Description
The topic, “CREDIT APPRAISAL PROCESS OF MAHINDRA FINANCE” demanded an elaborate study of the presently followed credit appraisal process of Mahindra Finance, make suggestions regarding betterment of the whole system if any, and finally base all the above on solid research work.
A
Summer Internship Project Report
On
“Credit Appraisal Process of
Mahindra Finance”
Submitted By
Debi Prasad Patra
Regn. No. : 1201247159
Batch : 2012-2014
For the Partial Fulfillment of Post Graduate Diploma in Management, under
Regional College of Management (Autonomous), Approved by AICTE.
Under the Guidance of
External Guide Internal Guide
Mr. Kalyan Dash Prof. R. K. Mishra
Associate HR Asst. Professor
Mahindra Finance, Bhubaneswar Finance and Accounts, RCM(A)
REGIONAL COLLEGE OF MANAGEMENT (AUTONOMOUS)
Chakadola Vihar, Chandrasekhar Pur, Bhubaneswar – 751023, Odisha
Tel : +91 674 2301595 / 2300455, Fax : +91 674 2300421, Website : www.rcm.ac.in
I hereby declare that the Project Report entitled, “Credit Appraisal
Process of Mahindra Finance” is my original research based project
work, prepared for submission to Mahindra Finance, in completion of
the requirement of Summer Internship under the direct guidance and
supervision of both my Internal and External Guides, and the project has
not formed the basis for the award of any degree, diploma, associate
ship, fellowship or any other similar titles, to be submitted to any
University or Institution.
Debi Prasad Patra
Reg. No. 1201247159
PGDM : 2012-14
RCM (A)
Date :
Place :
This is to certify that Mr. Debi Prasad Patra, Reg. No. 1201247159,
student of PGDM (Full-Time), Regional College of Management
(Autonomous), Bhubaneswar has completed the Summer Internship
Project titled, “Credit Appraisal Process of Mahindra Finance” under
my supervision, in completion of the requirement of Summer Internship
at Mahindra Finance and Partial Fulfillment of his Post Graduate
Diploma in Management Course.
Prof. R. K. Mishra
Dept. of Accounts and Finance
RCM (A), Bhubaneswar
Date :
Place :
Page | 1
Table of Contents
Acknowledgement………………………………………………………………...03
Executive Summary……………………………………………………………….04
List of Illustrations………………………………………………………………...05
Chapter 1
1.1 Company Profile……………………………………………………….07
1.2 Objectives of the Study………………………………………………...10
1.3 Scope of the Study……………………………………………………...11
1.4 Methodology…………………………………………………………...12
1.5 Limitations of the Study………………………………………………..13
Chapter 2
2.1 Products? Profile………………………………………………………..15
2.2 Loan Products…………………………………………………………..20
2.3 Credit Appraisal Process……………………………………………….28
Chapter 3
3.1 Collection of Data……………………………………………………...44
3.1.1 Primary Data……………………………………………………….44
3.1.2 Secondary Data…………………………………………………….45
Page | 2
Chapter 4
4.1 Analysis of Data………………………………………………………..47
4.1.1 Primary Data Analysis……………………………………………..48
4.1.2 Secondary Data Analysis…………………………………………..68
4.2 Factor Analysis…………………………………………………………69
Chapter 5
5.1 Findings………………………………………………………………...72
Chapter 6
6.1 Suggestions……………………………………………………………..74
6.2 Conclusion……………………………………………………………...75
Annexure………………………………………………………………………….76
References………………………………………………………………………...81
Page | 3
Acknowledgement
I deem it a great pleasure and opportunity to dedicate the following few lines to
some persons, who enabled me to complete this Project in the stipulated time
period.
I express my obligations and gratitude towards Mahindra Finance, Bhubaneswar
and Prof. P.K. Pattjoshi, Dept. of Accounts and Finance, RCM (A), Bhubaneswar
for making the arrangements for this incredible Summer Internship Project in the
first Place.
I am really indebted to my Internal Guide, Prof. Rama Krishna Mishra,
Department of Accounts and Finance, RCM (A), my Project Mentor, Mr. Kalyan
Dash, Associate HR, Mahindra Finance, Bhubaneswar and Mr. Sk. Ziauddin,
Area Accountant, Mahindra Finance for their invaluable guidance, suggestions and
confidence in me.
Their contributions show in many suitable ways and were indeed instrumental in
achieving the final results. Last but not the least I am indebted to all those who
remained behind the scene but without their help this project would not have been
palpable.
Debi Prasad Patra
1201247159
PGDM: 2012-14
RCM (A), Bhubaneswar
Page | 4
Executive Summary
The topic, “CREDIT APPRAISAL PROCESS OF MAHINDRA FINANCE”
demanded an elaborate study of the presently followed credit appraisal process of
Mahindra Finance, make suggestions regarding betterment of the whole system if
any, and finally base all the above on solid research work.
I first tracked down the Credit Appraisal Process of Mahindra Finance.
I also took a sample size of 20 and asked them regarding the various factors
responsible for their perception towards a loan provider and suggestions for
improvement.
I tabulated all the data, analyzed them using IBM SPSS v20.0 and finally made the
interpretation of the observation.
At the end, I made some of my own suggestions.
Page | 5
List of Illustrations
1) Table 1: Timeline of Important Events of MMFSL………………………..08
2) Table 2: Complaint Redressal System……………………………………..34
3) Table 3: Factor Analysis- Total Variance Explained………………………69
4) Figure 1: Research Methodology…………………………………………..12
5) Figure 2: Protection Products………………………………………………15
6) Figure 3: Investment Products……………………………………………...16
Page | 6
Page | 7
1.1 Company Profile
Mahindra & Mahindra Financial Services Ltd. was incorporated on 1 January 1991
as Maxi Motors Financial Services Limited and received certificate of
commencement of business on 19 February 1991. Its name was changed to
Mahindra & Mahindra Financial Services Limited on 3 November 1992. MMFSL
is registered with the Reserve Bank of India as an NBFC.
Two decades ago, Mahindra and Mahindra Financial Services Limited (MMFSL)
commenced its journey in the rural non-banking finance industry. And with that
was born a vision to transform rural and semi-urban India into a self-reliant,
flourishing landscape. Since then, MMFSL have come a long way, empowering
millions of ambitious individuals with personalised finance for a wide range of
vehicles, home development requirements and many other diverse endeavours – all
to help them live their dreams and Rise in life.
At Mahindra Finance, they are guided by a firm belief in people, their dreams, and
their potential to achieve those dreams. Hence, their socially inclusive business
model facilitates loans to customers based not on their current financial status, but
their future earning capacity. This philosophy has instilled a sense of confidence in
the minds of rural and semi-urban India – a confidence that allows them to believe
that no dream is too big. Today, as one of the leading non-banking finance
companies, MMFSL is proud to have touched over 2 million such lives.
During the course of its journey, apart from emerging as the top tractor financer in
India, MMFSL has constantly strived towards developing skill sets of the local
Page | 8
population. Which is why, it provides employment to over 13,000 people at over
650 branches across India. This not only ensures equal growth opportunity for all,
but also enables MMFSL to serve its customers better through local understanding
and expertise.
So, be it a humble farmer or a budding entrepreneur – MMFSL is committed to
empower every individual with resources to help their dreams see the light of day.
The Timeline of Important events at MMFSL
Year Events
1993 Commenced financing of M&M UVs
1995 First branch opened outside Mumbai, at Jaipur
1996
Commenced financing M&M dealers for purchase of Tractors
1998 Launched pilot project for retail tractor financing
1999 Commenced tractor retail financing in rural and semi-urban areas
2001 Total Assets crossed INR 10 billion
2002
Commenced financing of non-M&M vehicles and received Tier II debt
from International Finance
2004
Long term credit rating of AA+/Stable by CRISIL
Listing of non-convertible debentures on BSE on the wholesale
2005
Tie-up with HPCL
MIBL became wholly owned subsidiary
Commenced distribution of third party mutual funds
Page | 9
2006
A successful IPO, subscribed nearly 27 times more, tied up with Maruti
Udyog Limited ;Benchmark with 400 branches.
2007
Entered Commenced Home Loans Business through a subsidiary
Mahindra Rural Housing Finance Limited
2008
Received 12.5% equity participation from NHB for Subsidiary
Mahindra Rural Housing
2009
Launch of Fixed Deposits Program
2010 Loan against Gold launched in Kerala
2011 Crossed the benchmark of Rs.100 billion in Total Assets
2012 Crossed the benchmark of financing more than 2 million customers
Table 1
Products
Mahindra & Mahindra Financial Services Limited (MMFSL) is an India-based,
non-banking finance company. MMFSL?s product portfolio, providing the services
include vehicle loans (utility vehicles, commercial vehicles, tractors, cars, two-
wheelers and used vehicles); refinancing; housing finance; SME financing;
personal loans; fixed deposits; mutual fund distribution; insurance broking; loan
against gold, and construction equipment loan. It is a subsidiary of Mahindra &
Mahindra Limited (M&M). The Company has operations at 600 branches across
India. Its vehicle financing include auto and utility vehicles, tractors, cars,
commercial vehicles, two wheelers, three wheelers and construction equipment. Its
pre-owned vehicle financing include pre-owned cars, commercial vehicles and
tractors. Its insurance broking include insurance solutions to retail customers, as
well as corporations through its subsidiary Mahindra Insurance Brokers Ltd.
(MIBL).
Page | 10
1.2 Objectives of the Study
After being assigned to MMFSL for my Summer Internship Project, I sat down
with my Internal Faculty Guide and he suggested me to do my SIP on “Credit
Appraisal Process of Mahindra Finance”. When I expressed my interests to my
External Project Mentor at MMFSL, he agreed upon it and gave his word for
complete cooperation.
Here are the Objectives of my Project,
1. To learn as much as I could about Credit Appraisal Process.
2. To Study the existing Credit Appraisal System of MMFSL.
3. To provide the best tailored and quality Loan for the Customers.
4. To ensure Compliance with regulations and Fair Practice Code Policy.
5. To keep the goodwill of the Consumer.
6. To ensure that the Level of risk is Acceptable.
Page | 11
1.3 Scope of the Study
The topic selected is, “The credit appraisal system with respect to Mahindra
Finance”.
This means, how the employees in Mahindra Finance appraise individual?s and the
corporate firms? lending process and how the whole process is carried forward like
an integrated system, keeping certain aspects like risk, legality into concern.
The scope lays in Mahindra Finance, its potential borrowers, which is tailor made
at times to meet the client need and help with all the services the Mahindra Finance
can deliver in order to meet its goals and objectives.
Page | 12
1.4 Methodology
After being assigned to Mahindra Finance Ltd., for my SIP, I sat down with both
my internal faculty guide and external company guide to finalize a topic for the
same. We mutually agreed on doing the project on, “Credit Appraisal Process of
Mahindra Finance” and after a set of discussions we finalized on the following
research methodology to guide the progress of my assignment.
Here is a graphical layout of my Research Methodology,
Figure 1
Defining The
Objectives
Extensive
Literature
Survey
Preparing The
Research
design
Collecting Data
Analysis of
Data
Interpretation
of Findings
Preparation of
The Report
Presentation of
The Report
Finish
Page | 13
1.5 Limitations of the Study
During the course of my project, everything did not go the way I planned and
expected, for I faced certain obstacles. Some of these obstacles are stated below,
? As the information regarding the whereabouts of MMFSL?s customers is
confidential and could not be presented to third party, data regarding the
experience of customers and their suggestions for improvement could not be
retrieved.
? Lack of proper and sufficient data was the major problem in completing this
project.
? During collection of primary data, a lot of respondents did not agree to share
their experience. This did not only compel me to contact more people than my
sample size but also forced me to extend my time for data collection.
? The short duration of the project also stopped me from running a few more
errands that could have been beneficial to my research.
Page | 14
Page | 15
2.1 Products’ Profile
MMFSL is currently providing 3 categories of products.
A. Protection Products
B. Investment Products
C. Loan Products
All these three products are explained briefly.
