans from financial corporations,
trusts and investment companies.

II. Medium Term finance:

On the basis of terms of duration. The business finance is classified

into 3 types of Medium Term of finance is that,
Medium Term finance:

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

1) Commercial banks:

Commercial banks provide medium term finance to traders and

manufacturers against security.

2) Insurance companies:
The insurance companies also provide loan to manufacturers against
the security of assets.

3) Industrial development bank of Pakistan:

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

4) Pakistan industrial credit and investment corporation CPICIC)

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

III. SHORT TERM FINANCE

As mentioned in the preceding chapter, variable working capital is

normally financed through short-term sources including spontaneous ones.
Following may be included in this category.

1) Trade Credit
2) Bank Credit
3) Public Deposits
4) Inter-corporate Deposits
5) Advances from customers
6) Internal sources
7) Some new and innovative sources (Non-Bank) such as
a) Commercial Paper
b) Convertible Debentures
c) Factoring

1) Trade Credit:

Sellers/suppliers of different kinds of product/raw materials provide

credit to their customers spontaneously as per trade conventions. It is a
common experience that a substantial part of purchaser of goods and
services in business are on credit terms rather than against cash payment.
While the seller or supplier of goods and services may perceive credit as a
lever for increasing the sales volume, the buyer customer) may look upon it
as an alternative to loaning for the purchase. The credit offered by the
seller/supplier in known as Trade credit or Bills payable also as Accounts
payable or Notes payable in America). Depending upon the nature of credit
allowed.

All the successful business concerns which have good record of

payment and/or good credit rating are availing this trade credit
continuously. One point should always be remembered, i.e. trade credit is
extended in connection with goods or raw materials bought for resale or
processing and resale and it is different from consumer credit which is
offered to individual for buying goods for ultimate are/consumption. It is
also different form installment credit. Trade credit is an example of
spontaneous source of capital which flows in natural course of the business
in keeping with established trading practices. It does not require any loan-
negotiation or security margin. In India, trade credit is considered to be a
very important source of short-term finance and 20 to 25 percent of short-
term sources are obtained from trade credits.

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

Banks provide short-term finances in the following forms

a) Overdraft:

Customer/clients having current account in the bank may avail the

benefit of overdraft upto a certain limit from their bankers. Customer can
overdraw to that extent any time and may repay the amount any time.
Interest is charged by the banker only on that amount which has been
overdrawn by the customer subject to a minimum charge. Overdraft
account operates against security in the form of pledge of shares and
securities, assignment of life insurance policies and sometimes even the
mortgage of fixed assets.

b) Cash credit:

Commercial bank provides cash credit facilities to its

customers/clients for meeting their short-term financing requirements. It
is such regular system under which bank offers the facilities to clients to
withdraw the money within the limits pre-fixed by the bank. The security
offered by the clients is in the nature of hypothecation of stocks or
promissory notes bearing signatures of other persons also.
c) Discounting trade bills:
Sellers often draw bills on their customers purchasing goods on
credit. The purchases give their acceptance. Such bills are being
discounted by the sellers for arranging short-term funds. In other words,
bank provides finance to the customers either by outright purchasing or by
discounting bills receivables held by the customers. Obviously, bank will
not pay the full amount and therefore charges something as discount

d) Opening of letters of Credit:

Letter of credit is opened by a bank in favors of its customer
undertaking the responsibility to pay the supplier of goods if its customer
fails to pay for goods purchased within the stipulated time. Under this
scheme of bank finance, bank does not provide finance; rather it assumes
the risk of non-payment by its customer.

Bank provides short-term credit in the above forms to its customer.

However, bank credit system is subjected to a number of regulations as
discussed at the end of this chapter.

3) Public Deposits:

Regulations imposed on the availability of bank credit induced many

concerns to explore alternative sources of financing the working capital
and the mobilization of savings from the general public was rated to be a
very important alternative source. Funds thus mobilized form general
public deposits by non financial and non-banking companies is a very old
system. A number of textile mills of Ahmadabad, Surat and Mumbai started
to avail this source of finance which became very popular later on.
 In or country the evolution of inter corporation deposits took place
in the seventh decade of the twentieth century. Both demand and supply
were equally responsible for this. There is no control on the short-term
market of inter-corporate deposits

However, long-term deposits are made (covered under sec 58 A) of

the Indian Co, AC and accepted freely among the corporate bodies.

5) Advances from customers:

Many times some produces/sellers receive whole or part of the

amount of gods quite in advance and such amount remains with them till
the supply of goods. Normally, no interest is paid on this amount.
Therefore, it is the cheaper source of short-term financing but resort to
their method can be made only by some reputed and well-settled concerns.
In case of industries, where tough competition is noticed, no advance can
be received rather goods are to be sold to customers on credit terms.

6) Internal Sources:

When a business concern establishes a depreciation fund/reserve,

this can be used to provide for working capital financing at least till these
are needed for replacing the assets. Similarly, the plough-back of profit or
retained earnings can be useful for providing working capital finances.
Again provision for tax can also be utilized I the same way.

7) New and innovative Sources:

A number of significant changes have taken place in short-term

finance or money market in India during the last 10 to 15 years. Some
more important are as under.
a) Commercial paper Corporation {C.P. C }:

Commercial paper is a short-term money market instrument which

is considered as most ideal both for investors as well as for corporate
sector borrowing from banks for working capital requirements. While
high-rate companies may take advantage of this source the investors too
can earn profit by using their short-term funds.

