b) Relationship between the Hypotheses and the Conclusions

Chapter 10 Findings and Conclusions 10.1 Introduction 10.2 Findings of the study a) General Findings b) Specific Findings c) Objective-wise Findings 10.3 Conclusions of the study a) General Conclusion b) Relationship between the Hypotheses and the Conclusions

10 1 Introduction After data analysis and interpretation, the next step is to write conclusions and findings The research conclusions and findings should be consistent and factual Conclusions are generalizations drawn from the research study The purpose of research is to make known the findings to others This chapter presents the conclusions and the findings developed on the basis of data gathered, statistically analysed and interpreted in detail in the previous chapters This chapter is categorized into general Finding and conclusions, specific conclusions, the relationship between the hypotheses and the conclusions The chapter begins with General findings, Specific findings and Objectivewise findings 10 2 Finding of the study The findings are statements of factual information, based upon the data analysis 174 On the basis of the data analysed and interpreted the findings are as follows The researcher has presented finding as General Finding and specific finding a) General Findings b) Specific Findings c) Objective wise Findings 10 2 a Findings 1 Purpose of Loan The purpose of the Loan was studied to analyse the scope for Gold and Personal Loan To study the purpose, the question was included in the questionnaire that whether the Loan is for PERSONAL, ACQUIRE PROPERTY, and MEDICAL URGENCY OR OTHERS On the bases of data collected, it had been analysed that the borrowers mainly require a Loan for personal urgency That means immediate liquidity required. 174 Malhotra Narendra, 2011. Marketing Research, op sit p 12 285

Therefore, there is high scope for Personal Loan as well as Gold Loan which are immediate Loan options for some borrowers 2 Comparison of Rate of Interest The study on analyzing the Rate of Interest on existing Loan existing Loan includes Gold Loan or Personal Loan or other Loans of the respondents From the finding, it can be inferred that other types of Loan Home Loan, Car Loan, and Education Loan are towards the higher side The researcher scaled the Rate of Interest paid on existing Loan as follows Less than 7 percent, between 7 percent -8percent, between 8 percent, -9 percent, between 9percent -10 percent, between 10percent -11 percent, less that 11 percent Especially from an Organised Loan Lender the Rate of Interest is reasonable than the Unorganised Loan provides for Gold Loan as well as Personal Loan So the Gold Loan option has become popular and effort able for many borrowers from the Organised Loan Lender The Reason - Low Rate of Interest can become a major factor for the growth of Organised Loan Lender with the Gold Loan as acceptable options 3. Rate of Interest is the higher side of the Unorganised Loan Lender as compare to Organised Loan Lender It was observed that the Rate of Interest paid by a borrower for the Loan taken from the Unorganised Loan Lender is on the higher side as compared to Organised Loan Lender Therefore, the Organised Loan Lender has scope for its Loan segment, if the borrower finds the Rate of Interest charged by them is low as compared to Unorganised Loan Lenders 286

4. The Unorganised Loan Lender is easy and simple It was observed that out of 739 sampling, 25 percent agrees to take a Loan from an Unorganised Loan Lender Due to its easy and hassle free procedure either for Gold Loan or for Personal Loan At the same time, the respondents also accepted that the Loan to value is higher, Easy procedures, minimum documentation, which proved to take a Loan from Unorganised Loan Lenders i e either from Pawn brokers or dealers Reason It is traditionally dominated lenders with no paperwork involved, no guarantee, no reliability 5. As the above stated that the 25 percent of the respondents agrees that Unorganised Loan Lender s procedure to give Loan is easy and simple The core reason for some respondents to accept it because of the compulsory CIBIL scores for Personal Loan, Personal Loan is an option for the borrowers who have nothing to pledge, but due to strict CIBIL score, many opt to take it from the Unorganised Loan Lender 6. It has been observed that Age between 25-35 respondents that is 73 respondents have an existing Personal Loan and 88 respondents have other Loans In the Age between 35-45 again the Personal Loan holders are133 and other Loan holders are 180, Age between 45-55 the 44 respondents have existing Personal Loan and 80 respondent s other Loans Age 55 and above 30 respondents have taken other Loan the other Loan includes Home Loan, Car Loan, Education Loan and others This is Existing Loan Holders data corresponding to their Age But at the same time the Age in the range of 35-45 the existing Gold Loan holder is 50 is higher as compare to the other Age range i.e. 25-35, 35-45 Therefore, there is scope for the Organised Loan Lender to work with those Age groups And propagate the Gold Loan accordingly 287