A. Protection Products
Figure 2
Insurance
Individual
Insurance
Motor Insurance
Health Insurance
Travel Insurance
Home Insurance
Personal Accident
Insurance
Corporate
Insurance
Group Mediclaim
Policy
Group Personal
Accident Policy
Fire and Marine
Insurance
Office Package
Insurance
Reinsurance
Page | 16
The Features are,
? One-stop shop for all insurance requirements (Life & General)
? Superior negotiating skills through functional and technical competency
? Professionally qualified team to handle your portfolio
? Optimized premium outgo
? Most comprehensive coverage with best rates
? Documents and claims managed in the most professional manner
? Provision for technical discussions with the surveyor and insurer regarding
admissibility and quantum of claims
? Strong distribution network through our pan-India presence
? Regular updates on the insurance
B. Investment Products
MMFSL currently has 3 categories of Investment Products under its portfolio.
Figure 3
Investment Products
Fixed Deposits Mutual Funds Bonds
Page | 17
a. Fixed Deposits
In these uncertain times, one can get the most of one?s hard-earned money without
the risk of losing it. It?s wise to invest money in MMFSL?s Fixed Deposit schemes
that offer highly competitive interest rates and help it grow consistently over a
period of time.
Features Include,
? The MMFSL Fixed Deposit has a CRISIL rating of „FAAA?, which
indicates a high level of safety
? Cumulative as well as non-cumulative options available
? 0.25% additional rate for senior citizens
? 0.35% additional interest for all Mahindra group company employees
b. Mutual Funds
In today?s time, we all realize the need to move from just „saving? to „investing?
our money in the right areas. It?s only then that we help our money to achieve its
potential for growth. And mutual funds are where your money can really flourish
and easily beat the inflation. At Mahindra Finance, they recognize this opportunity
and have designed various schemes to help you invest your money and gain the
most from it.
MMFSL?s Mutual Fund Distribution team started its operation in September 2005,
and since then, has spread widely across the Southern, Western and Northern states
of India. The entire effort here is to provide you with end-to-end solutions to help
Page | 18
you achieve your financial objectives in a hassle-free manner. When it comes to
investing, we understand that everyone has unique needs based on their own
financial objectives and risk profiles. And while many investment avenues are
open to investors, it is usually seen that in the longer run, equities typically
outperform the others. Which is why, we believe that systematic investment in
equity has the potential to help your money reap maximum returns and in turn,
create more wealth for you in a shorter span of time. However, investing in equity
requires thorough understanding of the market and its myriad complexities. This is
where we step in with our expertise. Our advisors carefully understand your
investment objectives and risk appetite. They accordingly help you allocate your
money in schemes that are best suited for your unique needs. This way, you can
hang up your boots, lie back and watch your money do all the hard work.
Features Include,
? Equity Mutual Funds: Predominantly investing in equity and equity-related
instruments (Diversified)
? Sector Funds: Technically called Thematic Funds, investing in particular
sectors
? Index Funds: Investing in BSE listed stocks, managing the funds passively
? Fund of funds: Investing in the best performing mutual funds
? Tax Saver Mutual Funds: Section 80 C benefits, where the invested amount
is locked for three years
? Debt Mutual Funds: Investing in government-related instruments
? Monthly Income Plans: Where the monthly dividend is paid back to the
investor
? Liquid Funds: Investing in money market funds with high liquidity
Page | 19
? Floating Rate Short term Funds: Invests in debt securities, money market
instruments & floating rate instruments with maturity profile of three months
and up to 2 years
? Gilt Funds: Investing in government-related securities
? Fixed Maturity Plans: Fixed returns up to the maturity period
? Gold Exchange Traded Funds: Predominantly investing in gold commodity
stocks
? New Fund Offers: The new funds launched by Fund Houses at a face value
of Rs.10
The Loan product details are explained in detail in the next segment of this chapter.
Page | 20
2.2 Loan products
Loan Products at MMFSL has been divided into 4 categories:-
A. Vehicle Loan
B. Personal Loan
C. Home Loan
D. SME Loan
A. Vehicle Loan
Vehicle Loan at MMFSL has 7 Variants.
a. Tractor Loan
? MMFSL caters to all segments of customers owning a tractor or planning
to own one.
? Repayment based on cash flows i.e. monthly/quarterly and half yearly
(asset becomes loan free in five years)
? Quick disbursal within two days after loan approval
? Available for a wide range of tractors
? Stress-free loan sanction without mortgaging of land
? Easy and flexible documentation
b. Utility Vehicle Loan
? Individual between 21 to 58 years of age.
? Flexible repayment options ranging from 12 to 60 months
Page | 21
? Fast loan disbursement within 48 hours
? Competitive rates of interest
? Hassle-free documentation
? Pay online and through direct debit
? Enjoy a repayment period of up to 5 years
c. Car Loan
? A car loan from Mahindra Finance can be taken by all salaried and self-
employed persons, including farmers and traders as well.
? Minimum documentation to ensure a hassle-free process
? Quick car loan approval
? Up to 100% ex-showroom funding
? Multiple repayment options
d. Three Wheeler Loan
? Individual between 21 to 58 years of age.
? We cover the widest range of three-wheelers in India
? Flexible repayment options, ranging from 12 to 36 months
? Loan sanctioned within 48 hours
? Enjoy hassle-free documentation
? Multiple plans customized to match your needs
? Competitive rates of interest
Page | 22
e. Commercial Vehicle Loan
? For new CVs
o Any individual/partnership firm/Public Ltd. And Pvt. Ltd.
Company.
? For old CVs
o Any individual/partnership firm/funding extended to first time
users as well as transporters.
? The rate of interest for the loan depends on various factors like customer
profiles and location.
? A commercial vehicle loan can be taken for a variety of commercial
vehicles, which may be used at different locations. The loan is applicable
to customers with diverse profiles.
? For new CVs
o Fast processing
o Greater flexibility
o Maximum tenure of 60 months
o Competitive rates
o Customized financing
? For old CVs
o Finance against vehicles that are up to 15 years old
o Maximum tenure of up to 3 years
o Maximum finance flexibility
Page | 23
f. Two Wheeler Loan
? Individual between 21 to 58 years of age
? Quick and efficient loan approval
? Special 0.5% rebate for women customers
? Maximum funding of up to 80% on LTV
? Flexible repayment option, ranging from 12 to 36 months
? Loan insurance available
g. Used Vehicle Loan
? Individuals looking to buy a second-hand vehicle
? Individuals keen on a re-loan against a four wheeler
? Used vehicle loans available for vehicles up to 10 years old
? Lower rates of interest as compared to other unsecured loans
? Maximum flexibility
? Speedy loan disbursements
B. Personal Loan
Personal Loan at MMFSL has 2 variants
a. Personal Loan
? The personal loan is available for existing Mahindra Finance customers
and Mahindra Group employees only.
? For existing Mahindra Finance customers:
? A good repayment track record is mandatory
Page | 24
? For Mahindra Group employees:
? All confirmed employees of M&M Ltd., or any of its subsidiary
companies
? Should have completed at least two years of service with the organization
? Should be between 21 to 58 years of age
? Instant personal loan approval and disbursement in 2 days
? Loans of up to Rs. 3 lakh
? Hassle-free documentation with maximum flexibility
? Maximum loan tenure of up to 3 years*
? Easy EMI payment option through cheque, ECS, mobile transfer or cash
at the branch
b. Gold Loan
? The individual should own gold jewelry and fulfill the KYC norms as per
RBI guidelines.
? Get a gold loan of up to Rs. 10,00,000/-
? Repay only by servicing regular interest on the loan/EMI repayment
option available on request
? Enjoy assured security of your gold jewelry
? Loan tenure is of 1 week to 3 years
C. Home Loan
? MRHFL will consider the applicant/co-applicant?s:
o Income
Page | 25
o Age
o Employment stability
o Regularity and consistency of income
o Savings
o Family background
o Assets and liabilities
o Other factors that are likely to affect loan repayment
? Wide network across the country to ensure you have no trouble reaching
us
? Personalized documentation assistance for smooth processing
? Flexible repayment options
? Door-to-door servicing to ensure maximum convenience
? Loan available for various purposes – construction, renovation,
improvement and purchase
? Fixed and variable rates of interest subject to conditions
D. SME Loan
SME loans are offered to companies/partnership firms in select sectors like
automobiles, auto-ancillary and food and agri-processing. The company/firm
must be in business for at least 3 years with profit in the last audited financial
year. Greenfield projects can be considered only from established players in
that business. Dealer inventory funding loans can be considered for established
dealers of reputed automobile OEMs.
MMFSL?s SME Loan has 9 variants.
Page | 26
a. Project Finance
? Finance amount: Up to Rs. 40 crore
? Margin requirement: Depends on customer profile
? Tenure: Up to 6 years
? Security: Normally asset cover of 1.5 times
b. Equipment Finance
? Finance amount: Up to Rs. 25 crore
? Margin requirement: Flexible
? Tenure: 6 months to 5 years
? Security: Normally asset cover of 1.5 times
c. Corporate Loans
? Finance amount: Up to Rs. 25 crore
? Tenure: 1 year to 5 years
? Security: Normally asset cover of 1.5 times
d. Secured Business Loans
? Finance amount: Based on valuation of property
? Security: Normally asset cover of 1.5 to 2 times
? Tenure: Up to 7 years linked to business cycle
e. Working Capital Loans
Page | 27
f. Bill Discounting
? Finance amount: Up to Rs. 10 crore
? Validity: Up to 12 months
g. Lease Rental Discounting
? Finance amount: Up to Rs. 25 crore
? Tenure: Up to 6 years
? Security: Mortgage of the property under lease
h. Financial Advisory
? Advice Given on:
o Loan structuring
o Cash position improvement and interest cost reduction
o Government?s incentives available for the sector
i. Insurance Solutions
? Advice Given on:
o Insurance cost reduction
o Insurance cover optimization
o Insurance features fitment
Page | 28
2.3 Credit Appraisal Process
During my research at Mahindra finance, I noticed that Mahindra finance always
follows a specific procedure for approving loans, irrespective of their variant.
I also observed the whole procedure very carefully and realized that it could be
decomposed into 8 basic steps. They are:-
1) Interest shown by potential customers
2) Briefing by Mahindra Finance
3) Filling up of form
4) Submission of documents required
5) Verificaton of documents
6) Recording deviations
7) Deviation Approval
8) Loan Approval
Now, I am going to briefly describe each of the above 8 steps involved in the
Credit Appraisal Process of Mahindra Finance.
1) Interest Shown by Potential Customers
Whenever a person desires to buy a vehicle he/she approaches a dealer. After
Selecting the Vehicle, the on road price is being evaluated. If the person opts for
financial assistance and Mahindra finance in particular, he/she becomes a potential
customer to Mahindra finance .The dealer makes arrangements for a meet of
between the customers and Mahindra Finance.
2) Briefing by Mahindra Finance
Page | 29
When the customer agrees to take loan from Mahindra Finance, the MMFSL agent
briefly talks about the terms & conditions of Mahindra Finance for availing the
Loan.
3) Filling up of form
After all the discussions have been completed and the person has agreed to take
loan from Mahindra Finance, he is given a loan application form to fill up.
4) Submission of documents required
For submission of the form, what are the documents required, the agent tells to the
person, applying for the Loan.
There are 5 types of documents required to submit the form for loan:-
? Co-hirer documents: Identity Proof, Residence Proof, Photo with Front
attested, Income Proof, Bank Statement Mention Last 6 Months, PDC- Post
Dated Cheques, Signature Verification and CIBIL Score and LTV (Loan to
Value).
? CIBIL (Credit Information Bureau of India Limited): CIBIL is India?s first
Credit Information Company (CIC) founded in August 2000. CIBIL collects
and maintains records of an individual?s payments pertaining to loans and
credit cards. These records are submitted to CIBIL by banks and credit
institutions, on a monthly basis.
? CIBIL Score: The CIBIL Score is a 3 digit numeric summary of one?s
credit history which indicates the financial & credit health. The Score is
derived from credit history as detailed in the Credit Information Report
[CIR] and ranges from 300 to 900 points. Credit score tells the lender
Page | 30
how likely you are to pay back loan or credit card dues based on past
repayment behavior.
? Guarantor Document
? Co-hirer Document
? Office Documents: Agreement Duly Sign, Offer Letter, IRR Sheet (Internal
rate of return sheet), MLS (Multiple Listing Services) Form, Vehicle
Scheme, Field Investigation Report, Route Map, Proposal Form, Sanction
Letter, Post Tele-verification.