As a source of short-term fund, commercial paper is most popular in

Japan and western countries. In the USA, it is in vogue. For over 100 years,
while in European countries and Japan its origin is of recent one. In our
country, Reserve Bank of India permitted the issue of commercial papers in
the year 1989

3) Commercial paper is a promissory note which is negotiable by

endorsement and fit for delivery with a fixed maturity between one month
to one year and it is issued on discount basis

It helps to raise short-term debt at attractive rates. It is an

unsecured instrument and is not tied up to any specific business
transaction. It does not carry any collateral security. Thus, commercial
paper becomes a substitute source and not an additional source.

b) Convertible debentures:

For augmenting funds for working capital along with long-term

purposes, there is one more source, i.e. the issue of convertible debentures.
It has been gaining popularity since last two decade or so. Since banks
generally grant loans/advances only on the security of current assets, the
issue of debentures is regarded as the only other appropriate alternative
source for raising capital including working capital

The issue of bearer debentures in normally not permitted. Similarly,

the issue of debentures is not permitted just to prevent an enterprise from
closing down due to recurring losses.

Even the permissible rater of interest on convertible and non-

convertible debenture is notified by the government form time to time.

c) Factoring:

One most recent source for financing working capital in factoring. In

fact, factoring is also a business activity in which a financial intermediary
called factor) takes the responsibility of collecting the debtors or
receivables of a manufacturing trading concern called “Seller or Clint”.

In other words chief financial executive instead of discounting the

bills from bankers seller the debtors and receivables to a special financial
institution. Factor, i.e. financial institution assumes total responsibility of
sales ledger administration and collections from debtors. Thus, “Factoring
is a continuing arrangement between a financial intermediary called
factory “and seller of goods and services (called client). Factors are
generally subsidiary of either Bank or private Finance companies.

It is also important to note that factoring should not be considered as

related only to a specific transaction rather it should be considered as a
continuous arrangement. In fact, it takes care of all receivables emanating
from the credit sales of its client. In this sense, factoring is a financial
service designed to help companies in managing the receivables in a better
way.
 CHAPTER -3
COMPANY PROFILE
 CHAPTER -3

COMPANY PROFILE

COMPANY BACKGROUND:

The Muthoot Group is a 123 years old business based in India and
interested in financial services, Information technology, Media and
Entertainment, Health care, Education, Power generation, Infrastructure,
Plantations, Precious metals and Hospitality. The Group takes its name
from the Muthoot Family based in Kerala. The Company was set up by
Muthoot Ninan Mathai in 1887 at Kozhencherry , a small town in the
erstwhile Kingdom of Travancore (Kerala). It was then later taken over by
his son M John Muthoot who incorporated the Finance division of the
group which was till then primarily involved in wholesale of grains. The
company is now managed by the third and fourth generation of its family
members.
Muthoot Fincorp Limited (MFL) the flagship Company of the 20,000
Crore Muthoot Pappachan Group . A market leader in the gold loan
business Muthoot Fincorp has over 1280 branches spread across the cities,
towns and villages of India, the Company serves an average of 45,000
customers a day. Muthoot Fincorp’s long-standing experience, expertise
and stronghold in the semi urban and rural areas have enabled the
Company to provide quick, customized finance options and investment
products, maximizing returns to the population. The loan products of
Muthoot Fincorp are uniquely structured to serve people who do not have
easy access to mainstream commercial banks.

MFL counts the satisfaction and long-service of its people as a

cornerstone of its success. Fostering teamwork, nurturing creativity and
rewarding dedication to commitment are systematically and professionally
managed. Excellence and innovation are encouraged and rewarded.
Ensuring MFL’s people remain at the competitive edge, best practice in the
area and unique motivational programs are regularly carried out by the
Training and HR departments.

The company recently announced plans for an IPO (Initial Public

Offering) before the year 2014. In addition there are plans to implement an
ESOP (Employee Stock Ownership Plan) before 2012

Muthoot Fincorp is a subsidiary of Muthoot Groups was established in

1939 and primarily involved in financial sector of the country. Muthoot
Fincorp falls under the category of Non Banking Financial Company
(NBFCs) of the RBI guidelines. Muthoot Fincorp limited is a finance
company catering to the financial needs of retail and institutional
customers. It is registered with the Reserve Bank of India as a systemically
important non-deposit taking non-banking finance company (NBFC) with a
paid up capital of Rs. 60 crores and a Net Owned Fund of Rs. 403 cores.
Muthoot Finance is also the highest credit rated Gold Loan company in
India, with a credit rating of AA-(CRISIAL) for its long term debt and P1+
(CRISIAL) and A1+ (CRISIAL) for its short term debt Instrument. It has a
diverse mix of retail offerings in the areas of Consumer loan products and
investment advisory services. These include Gold loans, Home loans, Auto
loans, Business loans, Loans against Property, Investment products and
Advisory Services, Secured Debentures etc.

Muthoot Finance a subsidiary of Muthoot Group was established in

1939, and is primarily involved in the financial sector of the country. We
are the largest gold financing company in India in terms of loan portfolio.
We provide personal and business loans secured by gold jewellery, or Gold
Loans, primarily to individuals who possess gold jewellery but could not
access formal credit within a reasonable time, or to whom credit may not
be available at all, to meet unanticipated or other short-term liquidity
requirements. Our Gold Loan portfolio as of March 31, 2010 comprised
approximately 2.8 million loan accounts in India that we serviced through
1,605 branches across 20 states and two union territories in India.
According to the IMaCS Industry Report 2009, as of March 31, 2010 our
branch network was the largest among gold loan NBFCs in India. We have
since increased our branch network to 1,921 branches as of August 31,
2010, and used our branch network to serve an average of 53,989
customers per day in the month of August 2010. As of August 31, 2010, we
employed 12,220 persons in our operations. Muthoot also provides various
financial services such as Insurance distribution, Wealth Management,
Foreign Exchange, Money Transfer and Vehicle & Asset Finance. Muthoot
Finance was selected as one of the Top 10 Finance companies to work for
in India by Naukri.com. Muthoot Finance privately placed 4% of its paid up
capital to Private Equity players - Barings India and Matrix Partners India
for Rs.1.57 billion, hence valuing the earlier privately held company at over
$1 billion.