7. It has been also observed that the Age above 55 is 47 percent of the available respondents That is 133 respondents for existing Personal Loan, 50 respondents for the existing Gold Loan and 180 for others This Age borrower can be more prospective for any Loans This Age group is a decision maker and also at the same time may require additional financial assistance for some or the other purpose 8. From the study on the correlation between Age and their Monthly Income The study indicates that the Age between 25-35 and 35-45 Monthly Income in the range above 75000 is high as compared to the Age 45-55 This indicates that the employment opportunities as well as the Income range are higher in the Age in the range of 25-45 Their take home Income is reasonable As the Age and the Income factors are importantly considered in Loan disbursement The study of correlation of Age and Monthly Income becomes a value study in this research This also indicates the further credit market 9. From the respondents, it was also observed that the Government employees are 523 i.e. 70 77 percent This indicates this Government employed respondents can be prospective borrowers with stable Income So if in case they require additional Loan with existing on the bases on their payback capacity they can be offered a Loan 10. On the basis of analysis, it was observed that 97.56 percent agrees that the Public NBFCs involve an easy procedure during Loan Process This indicates Gold Loan from Organised Loan Lenders involves an easy procedure as compared to Unorganised Loan Lenders 11. From the analysis the Minimum Documents required by Public NBFCs It shows that the responses are positive That is Yes 288

82.13 and No- 17.87 This indicates that the Organised Loan Lenders also require minimum documents to opt Gold Loan unlike unorganised So taking a Gold Loan from an Organised Loan Lender is also equally easy, simple benefited and quick 10 2 12 b Specific Findings Gold Saving Schemes The researchers wanted to highlight that Gold Loans have become a basis for creation of new financial products such as Loans for purchase of gold wherein gold is purchased on the date of the Loan and held as a pledge until the equated monthly installments are paid Gold saving schemes are also emerging wherein the customers pay regular cash flows which on maturity are added with a certain amount of interest payment to purchase gold for customers 13 CIBIL Score is compulsion, but its reporting should be also updated On the basis of the information, the researcher found out that there should be proper regulation on updating the Credit information report between CIBIL and Banks This is to avoid defaulter s credibility during the process of new Loan In other words, if in the previous case if the borrower is having credit a liability due to which his her CIBIL score was affected And now in the due course the borrower has corrected it by paying back But this may not have been reported and recorded by bank to the CIBIL as such the record maintained by the CIBIL is not updated which can be an obstacle in the process in new Loan to the borrower For example, in many cases the reporting of foreclosing, clearance of default is not being reported to CIBIL by bank There should be more organization coming up in this business Reason effecting the Organised Loan Lenders, business and encouraging unorganising Loan lenders 289

14 Banks may be encouraged to expand their gold jewellery Loan portfolio It was investigated from the information that there is great scope for expanding financial inclusion 175 in extending gold jewellery Loan 176 If banks continue to increase their gold jewellery Loans portfolio, the reliance of economically weaker sections of the society on money lenders and pawn brokers will come down considerably Banks may make the gold jewellery product more flexible and encourage people to avail this fully collateralized Loan for all types of productive purposes This greatly facilitates the monetization of huge stocks of gold in the country Given the superior quality of gold as collateral, the prudential norms like risk weights and provisioning on Gold Loans may be softer than other Loans 15. The Procedure for appeal and other incidental matters The researcher have highlighted that the Personal Loan rules and policies enumerate the procedure for appeal and other incidental matters When an aggrieved credit information company whose application for a certificate of registration has been rejected or whose certificate of registration has been cancelled, approaches the Appellate authority designated by the Central Government 16 Monetization of gold holding It was discovered that Monetization and Securitization of gold holdings will help bring down the necessity to import gold and help check volatility in its prices It will be beneficial for the economy as well as the owners of gold lying in the safes in thousands of homes to bring it into the country's investment mainstream 175 Swamy, Vighneswara 2010. Bank-based Financial Intermediation for Financial Inclusion and Inclusive Growth Published in Banks and Bank Systems, Vol 5, No 4 2010 pp 63-73 176 Retrieved from Economics Times, 22-2-2016, VP Nandakumar CEO Mannapuram General Finance and Leasing. 290