? Dealer Documents: Invoice, Sales Certificate, Delivery Challan, Chassis
Print, Duplicate Key, Dealer Recommendation sheet, Balance Of Payment
Case, IHM Receipt(Both dealer & Mahindra Finance), Insurance Policy,
Welcome Letter, Tax Challan, RC Copy and Certificate.
5) Verification of documents
After submission of all the documents, the agent verifies all the documents for
address, Identity proof, electricity bills, annual income etc.
6) Recording deviations
If the applicant fails to fulfill any of the requirements, it is recorded as deviation
from the usual requirement. All such deviations are recorded duly, without any fail.
7) Deviation approval
If MMFSL believes that one or some of the deviations are acceptable under the
circumstances and a deviation approval letter is being given by the Mahindra
Finance.
8) Loan Approval
Page | 31
After all the process has been completed and MMFSL finds that the person
applying for the Loan is actually eligible for it, the Loan is sanctioned.
Applications for Loan & their processing
Customers, who have evinced interest in availing the loan from MMFSL should fill
up the loan application form, complete in all aspects and should submit the same to
the Company?s nearest branch.
The application so received will be acknowledged by the Company immediately on
submission and will be processed for sanction of the loan. The Company will
consider all the documents submitted and the information provided, verify the
creditworthiness of the customer and evaluate the proposal at its sole discretion
and will grant loan by issuing a sanction letter within 10 days from the date of
receipt of the loan application and if no communication is received by the
customer, the loan application is deemed to have been rejected and the Company
will not send any communication for rejected cases. Sanction letter in the
vernacular language is to be issued to all borrowers whose loan have been
sanctioned after due diligence.
The fair practice code: compliant to the RBI circular: DNBS.CC.PD.No.
320/03.10.01/2012-13 dated February 18, 2013 is given as follows.
Loan Appraisal and Terms & Conditions
The sanction letter in the vernacular language would convey the following:
? Amount financed
? Documents to be submitted for disbursement of the loan
Page | 32
? The rate of interest
? Details of security to be offered
? Repayment schedule
? Penal interest or delayed payment charges (in case of delay in payments of
installments beyond due dates)
? Documents to be executed by the guarantor and co-borrower for
disbursement of loan.
Copy of the sanction letter will have to be accepted. The customer will have to
return to the Company a copy of the sanction letter duly acknowledged by him as a
token of acceptance. Thereafter Company will issue D.O. / cheque in favor of the
dealer or customer as the case may be.
Though the existing loan agreement provides a clause for the delayed payment
charges, the same is not in bold letters as suggested. Going forward, all loan
agreements will mention this clause in bold letters.
Disbursement of Loans, including changes in terms & conditions
Any change in terms of Conditions like change in interest rate, tenure, all
charges/fees would be communicated to the borrower in writing in the vernacular
language. Any decision to recall, accelerate payment would be communicated to
the borrower in writing as per the terms of the agreement. NOC is to be issued on
recovery of all dues. Collateral, if any, will be released along with the NOC. Any
collateral taken to guarantee the performance of contract will be duly
acknowledged and kept in safe custody. Cross holding of securities will be duly
communicated in writing vide RPAD giving reference of balance exposure in other
contracts. Company will take recourse / actions only through legally permissible
Page | 33
remedies as per the terms & conditions of loan agreement entered into with the
borrower.
Only written request from customers for transfer of liabilities will be evaluated by
the company and written confirmation / rejection will be intimated to the customer
within 21 days of after due diligence. Any agency to which various activities are
outsourced/ entrusted will have to be short listed and empanelled as per the
company policies issued from time to time. The Company has an exclusive
recovery team who are specialized in handling collection activity in a professional
manner by adopting a due legal process as per the law of the land. Since it is a
specialized function, the quality is addressed at the recruitment level itself.
Grievance Redressal Mechanism
In case of any complaint / grievance, the customer can make his complaint through
any of the following modes:
? Website: Email ([email protected])
? Customer Walk-in at Branch
In case customer chooses to log his complaint through either of website and email,
an email / SMS will be sent to the customer, acknowledging his complaint and also
informing about his complaint number and expected time of resolution. These
complaints will be received by a Nodal Customer Care Executive (through a
complaint tracking module) at our Head Office in Mumbai. These complaints
would be then referred to respective location and function for resolution. In case
customer chooses to log his complaint at the branch he would be requested to give
complaint in writing, In case customer is not able to write then, the branch
accountant will fill his details filled in a complaint sheet and provide him his
Page | 34
unique complaint number, with expected time of resolution. These complaints will
be regularly monitored by Nodal Customer Care executive to ensure effective
resolution and escalation. The company will not only ensure that all the complaints
received are recorded and resolved, but also ensure effective monitoring /
escalation mechanism to the senior levels responsible so as to ensure that none of
the complaints remain unresolved.
All disputes arising out of the decisions of branches in relation to the products and
services shall be heard and disposed of at least at the next higher level. Therefore,
the following „Grievances Redressal Mechanism? is put in place.
Complaint Level Redressal Level
Branch Level Territory Level
Territory Level Regional Level
Regional Level Zonal Level
Zonal Level Head Office Level
Table 2
Post resolution of the complaint, the customer will get a mail / SMS confirming the
resolution of the complaint. At this point customer has to confirm whether the
complaint has been resolved to his satisfaction or not. The complaint will be
deemed closed if customer does not respond to mail / SMS.
At all branches of the company, prominent display boards will be put up informing
them, about the Grievance Redressal Officer [including the name and contact
details (Telephone / Mobile nos. and also e-mail address) (Branch Accountant)
Page | 35
responsible for logging and resolving at the branch. Also detailed information
(including contact details) will be mentioned on how to escalate the matter, in case
customer finds resolution inadequate. If the complaint / dispute are not redressed
within a period of one month, the customer may appeal to the General Manager,
Reserve Bank of India, DNBS Mumbai Regional Office.
Reserve Bank of India vide its notification No. DNBS. 204 / CGM (ASR)-2009
dated January 2, 2009 and vide its Guidelines on FPC for NBFCs
DNBS.CC.PD.No.266/03.10.01/2011-12 dated March 26, 2012 have directed all
NBFCs to
? Communicate the annualized rate of interest to the borrower along with the
approach for gradation of risk and rationale for charging different rates of
interest to different categories of borrowers.
? Make available the rates of interest and the approach for gradation of risks
on the web-site of the companies.
Rate of interest
The Company intimates the borrower, the loan amount and rate of interest at the
time of sanction of the loan along with the tenure and amount of the monthly
installment.
Approach for gradation of risk
The rate of interest is arrived at based on the weighted average cost of funds,
administrative costs, risk premium and profit margin. The decision to give a loan
and the interest rate applicable to each loan account is assessed on a case to case
basis, based on multiple parameters such as the type of asset being financed,
Page | 36
borrower profile and repayment capacity, borrower?s other financial commitments,
past repayment track record if any, the security for the loan as represented by the
underlying assets, loan to value ratio, mode of payment, tenure of the loan,
geography (location) of the borrower, end use of the asset etc. Such information is
collated based on borrower inputs and field inspection by the company officials.
The rates of interest are subject to change as the situation warrants and are subject
to the discretion of the management on a case to case basis.
Repossession of vehicles financed
The Company adopts due legal process as detailed below for repossession of
vehicles financed
? Termination of the contract
? Recall of the loan for all NPA cases
? Invocation of arbitration clause and appointment of arbitrator
? Filing statement of claim (S.O.C.) along with details of the agreement,
invoice, asset with a prayer seeking interim relief of repossession of the
vehicle before the arbitrator
? Arbitrator to send the S.O.C. to the respondents and intimate the date of
hearing
? Seeking permission for interim relief of repossession on the date fixed for
hearing
? Appointment of Receiver by the Arbitrator to repossess the vehicle
? After obtaining the interim order, informing concerned police station having
jurisdiction about the repossession order along with the copy of the order
? Repossession of the vehicle with repossession order
Page | 37
Lending against collateral of gold jewelry
The Company has put in place a Draft policy for lending against gold. Please refer
our Draft Policy on 'Lending against collateral of gold jewelry'
Policy note for "loan against gold"
? Product
? Target Customer segment
? Purposes
? Quantum of finance
? Tenure
? Interest and charges
? Penal interest
? Documentation
? Ownership of gold
? Release of Jewelry
? Spurious Gold Inflow
? Staff Training
? Branch Holiday
Product:
To provide short tenure loans to the customers against gold jewelry as collateral
Target Customer segment
Any individual, who owns gold jewelry and fulfills the KYC norms as per RBI
guidelines, is the target customer.
Page | 38
Purposes
The loan can be extended for one or more of the following purposes:
? Agriculture
? Education
? Marriage expenses
? Personal needs
? Business purposes
? Medical needs
? Loan will not be extended for speculative & illegal purposes
Quantum of finance
? Minimum amount per pledge: Rs. 1000/- (one thousand rupees only)
? Maximum amount per pledge: Rs. 10,00,000/- (Ten lakh rupees only)
? Above Rs. 5 lakhs loan - Field Investigation of the customer will be
mandatory
Branch is to maintain LTV ratio 60% on a portfolio basis as per RBI guidelines.
Quantum and purity of gold, that can be pledged and deductions to be considered.
The minimum net weight of gold than can be considered for pledge is 1 gram. The
weight of stones, pearl, coral or any other foreign material contained in the
ornament shall be deducted to arrive at the net weight.
? Min Tenure: 7 Days
? Max Tenure: 365 Days
Page | 39
Upon maturity of the loan, the pledge may be renewed at the request of the
borrower, and subject to the discretion of MMFSL.
Interest and charges
Interest and other charges to be charged upon the loan shall be as per the schemes
circulated from time to time. The interest rates are decided based on gradation of
risk policy. The interest shall be calculated for the number of days the loan remains
outstanding, including the date of loan disbursement and the date of repayment.
However, if the borrower closes the loan within 7 days from the date of
disbursement, then a minimum interest for 7 days shall be payable. The interest
shall be payable by the borrower at intervals of 30 days from the date of pledge. A
grace period up to 3 days may be allowed in payment of interest without penal
charges, at the discretion of the branch.
Penal interest
In the event for failure of the borrower to pay the interest at the specified interval
or within the grace period permitted, maximum penal interest @ 3% per month
shall be charged on the interest thus due and payable. The interest on the loan
amount shall be payable by the borrower every month.
Documentation
Any one or more of the following KYC Documents
Identity Proof: Passport/PAN/Driving License/Voter ID card/Ration Card/any
other identity card issued by a government authority, PSU or nationalized bank,
containing the photograph of the customer. Address proof: If any of the documents
taken as identity proof also contains the address of the borrower, no separate
Page | 40
address proof is mandatory. In other cases, the following documents can be taken
towards address proof: Ration card/latest electricity/landline telephone bills/house
tax receipt/valid rent agreement/gas connection allotment letter/bank passbook or
any other documents issued by a government authority, PSU or nationalized bank,
containing the address of the customer.
Customers have to sign a declaration of ownership of jewelry.
Jewelry Handling
? Proper weight of the jewelry to be taken & to be appraised as per matrix
? Both customer & appraiser to signature on the measurement slip
? Jewelry to be packed securely along with the item & weight slip and kept in
the locker
? Individual packets to be prepared for each contract
? Purity check shall be conducted as per the matrix
Ownership of gold
Before disbursement, the branch executive will enquire customers about the
ownership of the jewelry being pledged for loan. The customer needs to give an
ownership declaration in the prescribed format.
Pricing
Gold price to be announced daily/weekly from HO, the same will have the system
validation. Any calculation on disbursement amount will be based on a system-
validated rate. All valuation of Gold/jewelry for disbursement will be based on the
Basic Gold purchase price announced from HO only.
Page | 41
Safety Measures
Utmost precaution is taken to ensure safety of the branch & the stocks. Security
measures to be taken as per company direction. Insurance coverage of all kinds of
risk including fidelity is must for all the branches.
Items not considered for Disbursement
? Melted bar/Primary Gold
? Coins
? Jewelry of a temple/church
? Top
Release of Jewelry
Jewelry shall be released to the same customer on receipt of full dues including the
principal, interest, penal interest and charges, if any. In case of part payment,
protonate jewelry wherever possible can be released. Any release whether partial
or full can be done after verification of original KYC documents & customer copy
of original pawn ticket.