We are a Systemically Important Non-deposit taking NBFC head

quartered in the southern Indian state of Kerala. Our operating history has
evolved over a period of 70 years since M George Muthoot (the father of
our Promoters) founded a gold loan business in 1939 under the heritage of
a trading business established by his father, Ninan Mathai Muthoot, in
1887. Since our formation, we have broadened the scale and geographic
scope of our retail lending operations so that, as of March 31, 2010, we
were India’s largest provider of Gold Loans. In the years ended March 31,
2008, 2009 and 2010, revenues from our Gold Loan business constituted
95.97%, 96.71% and 98.08%, respectively, of our total income. In addition
to our Gold Loans business, we provide money transfer services through
our branches as sub-agents of various registered money transfer agencies,
and recently have commenced providing collection agency services. We
also operate three windmills in the state of Tamil Nadu.

We issue secured non-convertible debentures called “Muthoot Gold

Bonds” on a private placement basis. Proceeds from our issuance of
Muthoot Gold Bonds form a significant source of funds for our Gold Loan
business. We also rely on bank loans and subordinated debt instruments as
our sources of funds. As of March 31, 2010, we had Rs.27,192.5 million in
outstanding Muthoot Gold Bonds and Rs.25,612.7 million in other
borrowings. We also raise capital by selling a portion of our loan
receivables under bilateral assignment agreements with various banks that
purchase our portfolio primarily for meeting their priority sector lending
commitments.

Our customers are typically small businessmen, vendors, traders,

farmers and salaried individuals, who for reasons of convenience,
accessibility or necessity, avail of our credit facilities by pledging their gold
jewellery with us rather than by taking loans from banks and other
financial institutions. We provide retail loan products, primarily
comprising Gold Loans. We also disburse other loans, including those
secured by Muthoot Gold Bonds. Our Gold Loans have a maximum 12
month term. Our average disbursed Gold Loan amount outstanding was
Rs.26,183.0 per loan account as of March 31, 2010. In the year ended
March 31, 2010, our retail loan portfolio earned, on average, 1.67% per
month, or 19.94% per annum.
As of March 31, 2008, 2009 and 2010, our portfolio of outstanding
gross Gold Loans under management wasRs.21,790.1 million, Rs.33,000.7
million and Rs.73,417.3 million, respectively, and approximately 30.1
tons,38.9 tons and 65.5 tons, respectively, of gold jewellery was held by us
as security for our Gold Loans . Gross non-performing assets ("NPAs") were
at 0.42%, 0.48% and 0.46% of our gross retail loan portfolio under
management as of March 31, 2008, 2009 and 2010, respectively.

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

PROFILE OF FOUNDER OF MUTHOOT GROUP

In 1887, in Kozhencherry a quiet hamlet surrounded by plantations in

the Southern state of Kerala, India, Mr. Ninan Mathai started a retail
business along with his plantation ventures.In time, his sons took over the
reins and re-established the business. With their youthful vision and
combined strength it soon flourished. In 1939, the brothers established the
Muthoot Chit Fund Enterprises, providing small and medium loans to
farmers and merchants. In a short span of 10 years it became the largest
business house of its kind in Kerala.
They soon moved into full fledged banking operations. They
specialised in gold loans and advances to small enterprises and individuals
on quick and easy terms. This ensured rapid growth. The brothers then
decided it was time to bifurcate and thus was born the Muthoot Pappachan
Group, founded by his youngest son Mathew M. Thomas or Muthoot
Pappachan as he is fondly known. Under his watchful eye the group has
since diversified into financial services, hospitality, flight catering, travel
services, IT infrastructure, property development, the automotive sector
and alternate energy. A simple and devout man Muthoot Pappachan
espoused a nine point formula that stood by him in realising his goals. They
are love, peace, happiness, kindness, helpfulness, patience, pleasantness,
faithfulness, and self control.

These ethics have been a guiding light to the path of his successors
and have permeated every strata of the Muthoot Pappachan Group. The
same values still govern every decision in the Group. When asked for his
formula to success he quipped, “unflinching faith in the Almighty and
unshakeable determination to face and overcome challenges.” In dire
circumstances and sometimes in the face of loss he was heard to quote that
a debit on earth will be a credit in heaven. A man, known to adhere to his
word, he instilled these values throughout the organisation he nurtured.
The Muthoot Pappachan Group carries Muthoot Pappachan’s legacy on
with his words in our hearts “I am because God is with me.”

ABOUT THE BOARD OF DIRECTORS:

Thomas John Muthoot

 The Muthoot Pappachan Group is headed by Chairman and Managing
Director, Thomas John Muthoot. With a vision for the future and rooted in
the values imparted by his father, he has effectively spearheaded the group
over the past twenty five years into one of Kerala’s leading financial
powerhouses. He also paved the way for the diversification of the group
into other major industries like power, hospitality, automotive and more.
He is also a member of the Chamber Of Commerce, Trivandrum, and
Treasurer of the Trivandrum Agenda Task Force.

Thomas George Muthoot

Thomas George Muthoot is the quiet strength behind the visionary
growth of the group. The twin of John Muthoot, Managing Director of
Muthoot Capital Services and Director of all other units of the Muthoot
Pappachan Group, his penchant for technology and efficient administrative
skills ensures the group stays on the cutting edge of development. He is
also the Chairman of Kerala Non-Banking Finance Companies Welfare
Association, Kochi and on the managing committees of Indo-American
Chamber of Commerce-Kerala Branch, Kochi and Equipment Leasing
Association of India (ELAI), Chennai.