17 Short-term Deposit The researcher further collected information on Monetization of gold holding is that Banks can accept gold deposits for a short term 1-3 years as well as medium term 5-7 years and long 12-15 years term The short term deposits of gold will be accepted by banks on their own account, while the medium and long term deposits will be on behalf of Government RBI has said that banks would have to permit premature withdrawal subject to a minimum lock-in period and penalty that can vary from bank to bank Interest on deposits under the scheme will start accruing from the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold at the Collection and Purity Testing Centre This short term bank deposits will attract cash reserve ratio CRR and statutory liquidity ratio SLR At the same time, the stock of gold held by the banks will be factored in meeting the SLR requirement 18 Indian Institute of Banking and Finance IIBF providing certificate course for Agents It was also discovered that the Reserve Bank has requested the Indian Banks Association to formulate, in consultation with Indian Institute of Banking and Finance IIBF, a certificate course for Direct Recovery Agents with minimum 100 hours of training Once the above course is introduced by IIBF, banks should ensure that over a period of one year all their Recovery Agents undergo the above training and obtain the certificate from the above institute Further, the service lenders engaged by banks should also employ only such personnel who have undergone the above training and obtained the certificate from the IIBF Keeping in view the fact that a large number of Agents throughout the country may have to be trained, other institutes bank s own training colleges may provide the training to the recovery Agents by having a tie-up arrangement with Indian 291

Institute of Banking and Finance so that here is uniformity in the standards of training However, every Agent will have to pass the examination conducted by IIBF all over India 19 Direct Recovery Agent The researcher had found out that the Banks have incorporated a repossession clause in the contract with the borrower and rely on such repossession clause for enforcing their rights, they should ensure that the repossession clause is legally valid, complies with the provisions of the Indian Contract Act in letter and spirit, and ensure that such repossession clause is clearly brought to the notice of the borrower at the time of execution of the contract The terms and conditions of the contract should be strictly in terms of the Recovery Policy and should contain provisions regarding a notice period before taking possession b circumstances under which the notice period can be waived c the procedure for taking possession of the security d a provision regarding final chance to be given to the borrower for repayment of Loan before the sale auction of the property e the procedure for giving repossession to the borrower and f the procedure for sale auction of the property 20 Correlation of Experience with the Perception element On the basis of analysis, the researcher has pointed out that due to the attractive services of NBFCs and banks in both Gold Loan and Personal Loan the Perception towards Gold Loan and Personal Loan has changed As most of the Indian families kept last option to pledge their gold jewellery, either to jewellers or to the pawn brokers to avail Gold Loan because traditionally these were only two players in Gold Loan market But due to the best experience of Banks and NBFCs, which is considered to be hassle free and systematically organised, this experience has changed the Perception Reason- Traditionally opting a Loan is like you will be in 292

debt as well as obligation of Pawnbroker, jeweller which affected the psychological and social status) 21 Competition between NBFCs and Banks has open options for the borrower s Personal Loan as well as Gold Loans It has been also observed that there is cut throat competition between NBFCs and Banks To compete with NBFCs, banks have recently improved streamlined their Loan processes with some banks have installed purchasing assaying machines to disburse Loans in 15 minutes This poses a challenge to the growing dominance of NBFCs in the Gold Loan market, more so since banks usually charge lower rates of interest compared with NBFCs Gold Loans are among the newest class of retail assets to the banks and NBFCs which have shown rapid growth in securitization of gold. The retail asset includes all borrower relationships with small businesses and therefore retail asset also includes Gold Loan. 22 Increase in cost of Personal Loan borrowings With frequent hikes in interest rates by the RBI and the subsequent hike in rates by banks, the cost of Personal Loan borrowing is increasing This will lead to an increase b willingness to secure Gold Loans 23 Higher default rate in regard to Personal Loans It was discovered that the continued high credit growth in the Personal Loans, and Loans and advances qualifying as capital market exposure and a higher default rate in regard to Personal Loans is a matter of concern to Reserve Bank It has, therefore, been decided to increase the provisioning requirement in respect of the standard assets in the following categories of Loans and advances from the present level of one per cent to two per cent with immediate effect 293