Fraud Control
All kinds of fraudulent activities or attempt to fraud cases, whether it is by the
external or the internal reasons must be brought to the knowledge of the
management as soon as it is detected for proper action as per company guidelines.
Page | 42
Stock Auction
If the loan account is not settled/ renewed after the completion of tenure, company
would wait for the customer for six month tenure. Minimum three legal notices to
be sent to customer after expiry of the tenure with a gap of 15 days in each notice
prior to auction. The auction will be announced to the public by issue of
advertisements in at least 2 newspapers, one in vernacular language and another in
a national daily newspaper. Stock would be auctioned by the board approved third
party auctioneer. Mahindra Finance, its related entities and employees will not take
part as a purchaser of gold jewelry from the auction.
Due insurance coverage and security for stock transit would be ensured before
moving stock for auction. The proceeds of auction, net of auction related expenses
and incidental charges shall be adjusted against the loan account. Any shortfall
after such adjustment shall be recovered through legal action, and any excess shall
be refunded to the customer.
Staff Training
Training centers to be created at various locations to trained staff on purity,
security and operational excellence. The entire gold loan employees have to go
through the purity check and operational training as per company program.
Page | 43
Page | 44
3.1 Collection of Data
I decided to go for collecting both Primary Data and Secondary Data in my project
work.
Primary Data is the data collected for the very first time, whereas secondary data is
previously collected published or unpublished data.
3.1.1. Primary Data
As I did neither have the information about the present customers of Mahindra
Finance nor the details regarding the potential customers who have applied for a
loan at Mahindra Finance, the perception of existing customers towards the loan
products of MMFSL and the expectations of potential customers of MMFSL from
loan products could not be retrieved.
That?s exactly why I decided to go for collection of data that will help me
understand the perception and expectation of existing as well as potential
customers of loan products in general.
Thus, I prepared a questionnaire that will serve to my purpose.
A copy of the questionnaire is attached as Annexure I.
I also decided to go for a sample size of 20 due to time constraints and usually
found non-responsive nature of respondents. I went for Non Probabilistic and
Convenience Sampling.
After collection of the data, I used Nominal Scaling Technique and Ordinal Data
type for tabulating the data in MS Office Excel.
Page | 45
3.1.2 Secondary data
I also collected the data regarding the total number of loan applications put for the
year 2012-13 and for the month of May.
2012-13 Annual data
Average No. of Loans Applied – 12,000 (Approx.)
No. of Loans Sanctioned- 10,500 (Approx.)
No. of Loans rejected- 1,500 (Approx.)
The common reasons behind the most number of rejections are,
? If the Identity Proof doesn?t match the person.
? If the Residence Proof is faulty
o A person, who is a Permanent resident of one state, but applying for
a loan in another state, his/her loan application form will be rejected.
? If CIBIL Score is wrong.
? If the Field Investigation report is not fulfilled well.
Average time taken for sanctioning a Loan is 2 days, if all documents are genuine.
Data for the month of May
No. of Loans Applied -100
No. of Loans Sanctioned-95
No. of Loans Rejected-5
The reasons resemble the reasons stated above.
Average time taken for sanctioning a Loan is 2 days, if all documents are genuine.
Page | 46
Page | 47
4.1 Analysis of data
For analysis of primary data, I first tabulated all the collected primary data
conveniently in a MS Office Excel Spread Sheet using Nominal Scaling
Technique.
This helped me to convert all the qualitative data into quantitative data and the
process of analysis became easier.
Then I used IBM SPSS to analyze the primary data further using statistical analysis
tools.
As for analysis of secondary data, I used simple mathematical calculation to figure
out the success rate of loan approvals in MMFSL, Bhubaneswar and the trend of
growth.
Page | 48
4.1.1 Primary Data Analysis
I had an even distribution of Age Group and Monthly Income among the
respondents of my questionnaire. At some point, they have all applied for a Loan at
least once.
When asked about whether their loan has been approved or denied, this is the
response I got from the respondents.
The 75% loan has been approved of the respondents and another 25% loan has
been denied. This gives almost a success rate of 75% for approval of Loans.
Page | 49
When asked about the reason for which their loan was denied, this is what they had
to say,
20% of the respondents said that their loan has been rejected due to rejection of
application form, 20% due to low CIBIL Score, 40% due to non-compliance with
terms and conditions and another 20% due to not satisfying the Eligibility criteria.
This means that, Non-Compliance with the terms and conditions is the major
reason behind denial of Loans.
Page | 50
When asked to rate the various aspects of applying for and getting a loan approved,
based on their personal experience, here is what they had to say,
70% of the respondents rated “Response to Questions and Requests by staff” as
highly satisfactory, satisfactory and good. This means that the customers depend a
lot on this factor.
Page | 51
30% and 25% of the respondents agreed on rating the briefing of terms and
conditions process by the loan provider as good and satisfactory. This means, it has
a great influence over the borrower?s impression.
Page | 52
A total of 60% of the respondents rated their experience on briefing of the
Application process and guidance as highly satisfactory, satisfactory and good.
Page | 53
Mixed Response was received upon asking the question about the experience with
friendliness and helpfulness of the employees at Loan Provider?s Office.
Page | 54
When asked to rate the average time taken for the whole process, 20%, 15%, 25%,
20% and 20% of the respondents rated it as highly satisfactory, satisfactory, good,
dissatisfactory and highly dissatisfactory.
Page | 55
60% of respondents rated information available on official website of the loan
provider to be highly satisfactory, satisfactory and good.
Page | 56
The overall experience for 55% of the respondents has been highly satisfactory,
satisfactory and good.
Page | 57
Majority of the respondents agreed that the average time taken for approval of a
loan is from 2 to 7 days (around 55%).
Page | 58
30% of the respondents suggested that friends have influenced their decision the
most to take loan, whereas 30% are compelled by Agents. Rest 40% take their
decision either on their own or family.
Page | 59
There was an even distribution of responses when asked about the media through
which they come to know of the loan provider. However agents are the most
successful media here (25%).
Page | 60
When asked about the importance of past experience with the same loan provider,
65% of the respondents very important and important, other 35% said not
important.
Page | 61
Even distribution of the respondents commented that the interest rate is very
important and important.
Page | 62
20% of the respondents do not think that the service quality is important. But rest
80% still believes that it is either important or very important.
Page | 63
When asked about the Timeliness of the approval of the loan and the whole
process, 20% of the respondents said that it is not important. But rest of the 80%
still agrees that it is very important or simply important.
Page | 64
When asked about the importance of reputation of the loan provider, 40% of the
respondents suggested that reputation of the loan provider is very important and
20% suggested that it is not important, while 40% said that it is simply important.
Page | 65
50% of the respondents agreed that the briefing by agents is very important for
their decision regarding loan, followed by 35% who believe it to be just important.
Whereas, 15% of the respondents believe that it is not important.
Page | 66
When asked about based on their personal experience, would they recommend the
same loan provider to others, 75% of the respondents said yes. This shows a great
level of brand loyalty.
Page | 67
75% of the respondents agreed that they would again go for the same loan provider
if they will need to apply for another loan in future. This also proves that if all goes
well and the customer is satisfied with the service quality of the loan provider,
when the time comes he/she will go for the same loan provider.
Page | 68
4.1.2 Secondary Data Analysis
From the data collected above, I calculated the success rate for sanctioning of loans
both for the year 2012-13& for the month of May, 2013.
? Success rate For the Year 2012-13= 10500/12000×100=87.5%
? Success rate For the month of May= 95/100×100=95%
The income from loan for the financial year 2012 April to 2013 March is
Rs.3,40,079.74 Lacs.
The income from loan for the financial year 2011 April to 2012 March is
Rs.2,44,286.16 Lacs.
The income from loan of Mahindra finance for the financial year 2012 April to
2013 March is greater than the financial year 2011 April to 2012 March of the
amount Rs.95793.58.
In the above information it is well known that the company is increase the income
from year to year.
Page | 69
4.2 Factor Analysis
By using Factor Analysis through IBM SPSS, I have reduced the total 18 number
of factors responsible towards shaping a customer?s perception towards loan
products into 7 major identifiable factors. They are given below.
Table 3
1) Briefing of the terms and conditions along with transparency in the whole
appraisal process top our list of factors responsible for shaping a positive
perception towards loan products.
2) The next factor is the combination of briefing regarding the application
process and the average time taken in completion of the whole process with
approval of the loan.
3) The rate of interest and briefing by agents are the third most important
factors for the same.
4) Special concessions and considerations are the fourth most important factor
for a good perception towards loan segment.
Page | 70
5) Quality of service is the fifth most important factor.
6) Timeliness is the sixth most important factor.
7) Finally, courteous greeting is the seventh most important factor, responsible
towards shaping the perception of customers for loan providers and loan
products.
Page | 71
Page | 72
5.1 Findings
? The Project includes understanding of various credit facilities provided by the
Mahindra Finance, how a Loan proposal is made to the NBFC, what is the
formality to be kept in mind, terms and conditions to be satisfied and also the
credit appraisal techniques involved while appraising a loan proposal.
? There is a minimum document and credit parameters checklist which contains
the list of documents required for the loan consideration under different
products/schemes .It is Mandatory to produce these documents, else the loans
won?t be sanctioned.
? My learning from this Project was about how risks are faced by Mahindra
Finance and how they are mitigated. Mahindra Finance uses various tools in
which risk can be diversified thereby helping bank in making efficient
decisions.
? One more learning during internship is the way Mahindra Finance assigns a
credit rating for a company/party. The Mahindra Finance analyses risk and
assigns the various values? statements that are predesigned and assigns a credit
score. This helps in finalizing the price of the loan.
? Another important aspect of the credit appraisal is borrower?s ratings. Mahindra
Finance has an elaborate rating system that really helps in extending the loans
to the customers, considering the risk associated with them.
? The underlying assumptions that considered for the appraisal of the term loan
require proper assessment of risks. The increase in the risks in the future
periods of the project increases with the decrease in cash flow generated.
Page | 73
Page | 74
6.1 Suggestions
? Mahindra Finance must start by creating a NBFC environment for
entrepreneurship and build a new infrastructure for innovation through making
credit easily available in all the sectors of economy through Mahindra Finance.
? Mahindra Finance should provide easy credit with reasonable interest rates to
all citizens in every sector to remain as a competitor and play a positive role in
economic development.
? The Mahindra Finance should follow number of initiatives like providing loans
and credit to raise the standard of people and alleviate property income.
? The focus of this project is concentrations of credit risk; but management must
also efficiently manage other potential risk concentrations.
? Credit appraisal is the backbone of the NBFC?S. This is equally important and
dangerous, as chance of default or other risk is always there.
? The source of information collected for a better understanding of the credit
appraisal process is provided by the Mahindra Finance as well as the
observations made thereon.
Page | 75
6.2 Conclusion
During the course of the project I became up, close and personal with the credit
appraisal process of Mahindra Finance and realized the importance of credit
appraisal and risk management and how wonderfully all the steps involved should
be maintained in order to keep it a mutually beneficial affair.
This project did not only help me expanding the base of my knowledge but also
give me an excellent opportunity to acquaint myself with such an organization.
I believe my findings, suggestions and recommendation would be beneficial to
MMFSL.
Page | 76
Page | 77
Annexure I
“Credit Appraisal Process of Mahindra Finance”
Questionnaire
1. Name
2. Age Group
20-30 Years 30-40 Years 40-50 Years More than 50 Years
3. Monthly Income
Less than 15000 15000-30000 30000-45000 More than 45000
4. Have you ever applied for any loan?
Yes No
5. If yes, was it approved or denied?
Approved Denied
6. If denied, what was the reason?
Rejection of Application Form
Page | 78
Lack of submission of all documents
Low CIBIL Score
Non-compliance with terms and conditions
Not satisfying Eligibility Criteria
7. Based on your experience please rate the following.
Highly
Satisfac
tory
Satisfac
tory
Good
Dissatis
factory
Highly
Dissatis
factory
Courteous Greeting at First
Meet
Professionalism and
Knowledge of staffs
Response to Questions and
Requests
Briefing of the terms and
conditions
Briefing of the Application
Process
Transparency of the Appraisal
Process
Friendliness and Helpfulness
of Staffs
Time taken for the whole
Page | 79
process
Information on website of the
loan provider
Contact through Phone and
email
Overall Experience
8. What was the time taken for the approval of the loan?
Less than 2 days 2-4 days 4-7 days More than 7 days
9. Who influenced your decision the most?
Self Family Friends Agents
10. How did you come to know of the Loan Provider?
Advertisement Agents Family/Friends Website Others
11. Please rate the importance of the following factors.
Factors Very
Important
Important
Not
Important
Past experience with the Loan Provider
Interest Rate
Page | 80
Service Quality
Timeliness
Reputation of the Loan Provider
Briefing by Agents
Special concessions and considerations
12. Based on your experience, would you recommend others for the same Loan
Provider?