Thomas Muthoot

Thomas Muthoot is Director- Strategic Initiatives and Director of other

units of the group. An expert in Micro credit and Micro saving business
with a great desire to serve the masses, he is innovative with need based
financial products. His knowledge of emerging markets and their functions
have been harnessed in structuring the business interests of the group. He
is also the Vice President of Ernakulam District Cricket Association and
Managing Committee member of Kerala Cancer Care Society.
THE COMPANY PRODUCT LINE AND FEATURES OF THE PRODUCT

As far as services are concerned, Muthoot Fincorp provides various

services according to the needs and requirements of its customers.
Basically its core services are gold loan and swarnavarsham. Muthoot
fincorp has strategic alliances with leading companies which grant its
customers access to premium services at affordable costs. For money
transfer –Western Union money transfer ,Motilal Oswal –For investment
advisory services and share broking, For Mutual Fund -Franklin Templeton.
Muthoot Fincorp also provides SD (secured debenture) and FD (fixed
deposits). In gold loan it provides various types of schemes for customer
like 3 minutes express gold loan, smart plus gold loan. In 3 minutes express
gold loan one can get loan up to 90 per cent of gold depending upon the
purity level of gold within three minutes on an monthly interest of 2 per
cent. But in Smart plus gold loan the benefit of paying back in Equated
Monthly Instalments, The EMI is apportioned such that the larger amount
goes toward repaying the principal, no foreclosure charges,Part release and
repledge is allowed, and Rebates on prompt payment. Apart from EMI
option it also provides different interest rate depending upon time period
and loan amount, here interest is also calculated on diminishing balance
method. In smart plus gold loan more flexibility is there as compared to 3
minute express gold loan.
In FD (fixed deposits) one get double its money in five years and the
minimum amount in FD is Rs 10,000/. In case of secured debenture
company provides security of property and assets which attract the
customer’s attentions.
MARKETING STRATEGIES
As its marketing strategies suggest Muthoot Fincorp provides
attractive offers to its customers at the time of festivals like Akshaya
Trithiya. Apart from it advertisement is given in News papers and FM,
celebrities and sport stars also used in the advertisement campaign.
Muthoot Fincorp also host some local events(20-20 cricket
tournament,Israel open tournament ) in Kerala and other states in south
India.

COMPETITORS
In gold loan market there are different players like banks, NBFC and
local pawn brokers and jewelries. In banking sector HDFC, Bank of India,
Axis Bank, SBI, syndicate Bank etc. are providing gold loan. In Non-Banking
Financial Sector there more competitions among the competitors and also
there big competitors name like Muthoot Finance, Mannapuram gold loan,
Karvy Finance, Future capital gold loan, Reliance gold loan, Mahindra
Finance, and also some other players are involved. In India nearer about 70
per cent of market share is in the hands of local jewelries and pawn
brokers. Muthoot Fincorp objectives is to capture these 70 per cent market
share and its biggest competitors is Muthoot Finance and Mannapuram
gold loan. Some of the new players like Karvy Finance, Mahindra Finance
gold loan, Future Capital comes into market which is a threat for Muthoot
Fincorp. Though there are many competitors in gold loan market but still
Muthoot Fincorp is successfully running its business more than six decades
and earned a profit of more than 200 cores in the fiscal year 2010-11.

ACHIEVEMENTS
 Muthoot Finance is the highest credit rated Gold Loan company in
India, with a credit rating of AA-(CRISIAL) for its long term debt and P1+
(CRISIAL) and A1+ (CRISIAL) for its short term debt Instrument. Its Mahila
Mitra loan portfolio touches 10,000 women micro entrepreneurs. In last
two months it successfully opened 200 branches in northern part of India.

FUTURE PROSPECTS
Earlier Muthoot Fincorp was only in Kerala, and then it slowly expands
its business and now having more than 700 branches in south India. Then
in the early 2000 it expand its business Gujarat and in north India. At the
same time this NBFC Company provides a wide choice of services to its
customers. Now its next step will be to open another 200 branches in north
India and then to shift east India. So one can say that Mthoot Fincorp is on
expansion mode and in next 10 year it wii open its branches in entire
India.

MARKET LEADING POSITION IN THE GOLD LOAN BUSINESS WITH A

STRONG PRESENCE IN UNDER-SERVED RURAL AND SEMI URBAN
MARKETS

Gold loans are the core products in our asset portfolio. We believe
that our experience, through our Promoters, has enabled us to have a
leading position in the Gold Loan business in India. Highlights of our
market leading position include the following:

We are the largest gold financing company in India in terms of loan

portfolio. Our loan portfolio as of March 31, 2010 comprised approximately
2.8 million loan accounts in India with Gold Loans outstanding of
Rs.73,417.3 million.
 We have the largest branch network among gold loan NBFCs. As of
March 31, 2010, we operated 1,605 branches across 20 states and two
union territories in India, and in the month of August 2010, we served an
average of 53,989 customers daily. Our branch network has expanded
significantly in recent years from 373 branches as of March 31, 2005 to
1,921 branches as of August 31, 2010, comprising 335 branches in
northern India, 1,322 branches in southern India, 197 branches in western
India and 67 branches in eastern India.

We believe that due to our early entry we have built a recognizable

brand in the rural and semi-urban markets of India, particularly in the
southern Indian states of Tamil Nadu, Kerala, Andhra Pradesh and
Karnataka. As of March 31, 2010, the southern Indian states of Tamil Nadu,
Kerala, Andhra Pradesh and Karnataka constituted 75.38% of our total
Gold Loan portfolio.

We have a strong presence in under-served rural and semi-urban

markets. A large portion of the rural population has limited access to credit
either because of their inability to meet the eligibility requirements of
banks and financial institutions because credit is not available in a timely
manner, or at all. We have positioned ourselves to provide loans targeted at
this market.

We offer products with varying loan amounts, advance rates (per

gram of gold) and interest rates. The principal loan amounts we disburse
usually range from Rs.2,000.0 to Rs.100,000.0 while interest rates on our
Gold Loans range between 12.00% to 30.00% per annum.
2.2.1.1 Muthoot Organisational Structure
fig. 2.1
 CHAPTER -4

PRODUCT PROFILE
 CHAPTER -4

PRODUCT PROFILE

INTRODUCTION

The year 1939 saw the emergence of the present day corporate
giant- “The Muthoot Group”. It embarked on its unending mission of
providing excellent services to its customers by establishing its first unit in
Kozhencherry.