24 Standard Asset Rate of Provision It was investigated from the information that to ensure continued and adequate availability of credit to highly productive sectors of the economy, the provisioning requirement for all other Loans and advances, which are standard assets, including those to agriculture, SMEs and industry in general shall remain unchanged The standard asset provisioning requirements for categories of banks, after the above changes, are summarized below As hitherto, these provisions would be eligible for inclusion in Tier II capital for capital adequacy purposes to the permitted extent Sr No Category of standard asset Rate of provisioning a Direct advances to agricultural and SME sectors b Personal Loans, Loans and advances qualifying as capital market exposures, Commercial real estate Loans and Loans and advances to systemically important NBFCs-ND 0 25 2 00 c All other Loans and advances not included in a and b 0 40 above It has also been decided to increase the provisioning requirement for Loans and advances in the standard assets category to Non-Deposit Taking Systemically Important Non-Banking Finance Companies NBFC- ND -SI from 0 40 per cent at present to two per cent with immediate effect In terms of paragraph 16 A i of our circular DNBS PD CC No 86 03 02 089 2006-07 dated December 12, 2006, a Non-Deposit Taking NBFC with an asset size of Rs 100 crore or more as per the last audited balance sheet is considered as a NBFC-ND-SI It has also been decided to increase the risk weight for all exposures to NBFC-ND-SI to 125 from the present level of 100 with immediate effect 294

10 2 c Objective- wise Findings The researcher has drawn certain conclusion finding according to the objectives of the study and it is represented as follows Table No. 10.2(c) Objective wise Findings Sr No Objectives of the Study Finding Conclusions 1 To make comparative analysis of Unorganised and Organised Gold Loan market and Personal Loan market The Gold Loan and Personal Loan have been provided by both Organised as well as Unorganised Loan Lender Previously it was dominated by Unorganised Loan Lender The market scenario has changed with increase in demand of seeking Loans from Organised Loan by the borrower The Organised Financial Institutions are entering in this product line Organised lenders have started offering comprehensive range of Loans to borrowers Sr No Objectives of the Study 2 To examine how consumer characteristics influence buying behavior towards Gold Loan and Personal Loan Finding Conclusions Consumer characteristic refer to various factors that influence buying behavior The consumer characteristics such as Age, Income, Gender, Education and occupation influences buying behavior towards Gold Loan and Personal Loan in Mumbai metro region The Researcher has made an effort to find out the scope of these factors influencing the behavior The Researcher has studied only Age, Income, Education and Occupation as 295

dependent variables These independent variables were studied to analyse whether the Age, Income, Education and Occupation influence the Preference of Gold Loan or Personal Loan between Organised and Unorganised Loan Lenders. Sr No Objectives of the Study 3 To study the market reality of Gold Loan over Personal Loan Finding Conclusions Here market reality means facts and figures of the financial institutes and banks that provide Gold Loans and Personal Loans The researcher had used Delphi Techniques to get expert information on reality of market in Gold Loan and Personal Loan 4 To study the Preference of consumer Borrowers towards Gold Loan and Personal Loan from Organised or Unorganised Loan Lenders One of the main objectives of the study was analyzed the Preference of consumer Borrower between Gold Loan and Personal Loan from Organized or Unorganised Loan Lenders The researcher has discussed parameters such as Process, Procedures i e documentation, Tenure, Easy Accessibility, Transparency, No hassles in procedures etc The Preference Scale has been used to measure the Preference of consumer Borrower between Gold Loan and Personal Loan through structured questionnaire 296