Yes No
13. Based on your experience, would you approach the same Loan Provider again?
Yes No
14. Do you have any other suggestions?
Thank You Very Much for your Co-operation.
Page | 81
Page | 82
Text Reference
? Kothari C.R., Research Methodology, 2
nd
Revised Edition, New Age
International Publishers.
? Mukherjee D.D., Credit Appraisal, Risk Analysis and Decision Making, 6
th
Revised Edition, Snow-white Publishers.
? Bhattacharya Hrishikesh, Banking Strategy, Credit Appraisal, and Lending
Decisions: A Risk-Return Framework, 2
nd
Edition, Oxford.
? Chattopadhyay Kamal, Understanding Credit Appraisal in Banks, Academic
Publishers.
Web Reference
? http://en.wikipedia.org/wiki/Credit_risk
? http://en.wikipedia.org/wiki/Credit_rating
? http://www.mahindrafinance.com/get-a-loan-overview.aspx
? http://www.mahindrafinance.com/fair-practice-code.aspx
? http://www.mahindrafinance.com/int-rates-grade-risk.aspx
doc_832522866.pdf
The topic, “CREDIT APPRAISAL PROCESS OF MAHINDRA FINANCE” demanded an elaborate study of the presently followed credit appraisal process of Mahindra Finance, make suggestions regarding betterment of the whole system if any, and finally base all the above on solid research work.
A
Summer Internship Project Report
On
“Credit Appraisal Process of
Mahindra Finance”
Submitted By
Debi Prasad Patra
Regn. No. : 1201247159
Batch : 2012-2014
For the Partial Fulfillment of Post Graduate Diploma in Management, under
Regional College of Management (Autonomous), Approved by AICTE.
Under the Guidance of
External Guide Internal Guide
Mr. Kalyan Dash Prof. R. K. Mishra
Associate HR Asst. Professor
Mahindra Finance, Bhubaneswar Finance and Accounts, RCM(A)
REGIONAL COLLEGE OF MANAGEMENT (AUTONOMOUS)
Chakadola Vihar, Chandrasekhar Pur, Bhubaneswar – 751023, Odisha
Tel : +91 674 2301595 / 2300455, Fax : +91 674 2300421, Website : www.rcm.ac.in
I hereby declare that the Project Report entitled, “Credit Appraisal
Process of Mahindra Finance” is my original research based project
work, prepared for submission to Mahindra Finance, in completion of
the requirement of Summer Internship under the direct guidance and
supervision of both my Internal and External Guides, and the project has
not formed the basis for the award of any degree, diploma, associate
ship, fellowship or any other similar titles, to be submitted to any
University or Institution.
Debi Prasad Patra
Reg. No. 1201247159
PGDM : 2012-14
RCM (A)
Date :
Place :
This is to certify that Mr. Debi Prasad Patra, Reg. No. 1201247159,
student of PGDM (Full-Time), Regional College of Management
(Autonomous), Bhubaneswar has completed the Summer Internship
Project titled, “Credit Appraisal Process of Mahindra Finance” under
my supervision, in completion of the requirement of Summer Internship
at Mahindra Finance and Partial Fulfillment of his Post Graduate
Diploma in Management Course.
Prof. R. K. Mishra
Dept. of Accounts and Finance
RCM (A), Bhubaneswar
Date :
Place :
Page | 1
Table of Contents
Acknowledgement………………………………………………………………...03
Executive Summary……………………………………………………………….04
List of Illustrations………………………………………………………………...05
Chapter 1
1.1 Company Profile……………………………………………………….07
1.2 Objectives of the Study………………………………………………...10
1.3 Scope of the Study……………………………………………………...11
1.4 Methodology…………………………………………………………...12
1.5 Limitations of the Study………………………………………………..13
Chapter 2
2.1 Products? Profile………………………………………………………..15
2.2 Loan Products…………………………………………………………..20
2.3 Credit Appraisal Process……………………………………………….28
Chapter 3
3.1 Collection of Data……………………………………………………...44
3.1.1 Primary Data……………………………………………………….44
3.1.2 Secondary Data…………………………………………………….45
Page | 2
Chapter 4
4.1 Analysis of Data………………………………………………………..47
4.1.1 Primary Data Analysis……………………………………………..48
4.1.2 Secondary Data Analysis…………………………………………..68
4.2 Factor Analysis…………………………………………………………69
Chapter 5
5.1 Findings………………………………………………………………...72
Chapter 6
6.1 Suggestions……………………………………………………………..74
6.2 Conclusion……………………………………………………………...75
Annexure………………………………………………………………………….76
References………………………………………………………………………...81
Page | 3
Acknowledgement
I deem it a great pleasure and opportunity to dedicate the following few lines to
some persons, who enabled me to complete this Project in the stipulated time
period.
I express my obligations and gratitude towards Mahindra Finance, Bhubaneswar
and Prof. P.K. Pattjoshi, Dept. of Accounts and Finance, RCM (A), Bhubaneswar
for making the arrangements for this incredible Summer Internship Project in the
first Place.
I am really indebted to my Internal Guide, Prof. Rama Krishna Mishra,
Department of Accounts and Finance, RCM (A), my Project Mentor, Mr. Kalyan
Dash, Associate HR, Mahindra Finance, Bhubaneswar and Mr. Sk. Ziauddin,
Area Accountant, Mahindra Finance for their invaluable guidance, suggestions and
confidence in me.
Their contributions show in many suitable ways and were indeed instrumental in
achieving the final results. Last but not the least I am indebted to all those who
remained behind the scene but without their help this project would not have been
palpable.
Debi Prasad Patra
1201247159
PGDM: 2012-14
RCM (A), Bhubaneswar
Page | 4
Executive Summary
The topic, “CREDIT APPRAISAL PROCESS OF MAHINDRA FINANCE”
demanded an elaborate study of the presently followed credit appraisal process of
Mahindra Finance, make suggestions regarding betterment of the whole system if
any, and finally base all the above on solid research work.
I first tracked down the Credit Appraisal Process of Mahindra Finance.
I also took a sample size of 20 and asked them regarding the various factors
responsible for their perception towards a loan provider and suggestions for
improvement.
I tabulated all the data, analyzed them using IBM SPSS v20.0 and finally made the
interpretation of the observation.
At the end, I made some of my own suggestions.
Page | 5
List of Illustrations
1) Table 1: Timeline of Important Events of MMFSL………………………..08
2) Table 2: Complaint Redressal System……………………………………..34
3) Table 3: Factor Analysis- Total Variance Explained………………………69
4) Figure 1: Research Methodology…………………………………………..12
5) Figure 2: Protection Products………………………………………………15
6) Figure 3: Investment Products……………………………………………...16
Page | 6
Page | 7
1.1 Company Profile
Mahindra & Mahindra Financial Services Ltd. was incorporated on 1 January 1991
as Maxi Motors Financial Services Limited and received certificate of
commencement of business on 19 February 1991. Its name was changed to
Mahindra & Mahindra Financial Services Limited on 3 November 1992. MMFSL
is registered with the Reserve Bank of India as an NBFC.
Two decades ago, Mahindra and Mahindra Financial Services Limited (MMFSL)
commenced its journey in the rural non-banking finance industry. And with that
was born a vision to transform rural and semi-urban India into a self-reliant,
flourishing landscape. Since then, MMFSL have come a long way, empowering
millions of ambitious individuals with personalised finance for a wide range of
vehicles, home development requirements and many other diverse endeavours – all
to help them live their dreams and Rise in life.
At Mahindra Finance, they are guided by a firm belief in people, their dreams, and
their potential to achieve those dreams. Hence, their socially inclusive business
model facilitates loans to customers based not on their current financial status, but
their future earning capacity. This philosophy has instilled a sense of confidence in
the minds of rural and semi-urban India – a confidence that allows them to believe
that no dream is too big. Today, as one of the leading non-banking finance
companies, MMFSL is proud to have touched over 2 million such lives.
During the course of its journey, apart from emerging as the top tractor financer in
India, MMFSL has constantly strived towards developing skill sets of the local
Page | 8
population. Which is why, it provides employment to over 13,000 people at over
650 branches across India. This not only ensures equal growth opportunity for all,
but also enables MMFSL to serve its customers better through local understanding
and expertise.
So, be it a humble farmer or a budding entrepreneur – MMFSL is committed to
empower every individual with resources to help their dreams see the light of day.
The Timeline of Important events at MMFSL
Year Events
1993 Commenced financing of M&M UVs
1995 First branch opened outside Mumbai, at Jaipur
1996
Commenced financing M&M dealers for purchase of Tractors
1998 Launched pilot project for retail tractor financing
1999 Commenced tractor retail financing in rural and semi-urban areas
2001 Total Assets crossed INR 10 billion
2002
Commenced financing of non-M&M vehicles and received Tier II debt
from International Finance
2004
Long term credit rating of AA+/Stable by CRISIL
Listing of non-convertible debentures on BSE on the wholesale
2005
Tie-up with HPCL
MIBL became wholly owned subsidiary
Commenced distribution of third party mutual funds
Page | 9
2006
A successful IPO, subscribed nearly 27 times more, tied up with Maruti
Udyog Limited ;Benchmark with 400 branches.
2007
Entered Commenced Home Loans Business through a subsidiary
Mahindra Rural Housing Finance Limited
2008
Received 12.5% equity participation from NHB for Subsidiary
Mahindra Rural Housing
2009
Launch of Fixed Deposits Program
2010 Loan against Gold launched in Kerala
2011 Crossed the benchmark of Rs.100 billion in Total Assets
2012 Crossed the benchmark of financing more than 2 million customers
Table 1
Products
Mahindra & Mahindra Financial Services Limited (MMFSL) is an India-based,
non-banking finance company. MMFSL?s product portfolio, providing the services
include vehicle loans (utility vehicles, commercial vehicles, tractors, cars, two-
wheelers and used vehicles); refinancing; housing finance; SME financing;
personal loans; fixed deposits; mutual fund distribution; insurance broking; loan
against gold, and construction equipment loan. It is a subsidiary of Mahindra &
Mahindra Limited (M&M). The Company has operations at 600 branches across
India. Its vehicle financing include auto and utility vehicles, tractors, cars,
commercial vehicles, two wheelers, three wheelers and construction equipment. Its
pre-owned vehicle financing include pre-owned cars, commercial vehicles and
tractors. Its insurance broking include insurance solutions to retail customers, as
well as corporations through its subsidiary Mahindra Insurance Brokers Ltd.
(MIBL).
Page | 10
1.2 Objectives of the Study
After being assigned to MMFSL for my Summer Internship Project, I sat down
with my Internal Faculty Guide and he suggested me to do my SIP on “Credit
Appraisal Process of Mahindra Finance”. When I expressed my interests to my
External Project Mentor at MMFSL, he agreed upon it and gave his word for
complete cooperation.
Here are the Objectives of my Project,
1. To learn as much as I could about Credit Appraisal Process.
2. To Study the existing Credit Appraisal System of MMFSL.
3. To provide the best tailored and quality Loan for the Customers.
4. To ensure Compliance with regulations and Fair Practice Code Policy.
5. To keep the goodwill of the Consumer.
6. To ensure that the Level of risk is Acceptable.
Page | 11
1.3 Scope of the Study
The topic selected is, “The credit appraisal system with respect to Mahindra
Finance”.
This means, how the employees in Mahindra Finance appraise individual?s and the
corporate firms? lending process and how the whole process is carried forward like
an integrated system, keeping certain aspects like risk, legality into concern.
The scope lays in Mahindra Finance, its potential borrowers, which is tailor made
at times to meet the client need and help with all the services the Mahindra Finance
can deliver in order to meet its goals and objectives.
Page | 12
1.4 Methodology
After being assigned to Mahindra Finance Ltd., for my SIP, I sat down with both
my internal faculty guide and external company guide to finalize a topic for the
same. We mutually agreed on doing the project on, “Credit Appraisal Process of
Mahindra Finance” and after a set of discussions we finalized on the following
research methodology to guide the progress of my assignment.