The clear-cut vision and ideals of our founder patron late Shri. Ninan
Mathai Muthoot and Founder chairman late Shri. M George Muthoot has
made the Muthoot Group the Largest financial Group of its kind in India.

Undoubtedly the mission is to win the confidence of the customer

through unmatched, prompt and personalized service.

ADMINISTRATIVE SET UP OF MUTHOOT GROUP

The Registered Office of the group is situated at kozhenchenrry In

kerala. The Corporate Office (South) is in Kochi, Kerala and the Corporate
Office: (North) is situated at Lajpat Nagar New Delhi.
 THE GROUP HAS FORTY FOUR REGIONAL OFFICE
Kerala Tamilnadu KARNATAKA ANDHRAPRADESH
Trivendrum north South tamilnadu Bangalore Hyderabad
North
Trivendrum south Sivagangai Bangalore Secunderabad
South
Kollam Trichy Hubli vijayawada
Kottarakkara Madurai Mangalore Kurnool
Kozhenchery Coimbatore Mysore Vishakapatanam
Ernakulam Chennai South Goa Thirupathi
Trichur Chennai north Rajamundry
Alleppey Pondichery
Idukki Salem
Calicut Theni
Thirunelveli
Thanjavur
KOLKATTA WESTBEGAL
KARNAL HARIYANA
MUMBAI MAHARASTRA
AHAMADABAD GUJRAT
DELHI DELHI
WEST DELHI DELHI
JAIPUR RAJASTHAN
VARIOUS DIVISIONS OF MUTHOOT GROUP

1. BANKING & FINANCE DIVISION (MFIN)

 Started in 1939
 ISO 9001-2000 Company
 Deals in Gold Bond (Deposits) , Gold Loan, & M Power Card

2. MUTHOOT PLANTATION DIVISION

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

3. EDUCATION DIVISION
 Since 1962
 St. George’s School, Alakananda, New Delhi
 St. George’s School, Defence colony, New Delhi
 MGM Muthoot Nursing School, Kozhencherry, Pathanamthitta
 Staff Training Colleges at Ernakulam & New Delhi

4. MUTHOOT HOSPITALITY & HOTEL DIVISION

Cardamom County
 Started in 1978 & Our Group purchased this project in 2000
 Just 1 Km from famous Periyar Tiger Reserve
 “All Spice” the multi-cuisine restaurant offers finest international
dishes
 “Ayura’-Ayurvedic center helps you for natural therapy.
  Green Leaf certificate from Dept. of Tourism Government of Kerala
 Company certified with 4 star classification and First ISO 9001-2000
Resort in Kerala.

Muthoot Pampa Villa

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

Muthoot Back Water Cruises

 Fleet of House boats at Alleppey

5. HEALTH CARE DIVISION

 Since 1988
 Mar Gregorios Memorial Muthoot Medical centre, Kozhenchery with
ISO 9001 2000 Certification
 Mar Gregorios Memorial Muthoot Medical centre, Pathanamthitta
 Muthoot MRI Scan & Research Centre.

6. MUTHOOT VEHICLE & ASSET FINANCE DIVISION

 Since 1992
 Kerala’s largest I-lire Purchase & Leasing Finance Company
 Over Drive Car Loan Facility provides loans with lowest rates with
easy and flexible repayment.
 Loan also given to used Vehicles

7. MUTHOOT BUILDERS

Head quarters at Trivandrum.

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

8. MUTHOOT SYSTEMS AND TECHNOLOGIES PVT LTD. (EMSYNE)

IT Division of the Muthoot Group

 Since 1993
 Strong focus on custom application development
 Developing custom application ranging from medium to large-scale

9. MONEY TRANSFER DIVISION.

 Started in200l
 Facilities include (Inward Remittance)

1) Trans Cash
2) Xpress Money
3) First Remit
4) Instant Cash
5) Money Gram

Outward Remittance
1) Wiremoney

10. MUTHOOT WEALTH MANAGEMENT SERVICES PVT. LTD.

 Life Insurance
 Mutual Funds
 General Insurance
11. MUTHOOT FOREIGN EXCHANGE DIVISION

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

12. MUTHOOT PRECIOUS METALS CORPORATION

 Sale of 999.99 Pure Gold coin imported from Switzerland.

 Easy to buy and store

13. POWER GENERATION

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

14. MEDIA

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

15. MUTHOOT TRAVEL SMART

Helps the customers to book their national as well as international

flight tickets. It also helps people to have passport and visa, and also to
book train tickets.

16. A. MUTHOOT SECURITIES LTD.

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

(B) MUTHOOT COMMODITIES LTD.

Latest venture from the Muthoot Group, being a member of MCX,

NCDEX and NMCE Muthoot Commodities provides a platform for
commodity future trading.

USP - GOLD LOAN

 High per gram rate offered

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

Super Bullet Points

 We provide instant cash loan in 5 minutes
 loan for any amount available any time, any where for any purpose.
  Simple hassle free loan with least documentation.
 unmatched safety of security of Gold pledged.
 Flexible payment option on easy installments.
1. USP - GOLD BOND

We mobilize resource, not through fixed deposits as in Banks, but

through Debenture called Gold-Bonds which are fully — secure,
redeemable and non-convertible instrument

1. The resources mobilized are given out as gold Loans to customers. This
investors money is guaranteed by 120% of gold kept in our strong rooms.

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

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

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

shares and insurance do not have this facility.

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

like shares etc.

5. Interest can be availed monthly or annually.

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

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

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

8. Also you can avail interest from any branch

9. Customer can avail a loan up to 90% the Bond amount, through any of
our branches.
10. You can suggest a nominee for your investment.