Sr No Objectives of the Study 5 To analyse the Perception of consumers borrowers decision-making regarding Gold Loan or Personal Loan from Organised or Unorganised Loan Lenders Finding Conclusions This objective was to analysed the point at which consumer Borrower take decision regarding Gold Loan or Personal Loan It mainly depends upon the consumer s payback capacity of any Loan available Common parameters were designed for both Gold Loan and Personal Loan to assess the decision making process at the point of purchase POP The Loan Perception Scale used to measure the Perception The Perception Scale comprises of Experience Poor, Moderate, and High) Expectation High, moderate, low. 25 Sources of Loan Preference among Organised or Unorganised Loan Lenders From the analysis of primary data, it was analysed that out of 739 respondents 251 prefers Public Banks for any of the Loan Gold Loan or Personal Loan or others and 292 respondents from NBFCs Public banks and NBFCs are Organised Loan Lender Remaining 181 respondents prefers from Unorganised Loan Lender The observations show that Personal Loan from the Public banks and the Gold Loan is preferred from NBFC depending upon Age wise distribution Here Organised Loan Lender s entry in both Personal Loan and Gold Loan segment has already proved progressive Reason- Security and Credibility of Organised Loan Lenders 297

26 Education, Age, Income, Occupations plays major role in selection of Loan Lenders It is observed that out of 739 sampling 55 percent of the borrowers for Gold Loan, their Education, Age and Income plays major role in decision making And other 45 percent the factors like Age, Education, Income does get influenced for Personal Loan Now the borrowers have the open options But the factors show that the Government employed or permanent job borrowers who is graduate or post graduates or professions with above Age like 35-55 mainly prefer Loans from Organised Loan Lenders But below graduation or SSC passed with private service, own business mainly prefers Loan from Unorganised Loan Lenders, they might be any Age There is scope for the Organised Loan Lenders to get this range of respondents for their Loan segment is high 27. Lastly, but equally important in regards to Unorganised Loan Lenders which includes Pawn Broker, Money Lenders, Jewellers, Chitfunds needed attention for organizing their business in loan offers. This Loan offering business is traditionally dominated by the Unorganised loan lenders. Thus they had dominated in the Rate of Interest, Loan to value, tenure. It depended on Lender to Lender, there is no organized set-up. Thus may borrowers had fallen in the debt trap, as such many a times borrowers were also hesitant to take up the loan. But the entry of the organized lenders one can conclude that many borrowers are coming forward to take up the Credit facilities offered. Rather borrowers have various options of lenders. 298

10 3 Conclusions of the Study The researcher has presented the conclusion of the study in general and relation between conclusion and hypotheses The researcher has arrived at general conclusions from the study of secondary data through discussions with various executives and other experts in the Financial Institution At the same time has also made use of primary data through survey for drawing conclusions The researcher categorized the conclusion in general conclusion and also presented relationship between conclusion and hypotheses of the study a. General Conclusion of the study b. Relationship between Conclusion and Hypotheses of the study 10 3 a General Conclusion of the study The general conclusions are stated as follows One of the Bankers said that it is necessary for every citizen to use banks for their business transaction So at the time of financial requirement, borrowers need not fall in the debt trap of Unorganised Loan Lenders Many business standard people avoid using banking services Some only service oriented people use banks because of their salary transaction. It becomes difficult to disburse Loan without KYC and CIBIL score Even though their pay back capacity is high It is necessary to keep CIBIL score clear and KYC record with bank Financial Institution 299

The Rate of Interest is in the range between Less than 7 percent, in the range between 7 percent -8 percent, between 8 percent -9 percent, between 9percent -10 percent, between 10percent -11 percent, less that 11 percent It has been observed that the Rate of Interest 10percent to 11 percent is 23.96 percent of the total, which is in the higher side as compared to the other interest rate On this basis one can conclude that the borrowers are comfortable with Interest rate in the range of 10-11 percent It has been observed that the range Current Loan Amount of the existing Loan is taken in the scale in less than 1,00,00 till above 30,00,000 Out of the total 739 respondents, the respondents have taken Loan above 30, 00,000 It may be home Loan Education Loan It can be concluded that there is good number of respondents who has existing Loan This is because in the market these Loans like home Loan, car Loan is available by the Organised as well as unorganised Thus the borrowers had taken this opportunity of availability of options in Loan On the bases of this one can be concluded that the existing Loan holder can be the prospective borrowers for the Gold Loan or Personal Loan The Perception of respondents was analysed through the parameter of Credibility for Personal Loan. It was observed that the Pawn broker Chit fund is in the scale of Poor i e 252 out of the total respondents Whereas the Credibility of the Public NBFCs is high as compared to Pawn broker Chit fund are 667 out of total respondents It can be concluded that the Credibility of Organized lender are high among the borrowers as compared to Unorganised while taking Gold Loan 300