Here is a graphical layout of my Research Methodology,
Figure 1
Defining The
Objectives
Extensive
Literature
Survey
Preparing The
Research
design
Collecting Data
Analysis of
Data
Interpretation
of Findings
Preparation of
The Report
Presentation of
The Report
Finish
Page | 13
1.5 Limitations of the Study
During the course of my project, everything did not go the way I planned and
expected, for I faced certain obstacles. Some of these obstacles are stated below,
? As the information regarding the whereabouts of MMFSL?s customers is
confidential and could not be presented to third party, data regarding the
experience of customers and their suggestions for improvement could not be
retrieved.
? Lack of proper and sufficient data was the major problem in completing this
project.
? During collection of primary data, a lot of respondents did not agree to share
their experience. This did not only compel me to contact more people than my
sample size but also forced me to extend my time for data collection.
? The short duration of the project also stopped me from running a few more
errands that could have been beneficial to my research.
Page | 14
Page | 15
2.1 Products’ Profile
MMFSL is currently providing 3 categories of products.
A. Protection Products
B. Investment Products
C. Loan Products
All these three products are explained briefly.
A. Protection Products
Figure 2
Insurance
Individual
Insurance
Motor Insurance
Health Insurance
Travel Insurance
Home Insurance
Personal Accident
Insurance
Corporate
Insurance
Group Mediclaim
Policy
Group Personal
Accident Policy
Fire and Marine
Insurance
Office Package
Insurance
Reinsurance
Page | 16
The Features are,
? One-stop shop for all insurance requirements (Life & General)
? Superior negotiating skills through functional and technical competency
? Professionally qualified team to handle your portfolio
? Optimized premium outgo
? Most comprehensive coverage with best rates
? Documents and claims managed in the most professional manner
? Provision for technical discussions with the surveyor and insurer regarding
admissibility and quantum of claims
? Strong distribution network through our pan-India presence
? Regular updates on the insurance
B. Investment Products
MMFSL currently has 3 categories of Investment Products under its portfolio.
Figure 3
Investment Products
Fixed Deposits Mutual Funds Bonds
Page | 17
a. Fixed Deposits
In these uncertain times, one can get the most of one?s hard-earned money without
the risk of losing it. It?s wise to invest money in MMFSL?s Fixed Deposit schemes
that offer highly competitive interest rates and help it grow consistently over a
period of time.
Features Include,
? The MMFSL Fixed Deposit has a CRISIL rating of „FAAA?, which
indicates a high level of safety
? Cumulative as well as non-cumulative options available
? 0.25% additional rate for senior citizens
? 0.35% additional interest for all Mahindra group company employees
b. Mutual Funds
In today?s time, we all realize the need to move from just „saving? to „investing?
our money in the right areas. It?s only then that we help our money to achieve its
potential for growth. And mutual funds are where your money can really flourish
and easily beat the inflation. At Mahindra Finance, they recognize this opportunity
and have designed various schemes to help you invest your money and gain the
most from it.
MMFSL?s Mutual Fund Distribution team started its operation in September 2005,
and since then, has spread widely across the Southern, Western and Northern states
of India. The entire effort here is to provide you with end-to-end solutions to help
Page | 18
you achieve your financial objectives in a hassle-free manner. When it comes to
investing, we understand that everyone has unique needs based on their own
financial objectives and risk profiles. And while many investment avenues are
open to investors, it is usually seen that in the longer run, equities typically
outperform the others. Which is why, we believe that systematic investment in
equity has the potential to help your money reap maximum returns and in turn,
create more wealth for you in a shorter span of time. However, investing in equity
requires thorough understanding of the market and its myriad complexities. This is
where we step in with our expertise. Our advisors carefully understand your
investment objectives and risk appetite. They accordingly help you allocate your
money in schemes that are best suited for your unique needs. This way, you can
hang up your boots, lie back and watch your money do all the hard work.
Features Include,
? Equity Mutual Funds: Predominantly investing in equity and equity-related
instruments (Diversified)
? Sector Funds: Technically called Thematic Funds, investing in particular
sectors
? Index Funds: Investing in BSE listed stocks, managing the funds passively
? Fund of funds: Investing in the best performing mutual funds
? Tax Saver Mutual Funds: Section 80 C benefits, where the invested amount
is locked for three years
? Debt Mutual Funds: Investing in government-related instruments
? Monthly Income Plans: Where the monthly dividend is paid back to the
investor
? Liquid Funds: Investing in money market funds with high liquidity
Page | 19
? Floating Rate Short term Funds: Invests in debt securities, money market
instruments & floating rate instruments with maturity profile of three months
and up to 2 years
? Gilt Funds: Investing in government-related securities
? Fixed Maturity Plans: Fixed returns up to the maturity period
? Gold Exchange Traded Funds: Predominantly investing in gold commodity
stocks
? New Fund Offers: The new funds launched by Fund Houses at a face value
of Rs.10
The Loan product details are explained in detail in the next segment of this chapter.
Page | 20
2.2 Loan products
Loan Products at MMFSL has been divided into 4 categories:-
A. Vehicle Loan
B. Personal Loan
C. Home Loan
D. SME Loan
A. Vehicle Loan
Vehicle Loan at MMFSL has 7 Variants.
a. Tractor Loan
? MMFSL caters to all segments of customers owning a tractor or planning
to own one.
? Repayment based on cash flows i.e. monthly/quarterly and half yearly
(asset becomes loan free in five years)
? Quick disbursal within two days after loan approval
? Available for a wide range of tractors
? Stress-free loan sanction without mortgaging of land
? Easy and flexible documentation
b. Utility Vehicle Loan
? Individual between 21 to 58 years of age.
? Flexible repayment options ranging from 12 to 60 months
Page | 21
? Fast loan disbursement within 48 hours
? Competitive rates of interest
? Hassle-free documentation
? Pay online and through direct debit
? Enjoy a repayment period of up to 5 years
c. Car Loan
? A car loan from Mahindra Finance can be taken by all salaried and self-
employed persons, including farmers and traders as well.
? Minimum documentation to ensure a hassle-free process
? Quick car loan approval
? Up to 100% ex-showroom funding
? Multiple repayment options
d. Three Wheeler Loan
? Individual between 21 to 58 years of age.
? We cover the widest range of three-wheelers in India
? Flexible repayment options, ranging from 12 to 36 months
? Loan sanctioned within 48 hours
? Enjoy hassle-free documentation
? Multiple plans customized to match your needs
? Competitive rates of interest
Page | 22
e. Commercial Vehicle Loan
? For new CVs
o Any individual/partnership firm/Public Ltd. And Pvt. Ltd.
Company.
? For old CVs
o Any individual/partnership firm/funding extended to first time
users as well as transporters.
? The rate of interest for the loan depends on various factors like customer
profiles and location.
? A commercial vehicle loan can be taken for a variety of commercial
vehicles, which may be used at different locations. The loan is applicable
to customers with diverse profiles.
? For new CVs
o Fast processing
o Greater flexibility
o Maximum tenure of 60 months
o Competitive rates
o Customized financing
? For old CVs
o Finance against vehicles that are up to 15 years old
o Maximum tenure of up to 3 years
o Maximum finance flexibility
Page | 23
f. Two Wheeler Loan
? Individual between 21 to 58 years of age
? Quick and efficient loan approval
? Special 0.5% rebate for women customers
? Maximum funding of up to 80% on LTV
? Flexible repayment option, ranging from 12 to 36 months
? Loan insurance available
g. Used Vehicle Loan
? Individuals looking to buy a second-hand vehicle
? Individuals keen on a re-loan against a four wheeler
? Used vehicle loans available for vehicles up to 10 years old
? Lower rates of interest as compared to other unsecured loans
? Maximum flexibility
? Speedy loan disbursements
B. Personal Loan
Personal Loan at MMFSL has 2 variants
a. Personal Loan
? The personal loan is available for existing Mahindra Finance customers
and Mahindra Group employees only.
? For existing Mahindra Finance customers:
? A good repayment track record is mandatory
Page | 24
? For Mahindra Group employees:
? All confirmed employees of M&M Ltd., or any of its subsidiary
companies
? Should have completed at least two years of service with the organization
? Should be between 21 to 58 years of age
? Instant personal loan approval and disbursement in 2 days
? Loans of up to Rs. 3 lakh
? Hassle-free documentation with maximum flexibility
? Maximum loan tenure of up to 3 years*
? Easy EMI payment option through cheque, ECS, mobile transfer or cash
at the branch
b. Gold Loan
? The individual should own gold jewelry and fulfill the KYC norms as per
RBI guidelines.
? Get a gold loan of up to Rs. 10,00,000/-
? Repay only by servicing regular interest on the loan/EMI repayment
option available on request
? Enjoy assured security of your gold jewelry
? Loan tenure is of 1 week to 3 years
C. Home Loan
? MRHFL will consider the applicant/co-applicant?s:
o Income
Page | 25
o Age
o Employment stability
o Regularity and consistency of income
o Savings
o Family background
o Assets and liabilities
o Other factors that are likely to affect loan repayment
? Wide network across the country to ensure you have no trouble reaching
us
? Personalized documentation assistance for smooth processing
? Flexible repayment options
? Door-to-door servicing to ensure maximum convenience
? Loan available for various purposes – construction, renovation,
improvement and purchase
? Fixed and variable rates of interest subject to conditions
D. SME Loan
SME loans are offered to companies/partnership firms in select sectors like
automobiles, auto-ancillary and food and agri-processing. The company/firm
must be in business for at least 3 years with profit in the last audited financial
year. Greenfield projects can be considered only from established players in
that business. Dealer inventory funding loans can be considered for established
dealers of reputed automobile OEMs.
MMFSL?s SME Loan has 9 variants.
Page | 26
a. Project Finance
? Finance amount: Up to Rs. 40 crore
? Margin requirement: Depends on customer profile
? Tenure: Up to 6 years
? Security: Normally asset cover of 1.5 times
b. Equipment Finance
? Finance amount: Up to Rs. 25 crore
? Margin requirement: Flexible
? Tenure: 6 months to 5 years
? Security: Normally asset cover of 1.5 times
c. Corporate Loans
? Finance amount: Up to Rs. 25 crore
? Tenure: 1 year to 5 years
? Security: Normally asset cover of 1.5 times
d. Secured Business Loans
? Finance amount: Based on valuation of property
? Security: Normally asset cover of 1.5 to 2 times
? Tenure: Up to 7 years linked to business cycle
e. Working Capital Loans
Page | 27
f. Bill Discounting
? Finance amount: Up to Rs. 10 crore
? Validity: Up to 12 months
g. Lease Rental Discounting
? Finance amount: Up to Rs. 25 crore
? Tenure: Up to 6 years
? Security: Mortgage of the property under lease
h. Financial Advisory
? Advice Given on:
o Loan structuring
o Cash position improvement and interest cost reduction
o Government?s incentives available for the sector
i. Insurance Solutions
? Advice Given on:
o Insurance cost reduction
o Insurance cover optimization
o Insurance features fitment
Page | 28
2.3 Credit Appraisal Process
During my research at Mahindra finance, I noticed that Mahindra finance always
follows a specific procedure for approving loans, irrespective of their variant.
I also observed the whole procedure very carefully and realized that it could be
decomposed into 8 basic steps. They are:-
1) Interest shown by potential customers
2) Briefing by Mahindra Finance
3) Filling up of form
4) Submission of documents required
5) Verificaton of documents
6) Recording deviations
7) Deviation Approval
8) Loan Approval
Now, I am going to briefly describe each of the above 8 steps involved in the
Credit Appraisal Process of Mahindra Finance.
1) Interest Shown by Potential Customers
Whenever a person desires to buy a vehicle he/she approaches a dealer. After
Selecting the Vehicle, the on road price is being evaluated. If the person opts for
financial assistance and Mahindra finance in particular, he/she becomes a potential
customer to Mahindra finance .The dealer makes arrangements for a meet of
between the customers and Mahindra Finance.
2) Briefing by Mahindra Finance
Page | 29
When the customer agrees to take loan from Mahindra Finance, the MMFSL agent
briefly talks about the terms & conditions of Mahindra Finance for availing the
Loan.