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

Super Bullet Points

1. For every 100 crs. of investment in Bonds, we have 140 crores of gold
with us.

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

available at anytime

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

nationalized /schedule banks.

4. We have an unblemished track record 01124 years. Wide network of

over 2500 branches across the country facilities customers to withdraw the
amount of Bonds/Interest from any part of the country.

5. We have never defaulted or delayed over a single interest payment, not

to mention principal

2. USP - MUTHOOT TRAVEL SMART

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

4. USP - PRECIOUS METAL CORPORATION

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

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

6. USP Money Transfer

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

7. USP- M.Power Card

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

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

ANALYSIS OF FINANCIAL STAEMENT

 CHAPTER -5
RESEARCH METHODOLOGY
 CHAPTER -5

RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY

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

SCOPE OF THE STUDY

The scope of the study is to identify and analyze the factors which
make the gold loan provided by Muthoot Finance Limited the best and
most sought after. The reason behind the huge success of this facility is
unlimited. This study intends to:
1. To know the present market share of Muthoot Finance Limited.
2. Indentify the factors responsible for the high customer satisfaction.
3. To evaluate the social security and empowerment process of the
company.
4. To evaluate the suggestions of the customers which is necessary for
the further development of the organization.
LIMITATIONS
 Time allowed for the study was not sufficient.
 A sample survey was selected.
 The data provided by the respondent may not be correct or accurate.
 Some of the samples selected for the study did not respond properly to
the questionnaire. However proper care had taken to make the analysis
and interpretations more meaningful.
 Questionnaires are impersonal, this means that it may be difficult to
understand answers and thus to act on them. Also, there is a chance that
the question may be misinterpreted, rendering the answer useless.
 Questionnaires also invite people to lie and answer the questions very
vaguely which they would not do in an interview.
 Open questions can take a lot of time to collect and analyze.
 People are not always willing to fill questionnaires in so they may just
throw them always.
 Sometimes questions used are too standardized (closed) so some
peoples preferred answers may not be included, and this also does not
allow for much detail.
 Peer pressure of embarrassment may cause people to not want to
answer certain questions, or they may want to impress the researcher
and fabricate the truth by filling in untrue answers, making
questionnaires unreliable and sometimes invalid.

RESEARCH PLAN

In this chapter, explains the structural frame work .The research

methodology considered as a blue print of the study. It determines the
strengths, reliability and accuracy of the project. Methodology can be said
as the methods used by researchers in selecting samples, sample size, data
collection and various tools in data collection.

PRELIMINARY INVESTIGATION

Preliminary investigation involves the following:

 Direct visit to the company.
 Discussions with the branch manager.
 Analysed about the scope and viability of the existing facilities.
 Secondary data were used to get an overview about the two
companies.

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

RESEARCH DESIGN

“A research design is the plan, structure and strategy of investigation

conceived so as to obtain answers to research questions and to control
variance” by F.N. Kerlinger (1959)

PHASES OF RESEARCH DESIGN

 Sample design
Sample design deals with the method of selecting items to be observed
for the given study.
 Observational design
Observational design relate to the conditions under which the
observations are to be made while conducting research studies.

 Statistical design
These design concern with the quantitative and statistical aspects of the
design such as technique of study, the methods of model building etc.

COLLECTION OF DATA

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

PRIMARY DATA

The data collected directly by the investigator are called primary

data. They are original and give first hand information. It can be collected
by different methods viz. direct personal investigation, indirect oral
investigation etc. Primary data were collected through
- Questionnaire
- Personal interview
- Survey method
- Observation
- Expert opinion

 Questionnaire
 The primary data was collected mainly by using a questionnaire. In
study, structured questionnaire consisting of a list of questions pertaining
to the dichotomous questions, multiple choice questions and questions for
recommendations and suggestions. This facilitates the respondents to fill
up the questionnaire is an easy and fast manner.
The questions are divided in two following sections:-
 Personal details
 Inquiry details

 Personal Interview
The personal interview was taken from half of the respondents. This
was mainly to elicit information that was left out in the questionnaire
opinions and suggestions were asked for the betterment of the project.

 Survey method
Survey is the most commonly used method of primary data
collection in marketing research. This is widely used because it’s extreme
flexibility. Survey research is a systematic gathering of data from
respondents through questionnaire. Survey technique used in the study is
personal interview. The advantages of this method are:
 It requires relatively shorter period of time to complete
 Researcher can procure many different types of information
 The amount of information produced on each aspect is larger.
 There is a possibility of more accurate reply

SECONDARY DATA
The collected by the investigator from the data already collected by
others for some other purpose are called secondary data. Thus secondary
data are refined data from primary data. It is also called second hand data
because data is collected from previous reports about the organization
from the internal books, magazines and World Wide Web. Secondary data
are collected through
- Annual reports
- Websites
- Journals and magazines
 CHAPTER - 6

DATA ANALYSIS & INTERPRETATION

 CHAPTER - 6
DATA ANALYSIS & INTERPRETATION

TABLE-1 SHOWING THE CLASSIFICATION OF RESPONDENTS ON THE

BASIS OF THEIR INCOME GROUP

INCOME (RS.) NO. OF RESPONDENTS PERCENTAGE

Below 2000 15 30
2000-4500 13 26

4500-6000 12 24
6000 and above 10 20

TOTAL 50 100
interpretation

Chart showing classification of respondents on their monthly

income. out of 50 respondents among the 15 respondents were having a
monthly income of less than 2000 while 13 of them earned between 2000-
4500, and 12 of respondents have a monthly income between 4500-6000
and 12 of them earned above 6000.
TABLE-2 SHOWING THE CLASSIFICATION OF RESPONDENTS ON THE
BASIS OF AGE GROUP

AGE GROUP (IN NO. OF PERCENTAGE

YEARS) RESPONDENTS
30-35 23 46
35-40 18 36
40-45 5 10
45-50 4 08
TOTAL 50 100
Interpretation:
Chart showing the classification of respondents according to their
age group 23 of the respondents among the 50 respondents have age group
of less than 30-35, while 18 of then age group of between 35-40, 05 of the
respondents have the age group between 40-45, 4 of the respondents are in
the age group of 45-50.