10 3 b Relationship between the Hypotheses and the Conclusion Table 10 3 b Relationship between the Hypotheses and the Conclusions Sr No Hypotheses Conclusions 1 H 1 - Borrowers Prefer Gold Loan from Organised Loan Lenders The researcher had tested this hypothesis by using Chi-square technique and found out that Pearson Chi-square is 11 257, DF Degree of Freedom 9, Asymp Sig A asymptotic significance is 0 259 which is greater than 0 05 Preference of Gold Loan is one variable and Organised Loan Lender The Borrower s Preference of Gold Loan is dependent of Organised Loan Lenders Thus the respondents prefer Gold Loan from Organised Loan Lender 301

Sr No Hypotheses Conclusions 2 H 2 - Education, Age and occupation influence on the Preference of Personal Loan from Organised Loan Lenders The researcher had tested this hypothesis by using Chi-square technique and found out that Pearson Chi-square for variable Education - P value is 0 874 Which is > than 0 05 Age- P value is 1 00 Which is > than 0 05 Hence H0 is Accepted Occupation- P value is 3 88 which is > than 0 05 Therefore, the researcher concludes that from the respondents, Borrower s Preference for Personal Loan from Organised Loan Lender is independent of Education, Age and Occupation 302

Sr No Hypotheses Conclusions 3 Perception of the borrower of Gold Loan from Organised lender to Unorganised Loan Lender belonging to different Income group is same The Perception of the borrower of Gold Loan from Organised lender to Unorganised Loan Lender belonging to different Income groups had proved to be same Because the significance value of Experience is 713, Expectation is 279, Credibility is 709 The cross tab value with the factor Income is 666 The Co- Efficient Confidence level of p 5 There is no significant difference in the Perception of borrowers belonging to different Income groups on their Experience of getting Gold Loan from Unorganised to Organised Loan Lender There is no significant difference in the Perception of borrowers belonging to different Income groups on their Credibility of getting Gold Loan from Unorganised to Organised Loan Lender 4 Experience of consumers borrowers Organised Loan Lender is independent of their Education and Occupation Pearson Chi-square is 135, DF Degree of Freedom is 2, Asymp sig An asymptotic significance is 0 935, P value is greater than 0 05 The Experience of Borrowers with Organised Loan Lenders is independent of their Education and Occupation 303

Sr No Hypotheses Conclusions The above variable Education and Occupation does not influence the behavior of the borrowers; these are nonparametric studies The borrower of Gold Loan from Organised lender when comparing with Unorganised Loan Lender is same The Organised Loan Lender is Public NBFCs and Unorganised Loan Lender is Pawn Broker Chit fund Therefore, the researcher assumes that Perception of the consumers borrowers towards the Gold Loan from Organised or Unorganised in different parameters is same From the analysis, 81 respondents that are 10.96 percent respondents have higher satisfactory Experience from the Pawn broker chit fund which is considered to be the Unorganised lenders But if comparing the Pawn broker chit funds Experience with Public bank NBFCs, than Public/NBFCs is higher i.e. 368 respondents that is 49.79 percent. And ot satisfactory Experience from Pawn broker chit funds is again the same i.e. 411 respondents i.e 55.62 percent which is high as compared to the Public NBFCs Experience. On the basis of this analysis one can be concluded that the Experience of the respondents to take Personal Loan from Public NBFCs is high satisfactory as compared to Pawn broker chit funds 304

Conclusions Conclusions are inferences related to hypotheses The researcher had set three hypotheses to test. By using statistical techniques, the researcher tested the hypotheses and the related conclusions were arrived at Hence, the following Table shows the relationship between the hypotheses and the conclusions. This chapter has covered the findings and conclusions of the study. The suggestions on findings are recommended in the next chapter. 305