3) Filling up of form
After all the discussions have been completed and the person has agreed to take
loan from Mahindra Finance, he is given a loan application form to fill up.
4) Submission of documents required
For submission of the form, what are the documents required, the agent tells to the
person, applying for the Loan.
There are 5 types of documents required to submit the form for loan:-
? Co-hirer documents: Identity Proof, Residence Proof, Photo with Front
attested, Income Proof, Bank Statement Mention Last 6 Months, PDC- Post
Dated Cheques, Signature Verification and CIBIL Score and LTV (Loan to
Value).
? CIBIL (Credit Information Bureau of India Limited): CIBIL is India?s first
Credit Information Company (CIC) founded in August 2000. CIBIL collects
and maintains records of an individual?s payments pertaining to loans and
credit cards. These records are submitted to CIBIL by banks and credit
institutions, on a monthly basis.
? CIBIL Score: The CIBIL Score is a 3 digit numeric summary of one?s
credit history which indicates the financial & credit health. The Score is
derived from credit history as detailed in the Credit Information Report
[CIR] and ranges from 300 to 900 points. Credit score tells the lender
Page | 30
how likely you are to pay back loan or credit card dues based on past
repayment behavior.
? Guarantor Document
? Co-hirer Document
? Office Documents: Agreement Duly Sign, Offer Letter, IRR Sheet (Internal
rate of return sheet), MLS (Multiple Listing Services) Form, Vehicle
Scheme, Field Investigation Report, Route Map, Proposal Form, Sanction
Letter, Post Tele-verification.
? Dealer Documents: Invoice, Sales Certificate, Delivery Challan, Chassis
Print, Duplicate Key, Dealer Recommendation sheet, Balance Of Payment
Case, IHM Receipt(Both dealer & Mahindra Finance), Insurance Policy,
Welcome Letter, Tax Challan, RC Copy and Certificate.
5) Verification of documents
After submission of all the documents, the agent verifies all the documents for
address, Identity proof, electricity bills, annual income etc.
6) Recording deviations
If the applicant fails to fulfill any of the requirements, it is recorded as deviation
from the usual requirement. All such deviations are recorded duly, without any fail.
7) Deviation approval
If MMFSL believes that one or some of the deviations are acceptable under the
circumstances and a deviation approval letter is being given by the Mahindra
Finance.
8) Loan Approval
Page | 31
After all the process has been completed and MMFSL finds that the person
applying for the Loan is actually eligible for it, the Loan is sanctioned.
Applications for Loan & their processing
Customers, who have evinced interest in availing the loan from MMFSL should fill
up the loan application form, complete in all aspects and should submit the same to
the Company?s nearest branch.
The application so received will be acknowledged by the Company immediately on
submission and will be processed for sanction of the loan. The Company will
consider all the documents submitted and the information provided, verify the
creditworthiness of the customer and evaluate the proposal at its sole discretion
and will grant loan by issuing a sanction letter within 10 days from the date of
receipt of the loan application and if no communication is received by the
customer, the loan application is deemed to have been rejected and the Company
will not send any communication for rejected cases. Sanction letter in the
vernacular language is to be issued to all borrowers whose loan have been
sanctioned after due diligence.
The fair practice code: compliant to the RBI circular: DNBS.CC.PD.No.
320/03.10.01/2012-13 dated February 18, 2013 is given as follows.
Loan Appraisal and Terms & Conditions
The sanction letter in the vernacular language would convey the following:
? Amount financed
? Documents to be submitted for disbursement of the loan
Page | 32
? The rate of interest
? Details of security to be offered
? Repayment schedule
? Penal interest or delayed payment charges (in case of delay in payments of
installments beyond due dates)
? Documents to be executed by the guarantor and co-borrower for
disbursement of loan.
Copy of the sanction letter will have to be accepted. The customer will have to
return to the Company a copy of the sanction letter duly acknowledged by him as a
token of acceptance. Thereafter Company will issue D.O. / cheque in favor of the
dealer or customer as the case may be.
Though the existing loan agreement provides a clause for the delayed payment
charges, the same is not in bold letters as suggested. Going forward, all loan
agreements will mention this clause in bold letters.
Disbursement of Loans, including changes in terms & conditions
Any change in terms of Conditions like change in interest rate, tenure, all
charges/fees would be communicated to the borrower in writing in the vernacular
language. Any decision to recall, accelerate payment would be communicated to
the borrower in writing as per the terms of the agreement. NOC is to be issued on
recovery of all dues. Collateral, if any, will be released along with the NOC. Any
collateral taken to guarantee the performance of contract will be duly
acknowledged and kept in safe custody. Cross holding of securities will be duly
communicated in writing vide RPAD giving reference of balance exposure in other
contracts. Company will take recourse / actions only through legally permissible
Page | 33
remedies as per the terms & conditions of loan agreement entered into with the
borrower.
Only written request from customers for transfer of liabilities will be evaluated by
the company and written confirmation / rejection will be intimated to the customer
within 21 days of after due diligence. Any agency to which various activities are
outsourced/ entrusted will have to be short listed and empanelled as per the
company policies issued from time to time. The Company has an exclusive
recovery team who are specialized in handling collection activity in a professional
manner by adopting a due legal process as per the law of the land. Since it is a
specialized function, the quality is addressed at the recruitment level itself.
Grievance Redressal Mechanism
In case of any complaint / grievance, the customer can make his complaint through
any of the following modes:
? Website: Email ([email protected])
? Customer Walk-in at Branch
In case customer chooses to log his complaint through either of website and email,
an email / SMS will be sent to the customer, acknowledging his complaint and also
informing about his complaint number and expected time of resolution. These
complaints will be received by a Nodal Customer Care Executive (through a
complaint tracking module) at our Head Office in Mumbai. These complaints
would be then referred to respective location and function for resolution. In case
customer chooses to log his complaint at the branch he would be requested to give
complaint in writing, In case customer is not able to write then, the branch
accountant will fill his details filled in a complaint sheet and provide him his
Page | 34
unique complaint number, with expected time of resolution. These complaints will
be regularly monitored by Nodal Customer Care executive to ensure effective
resolution and escalation. The company will not only ensure that all the complaints
received are recorded and resolved, but also ensure effective monitoring /
escalation mechanism to the senior levels responsible so as to ensure that none of
the complaints remain unresolved.
All disputes arising out of the decisions of branches in relation to the products and
services shall be heard and disposed of at least at the next higher level. Therefore,
the following „Grievances Redressal Mechanism? is put in place.
Complaint Level Redressal Level
Branch Level Territory Level
Territory Level Regional Level
Regional Level Zonal Level
Zonal Level Head Office Level
Table 2
Post resolution of the complaint, the customer will get a mail / SMS confirming the
resolution of the complaint. At this point customer has to confirm whether the
complaint has been resolved to his satisfaction or not. The complaint will be
deemed closed if customer does not respond to mail / SMS.
At all branches of the company, prominent display boards will be put up informing
them, about the Grievance Redressal Officer [including the name and contact
details (Telephone / Mobile nos. and also e-mail address) (Branch Accountant)
Page | 35
responsible for logging and resolving at the branch. Also detailed information
(including contact details) will be mentioned on how to escalate the matter, in case
customer finds resolution inadequate. If the complaint / dispute are not redressed
within a period of one month, the customer may appeal to the General Manager,
Reserve Bank of India, DNBS Mumbai Regional Office.
Reserve Bank of India vide its notification No. DNBS. 204 / CGM (ASR)-2009
dated January 2, 2009 and vide its Guidelines on FPC for NBFCs
DNBS.CC.PD.No.266/03.10.01/2011-12 dated March 26, 2012 have directed all
NBFCs to
? Communicate the annualized rate of interest to the borrower along with the
approach for gradation of risk and rationale for charging different rates of
interest to different categories of borrowers.
? Make available the rates of interest and the approach for gradation of risks
on the web-site of the companies.
Rate of interest
The Company intimates the borrower, the loan amount and rate of interest at the
time of sanction of the loan along with the tenure and amount of the monthly
installment.
Approach for gradation of risk
The rate of interest is arrived at based on the weighted average cost of funds,
administrative costs, risk premium and profit margin. The decision to give a loan
and the interest rate applicable to each loan account is assessed on a case to case
basis, based on multiple parameters such as the type of asset being financed,
Page | 36
borrower profile and repayment capacity, borrower?s other financial commitments,
past repayment track record if any, the security for the loan as represented by the
underlying assets, loan to value ratio, mode of payment, tenure of the loan,
geography (location) of the borrower, end use of the asset etc. Such information is
collated based on borrower inputs and field inspection by the company officials.
The rates of interest are subject to change as the situation warrants and are subject
to the discretion of the management on a case to case basis.
Repossession of vehicles financed
The Company adopts due legal process as detailed below for repossession of
vehicles financed
? Termination of the contract
? Recall of the loan for all NPA cases
? Invocation of arbitration clause and appointment of arbitrator
? Filing statement of claim (S.O.C.) along with details of the agreement,
invoice, asset with a prayer seeking interim relief of repossession of the
vehicle before the arbitrator
? Arbitrator to send the S.O.C. to the respondents and intimate the date of
hearing
? Seeking permission for interim relief of repossession on the date fixed for
hearing
? Appointment of Receiver by the Arbitrator to repossess the vehicle
? After obtaining the interim order, informing concerned police station having
jurisdiction about the repossession order along with the copy of the order
? Repossession of the vehicle with repossession order
Page | 37
Lending against collateral of gold jewelry
The Company has put in place a Draft policy for lending against gold. Please refer
our Draft Policy on 'Lending against collateral of gold jewelry'
Policy note for "loan against gold"
? Product
? Target Customer segment
? Purposes
? Quantum of finance
? Tenure
? Interest and charges
? Penal interest
? Documentation
? Ownership of gold
? Release of Jewelry
? Spurious Gold Inflow
? Staff Training
? Branch Holiday
Product:
To provide short tenure loans to the customers against gold jewelry as collateral
Target Customer segment
Any individual, who owns gold jewelry and fulfills the KYC norms as per RBI
guidelines, is the target customer.
Page | 38
Purposes
The loan can be extended for one or more of the following purposes:
? Agriculture
? Education
? Marriage expenses
? Personal needs
? Business purposes
? Medical needs
? Loan will not be extended for speculative & illegal purposes
Quantum of finance
? Minimum amount per pledge: Rs. 1000/- (one thousand rupees only)
? Maximum amount per pledge: Rs. 10,00,000/- (Ten lakh rupees only)
? Above Rs. 5 lakhs loan - Field Investigation of the customer will be
mandatory
Branch is to maintain LTV ratio 60% on a portfolio basis as per RBI guidelines.
Quantum and purity of gold, that can be pledged and deductions to be considered.
The minimum net weight of gold than can be considered for pledge is 1 gram. The
weight of stones, pearl, coral or any other foreign material contained in the
ornament shall be deducted to arrive at the net weight.
? Min Tenure: 7 Days
? Max Tenure: 365 Days
Page | 39
Upon maturity of the loan, the pledge may be renewed at the request of the
borrower, and subject to the discretion of MMFSL.
Interest and charges
Interest and other charges to be charged upon the loan shall be as per the schemes
circulated from time to time. The interest rates are decided based on gradation of
risk policy. The interest shall be calculated for the number of days the loan remains
outstanding, including the date of loan disbursement and the date of repayment.
However, if the borrower closes the loan within 7 days from the date of
disbursement, then a minimum interest for 7 days shall be payable. The interest
shall be payable by the borrower at intervals of 30 days from the date of pledge. A
grace period up to 3 days may be allowed in payment of interest without penal
charges, at the discretion of the branch.
Penal interest
In the event for failure of the borrower to pay the interest at the specified interval
or within the grace period permitted, maximum penal interest @ 3% per month
shall be charged on the interest thus due and payable. The interest on the loan
amount shall be payable by the borrower every month.
Documentation
Any one or more of the following KYC Documents
Identity Proof: Passport/PAN/Driving License/Voter ID card/Ration Card/any
other identity card issued by a government authority, PSU or nationalized bank,
containing the photograph of the customer. Address proof: If any of the documents
taken as identity proof also contains the address of the borrower, no separate
Page | 40
address proof is mandatory. In other cases, the following documents can be taken
towards address proof: Ration card/latest electricity/landline telephone bills/house
tax receipt/valid rent agreement/gas connection allotment letter/bank passbook or
any other documents issued by a government authority, PSU or nationalized bank,
containing the address of the customer.