TABLE-3 SHOWING THE CLASSIFICATION OF RESPONDENTS ON THE

BASIS OF OCCUPATION
 OCCUPATION NO. OF RESPONDENTS percentage

Govt. employee 10 20

Businessmen 20 40

Agriculturist 7 14

Professional 13 26

TOTAL 50 100

interpretation

Chart showing the classification according to their occupation out of

50 respondents, 10 of respondents are Govt. employee, 20 of respondents
are businessmen, 07 of respondents are agriculturist, and 13 of
respondents are professionals.
4. TABLE SHOWING THE HOW OFTEN DO YOU TAKE A GOLD LOAN IN A
YEAR

Opinion No Of Respondent percentage

Once 28 56
2-5 times 22 44
6-10 times 0 0
More than 10 times 0 0
total 50 100
Interpretation
The above chart shows that the out of 50, the opinion of the 28
respondents suggest that 56% of Muthoot’s customers applies for a gold
loan just once, while the rest of the 44% applies for a gold loan 2-5 times.
5. THE TABLE SHOWS THAT THE CUSTOMERS OPINION REGARDING
THE RATE OF INTEREST CHARGEABLE BY THE MUTHOOT FINANCE

Opinion No of respondents Percentage

Excellent 22 44
Very good 12 24
Good 10 20
Fair 06 12
Bad 0 0
Total 50 100

Interpretation
The above chart was designed to understand the satisfaction of the
customers with the interest rate on gold loan offered by Muthoot finance.
Here, 44% of the customers believe that the interest offered by the
muthoot finance company is excellent. While 24% of customers of
Muthoot finance think that the rate of interest is very good.20% of the
respondents believe that the interest rate is good. 12% of the respondents
believe the interest rate is fair. None of the respondents thought that
interest rate offered by companies was bad.
6. TABLE SHOWS THAT THE MUTHOOT FINANCE STAFF BEHAVIOR
TOWARDS THE CUSTOMER REGARDING VARIOUS FINANCIAL
PRODUCTS

Opinion No of respondents percentage

Excellent 25 50
Very good 12 24
Good 10 20
Fair 03 06
Bad 0 0
Total 50 100

Interpretation

Staff behavior is interpreted in the above chart. About 50% of the

organizations thought that the behavior of staff is excellent. The share of
customers who choose very good as the option stands at 24% for Muthoot
finance.20% of respondents believe that staff behavior was good and 06%
of respondents believe that the fair respectively. None of the respondents to
the questionnaire believe that the behavior of staff was bad.
7. CUSTOMERS OPINION TOWARDS THE VARIOUS FINANCIAL LOAN
APPLICATION PROCEDURE OFFERED BY THE MUTHOOT FINANCE.
 Opinion No of respondents Percentage
Excellent 22 44
Very good 13 26
Good 10 20
Fair 05 10
Bad 0 0

Interpretation

The above chart was designed to interpret the response of

customers to Muthoot finance gold loan procedure .It was interpreted that
44% and 26% of Muthoot’s respondents believed that this factor was
excellent and very good respectively. As for option ‘Good’ and ‘Fair’ the
share stands at 20% and 10% Muthoot finance. None of the respondents to
the questionnaire believe that the Bad.
8. TIME TAKEN FOR THE VARIOUS AND WHOLE LOAN PROCEDURE OF
MUTHOOT FINANCE
 Opinion No of respondents Percentage
Less than 5 minutes 03 06
5- 10 minutes 07 14
11- 30 minutes 18 36
31- 60 minutes 22 44
Others (Please mention) 0 0
Total 50 100

Interpretation

The above diagrams represents one of the main factors which

decides the fate of any loan financing company i.e. time taken for clearing a
loan. 06% of respondents believed that it takes less than 5 minutes for the
whole loan procedure.
respondents who thinks the whole loan procedure takes 5- 10
minutes stands at 14%. the option ’11-30 minutes’ was selected by 36%.
The option 31-60 minutes was selected by 44% respectively. None of the
respondents believe that the whole loan procedure takes more than 1 hour.
9. HOW SATISFIED ARE YOU WITH THE SECURITY STANDARDS OF
MUTHOOT FINANCE LIMITED
 Opinion No of respondents percentage
100% 5 10
80- 99% 06 12
60- 79% 18 36
40- 59% 15 30
>40% 06 12
Total 50 100

Interpretation
It is interpreted that 10% of respondents are 100% satisfied with their
security standards. It is also interpreted that 12% of respondents satisfied
with the security facilities. 18 respondents trusted Muthoot security
standards is 60% - 79% respectively. The institutes had 30% of the
respondents who believed that the security standard was 40% - 59%
trustable the institutes had 12% of the respondents who believed that the
security standard was greater than 40% trustable.
10. TABLE SHOWING THAT HOW THE CUSTOMER WILL COME TO
KNOW ABOUT MUTHOOT FINANCE FACILITIES
 Opinion No of respondents Percentage
Newspapers 08 16
Journals and Magazines 06 12
T.V Advertisements 24 48
Notice 2 04
Friends and relatives 10 20
Others (Please specify) 0 0
Total 50 100

Interpretation
The diagram shows the mediums through which the customer came
to know about Muthoot Finance Limited, Here it is interpreted that
newspaper as a medium penetrates about 16% for Muthoot finance. The
main medium of advertising for the company is T.V. advertisements which
stand at 48% for Muthoot finance. Other sources like journals and
magazines- Muthoot finance is 12%. notice is 04%, friends and relatives is
20% is also play vital roles in penetrating the market share of the
company.
 11. TABLE SHOWS THAT THE CUSTOMER RESPONSES TAKING INTO
CONSIDERATION THE RECENT FLUCTUATIONS OF VARIOUS FINANCIAL
SERVICES OF MUTHOOT FINANCE ARE SUCCESSFUL IN PROVIDING
EFFECTIVE LOANS

Opinion No of respondents percentage

Strongly agree 10 20
Agree 30 60
Neutral 08 16
Disagree 02 04
Strongly disagree 0 0

Interpretation
It is interpreted from the above diagrams that a majority of the 60%
respondents of Muthoot Finance agrees to the fact that the company are
able to provide effective loans even after the recent fluctuations in rates.
Those respondents who strongly agree to this fact constitute 20% and 16%
opted for neutral while rest 04% disagreed to this fact.
12. TABLE SHOWS THAT IN CASE OF DEFAULT, DOES MUTHOOT
FINANCE ASSIST BY PROVIDING LONG PAYBACK PERIOD
 Opinion No of respondents Percentage
Strongly agree 12 24
Agree 28 56
Neutral 10 20
Disagree 0 0
Strongly disagree 0 0

Interpretation

Here, it is interpreted a majority of the respondents agrees that

financial institutions assist by providing long payback period. This was
closely followed by the opinion that the respondents strongly agrees that
56% financial institutions assist by providing long payback period.
Followed by neutral with 20% and strongly agree is 24%.
 CHAPTER – 7

FINDINGS, SUGGESTION

&

CONCLUSION
 CHAPTER – 6

FINDINGS, SUGGESTION & CONLUSION

FINDINDS

The major finding of the study can be summarized as follows:

 The management and employees of both the companies maintains a
good relationship.

 Most of the respondents (58.33%) have monthly income range

between Rs.5000 – Rs 10,000.

 Media advertisement has an important role in spreading popularity

Incase of Muthoot Finance.
 Majority of the respondents’ have the opinion that the behaviors of
company’s staff are cordial and friendly.

 Majority of the customers were satisfied with the services, hence

there was no need of complaints to be lodged.

 NBFCs score over banks on two fronts despite charging higher

interest - quick approval and disbursal of loans, and less
documentation. An NBFC at the most takes 30 minutes to give the
loan after verifying the gold, and the only document required is an
identification proof of the person pledging the gold.

 It was also found that customers of the companies are more than
satisfied with the security standards on their gold jewellary.
 It was indentified from the customer response that the companies
are successful in proving effective gold loans even after the recent
fluctuations in the prices of gold.

The study was also aimed at finding best gold loan financing company.
After analyzing and interpreting the data collected through primary and
secondary sources, the following conclusions were made:

 The estimated gold loan portfolio of Muthoot Finance Limited (7,342

Crores) is far superior and leasing Limited (2,560 Crores) which
indicate the sound market position of Muthoot Finance Private
Limited.

 It was also interpreted that Muthoot Finance Limited has more

regular customers.

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

 Another important finding was presence of Muthoot throughout the

country as well as aboard.

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

 It was also interpreted that Muthoot Finance was successful in

providing long pay back periods to its customers. This is also an
another reason for its success in this industry.

SUGGESTIONS

FOR MUTHOOT FINANCE

 Muthoot should work on its marketing strategies to improve its
market share.

 Most of the people are unaware of the different financial products

offered by Muthoot. So the company should take necessary steps to
create awareness among the public.

 The company can also give attractive offers to old customers as well
as prospective new customers.

 The company can also look into new ventures as it has established
itself as the leader in gold loan financing field.

 Muthoot should also speed up its process in offering IPO.

CONCLUSION

It helped me to find out the different factors responsible for the

success of the muthoot finance companies.

The major finding that can be concluded from this study is that
Muthoot Finance Limited is still the best gold financing company in India.
This experience has helped me gain knowledge about the business of gold
loan financing in India.
QUESTIONNAIRE
&
BIBLIOGRAPHY
 GOLD LOAN MARKET SURVEY QUESTIONNAIRE
FOR MUTHOOT FINANCE

1. Name of the customer:

2. Age:

3. Occupation:

4. Sex: Male Female

5. Monthly salary:

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

a) Once
b) 2- 5 times
c) 6- 10 times
d) More than 10 times

7. As per the scale below, rate the following factors of Muthoot Finance
Limited:

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

I. Rate of interest :
II. Location of the institute :
III. Staff behavior :
IV. Gold loan application procedure:
V. Infrastructure facilities :
8. Time taken for the whole gold loan procedure?

a) Less than 5 minutes

b) 5- 10 minutes
c) 11- 30 minutes
d) 31- 60 minutes
e) Other (Please mention) ________________

9. How satisfied are you with the security standards of Muthoot

Finance Limited?

a) 100%
b) 80-99%
c) 60-79%
d) 40-59%
e) >40%

10.How did you come to know about Muthoot Finance Limited and its
facilities?

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

11.Taking into consideration, the recent fluctuations of gold rates. Do

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

12.In case of default, Does Muthoot Finance assists by providing long

payback period?
 13.Why do you prefer Muthoot Finance Limited over other Gold loan
institutes and Government organisations?
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________

14.Any complaints about Muthoot Finance Limited?

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________

15. Any suggestions to improve the services offered by Muthoot Finance

Limited?
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________

Date:

Signature:
 BIBLIOGRAPHY

BOOKS

 Philip Kotler, “Marketing Management” ”, Prentice- Hall of India, New

Delhi, 8th Edition, August 1994

JOURNALS

 17th Annual Report of Manappuram General Finance and Leasing

Limited

 Draft Red Herring Prospectus of Muthoot Finance Limited issued on

30th September 2010

WEBSITES

 http://www.muthootfinance.com/

 http://www.thehindubusinessline.in/2010/11/27/stories/2010112
751420600.htms

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