Customers have to sign a declaration of ownership of jewelry.
Jewelry Handling
? Proper weight of the jewelry to be taken & to be appraised as per matrix
? Both customer & appraiser to signature on the measurement slip
? Jewelry to be packed securely along with the item & weight slip and kept in
the locker
? Individual packets to be prepared for each contract
? Purity check shall be conducted as per the matrix
Ownership of gold
Before disbursement, the branch executive will enquire customers about the
ownership of the jewelry being pledged for loan. The customer needs to give an
ownership declaration in the prescribed format.
Pricing
Gold price to be announced daily/weekly from HO, the same will have the system
validation. Any calculation on disbursement amount will be based on a system-
validated rate. All valuation of Gold/jewelry for disbursement will be based on the
Basic Gold purchase price announced from HO only.
Page | 41
Safety Measures
Utmost precaution is taken to ensure safety of the branch & the stocks. Security
measures to be taken as per company direction. Insurance coverage of all kinds of
risk including fidelity is must for all the branches.
Items not considered for Disbursement
? Melted bar/Primary Gold
? Coins
? Jewelry of a temple/church
? Top
Release of Jewelry
Jewelry shall be released to the same customer on receipt of full dues including the
principal, interest, penal interest and charges, if any. In case of part payment,
protonate jewelry wherever possible can be released. Any release whether partial
or full can be done after verification of original KYC documents & customer copy
of original pawn ticket.
Fraud Control
All kinds of fraudulent activities or attempt to fraud cases, whether it is by the
external or the internal reasons must be brought to the knowledge of the
management as soon as it is detected for proper action as per company guidelines.
Page | 42
Stock Auction
If the loan account is not settled/ renewed after the completion of tenure, company
would wait for the customer for six month tenure. Minimum three legal notices to
be sent to customer after expiry of the tenure with a gap of 15 days in each notice
prior to auction. The auction will be announced to the public by issue of
advertisements in at least 2 newspapers, one in vernacular language and another in
a national daily newspaper. Stock would be auctioned by the board approved third
party auctioneer. Mahindra Finance, its related entities and employees will not take
part as a purchaser of gold jewelry from the auction.
Due insurance coverage and security for stock transit would be ensured before
moving stock for auction. The proceeds of auction, net of auction related expenses
and incidental charges shall be adjusted against the loan account. Any shortfall
after such adjustment shall be recovered through legal action, and any excess shall
be refunded to the customer.
Staff Training
Training centers to be created at various locations to trained staff on purity,
security and operational excellence. The entire gold loan employees have to go
through the purity check and operational training as per company program.
Page | 43
Page | 44
3.1 Collection of Data
I decided to go for collecting both Primary Data and Secondary Data in my project
work.
Primary Data is the data collected for the very first time, whereas secondary data is
previously collected published or unpublished data.
3.1.1. Primary Data
As I did neither have the information about the present customers of Mahindra
Finance nor the details regarding the potential customers who have applied for a
loan at Mahindra Finance, the perception of existing customers towards the loan
products of MMFSL and the expectations of potential customers of MMFSL from
loan products could not be retrieved.
That?s exactly why I decided to go for collection of data that will help me
understand the perception and expectation of existing as well as potential
customers of loan products in general.
Thus, I prepared a questionnaire that will serve to my purpose.
A copy of the questionnaire is attached as Annexure I.
I also decided to go for a sample size of 20 due to time constraints and usually
found non-responsive nature of respondents. I went for Non Probabilistic and
Convenience Sampling.
After collection of the data, I used Nominal Scaling Technique and Ordinal Data
type for tabulating the data in MS Office Excel.
Page | 45
3.1.2 Secondary data
I also collected the data regarding the total number of loan applications put for the
year 2012-13 and for the month of May.
2012-13 Annual data
Average No. of Loans Applied – 12,000 (Approx.)
No. of Loans Sanctioned- 10,500 (Approx.)
No. of Loans rejected- 1,500 (Approx.)
The common reasons behind the most number of rejections are,
? If the Identity Proof doesn?t match the person.
? If the Residence Proof is faulty
o A person, who is a Permanent resident of one state, but applying for
a loan in another state, his/her loan application form will be rejected.
? If CIBIL Score is wrong.
? If the Field Investigation report is not fulfilled well.
Average time taken for sanctioning a Loan is 2 days, if all documents are genuine.
Data for the month of May
No. of Loans Applied -100
No. of Loans Sanctioned-95
No. of Loans Rejected-5
The reasons resemble the reasons stated above.
Average time taken for sanctioning a Loan is 2 days, if all documents are genuine.
Page | 46
Page | 47
4.1 Analysis of data
For analysis of primary data, I first tabulated all the collected primary data
conveniently in a MS Office Excel Spread Sheet using Nominal Scaling
Technique.
This helped me to convert all the qualitative data into quantitative data and the
process of analysis became easier.
Then I used IBM SPSS to analyze the primary data further using statistical analysis
tools.
As for analysis of secondary data, I used simple mathematical calculation to figure
out the success rate of loan approvals in MMFSL, Bhubaneswar and the trend of
growth.
Page | 48
4.1.1 Primary Data Analysis
I had an even distribution of Age Group and Monthly Income among the
respondents of my questionnaire. At some point, they have all applied for a Loan at
least once.
When asked about whether their loan has been approved or denied, this is the
response I got from the respondents.
The 75% loan has been approved of the respondents and another 25% loan has
been denied. This gives almost a success rate of 75% for approval of Loans.
Page | 49
When asked about the reason for which their loan was denied, this is what they had
to say,
20% of the respondents said that their loan has been rejected due to rejection of
application form, 20% due to low CIBIL Score, 40% due to non-compliance with
terms and conditions and another 20% due to not satisfying the Eligibility criteria.
This means that, Non-Compliance with the terms and conditions is the major
reason behind denial of Loans.
Page | 50
When asked to rate the various aspects of applying for and getting a loan approved,
based on their personal experience, here is what they had to say,
70% of the respondents rated “Response to Questions and Requests by staff” as
highly satisfactory, satisfactory and good. This means that the customers depend a
lot on this factor.
Page | 51
30% and 25% of the respondents agreed on rating the briefing of terms and
conditions process by the loan provider as good and satisfactory. This means, it has
a great influence over the borrower?s impression.
Page | 52
A total of 60% of the respondents rated their experience on briefing of the
Application process and guidance as highly satisfactory, satisfactory and good.
Page | 53
Mixed Response was received upon asking the question about the experience with
friendliness and helpfulness of the employees at Loan Provider?s Office.
Page | 54
When asked to rate the average time taken for the whole process, 20%, 15%, 25%,
20% and 20% of the respondents rated it as highly satisfactory, satisfactory, good,
dissatisfactory and highly dissatisfactory.
Page | 55
60% of respondents rated information available on official website of the loan
provider to be highly satisfactory, satisfactory and good.
Page | 56
The overall experience for 55% of the respondents has been highly satisfactory,
satisfactory and good.
Page | 57
Majority of the respondents agreed that the average time taken for approval of a
loan is from 2 to 7 days (around 55%).
Page | 58
30% of the respondents suggested that friends have influenced their decision the
most to take loan, whereas 30% are compelled by Agents. Rest 40% take their
decision either on their own or family.
Page | 59
There was an even distribution of responses when asked about the media through
which they come to know of the loan provider. However agents are the most
successful media here (25%).
Page | 60
When asked about the importance of past experience with the same loan provider,
65% of the respondents very important and important, other 35% said not
important.
Page | 61
Even distribution of the respondents commented that the interest rate is very
important and important.
Page | 62
20% of the respondents do not think that the service quality is important. But rest
80% still believes that it is either important or very important.
Page | 63
When asked about the Timeliness of the approval of the loan and the whole
process, 20% of the respondents said that it is not important. But rest of the 80%
still agrees that it is very important or simply important.
Page | 64
When asked about the importance of reputation of the loan provider, 40% of the
respondents suggested that reputation of the loan provider is very important and
20% suggested that it is not important, while 40% said that it is simply important.
Page | 65
50% of the respondents agreed that the briefing by agents is very important for
their decision regarding loan, followed by 35% who believe it to be just important.
Whereas, 15% of the respondents believe that it is not important.
Page | 66
When asked about based on their personal experience, would they recommend the
same loan provider to others, 75% of the respondents said yes. This shows a great
level of brand loyalty.
Page | 67
75% of the respondents agreed that they would again go for the same loan provider
if they will need to apply for another loan in future. This also proves that if all goes
well and the customer is satisfied with the service quality of the loan provider,
when the time comes he/she will go for the same loan provider.
Page | 68
4.1.2 Secondary Data Analysis
From the data collected above, I calculated the success rate for sanctioning of loans
both for the year 2012-13& for the month of May, 2013.
? Success rate For the Year 2012-13= 10500/12000×100=87.5%
? Success rate For the month of May= 95/100×100=95%
The income from loan for the financial year 2012 April to 2013 March is
Rs.3,40,079.74 Lacs.
The income from loan for the financial year 2011 April to 2012 March is
Rs.2,44,286.16 Lacs.
The income from loan of Mahindra finance for the financial year 2012 April to
2013 March is greater than the financial year 2011 April to 2012 March of the
amount Rs.95793.58.
In the above information it is well known that the company is increase the income
from year to year.
Page | 69
4.2 Factor Analysis
By using Factor Analysis through IBM SPSS, I have reduced the total 18 number
of factors responsible towards shaping a customer?s perception towards loan
products into 7 major identifiable factors. They are given below.
Table 3
1) Briefing of the terms and conditions along with transparency in the whole
appraisal process top our list of factors responsible for shaping a positive
perception towards loan products.
2) The next factor is the combination of briefing regarding the application
process and the average time taken in completion of the whole process with
approval of the loan.
3) The rate of interest and briefing by agents are the third most important
factors for the same.
4) Special concessions and considerations are the fourth most important factor
for a good perception towards loan segment.
Page | 70
5) Quality of service is the fifth most important factor.
6) Timeliness is the sixth most important factor.
7) Finally, courteous greeting is the seventh most important factor, responsible
towards shaping the perception of customers for loan providers and loan
products.
Page | 71
Page | 72
5.1 Findings
? The Project includes understanding of various credit facilities provided by the
Mahindra Finance, how a Loan proposal is made to the NBFC, what is the
formality to be kept in mind, terms and conditions to be satisfied and also the
credit appraisal techniques involved while appraising a loan proposal.
? There is a minimum document and credit parameters checklist which contains
the list of documents required for the loan consideration under different
products/schemes .It is Mandatory to produce these documents, else the loans
won?t be sanctioned.
? My learning from this Project was about how risks are faced by Mahindra
Finance and how they are mitigated. Mahindra Finance uses various tools in
which risk can be diversified thereby helping bank in making efficient
decisions.
? One more learning during internship is the way Mahindra Finance assigns a
credit rating for a company/party. The Mahindra Finance analyses risk and
assigns the various values? statements that are predesigned and assigns a credit
score. This helps in finalizing the price of the loan.
? Another important aspect of the credit appraisal is borrower?s ratings. Mahindra
Finance has an elaborate rating system that really helps in extending the loans
to the customers, considering the risk associated with them.
? The underlying assumptions that considered for the appraisal of the term loan
require proper assessment of risks. The increase in the risks in the future
periods of the project increases with the decrease in cash flow generated.
Page | 73
Page | 74
6.1 Suggestions
? Mahindra Finance must start by creating a NBFC environment for
entrepreneurship and build a new infrastructure for innovation through making
credit easily available in all the sectors of economy through Mahindra Finance.
? Mahindra Finance should provide easy credit with reasonable interest rates to
all citizens in every sector to remain as a competitor and play a positive role in
economic development.
? The Mahindra Finance should follow number of initiatives like providing loans
and credit to raise the standard of people and alleviate property income.
? The focus of this project is concentrations of credit risk; but management must
also efficiently manage other potential risk concentrations.
? Credit appraisal is the backbone of the NBFC?S. This is equally important and
dangerous, as chance of default or other risk is always there.
? The source of information collected for a better understanding of the credit
appraisal process is provided by the Mahindra Finance as well as the
observations made thereon.
Page | 75
6.2 Conclusion
During the course of the project I became up, close and personal with the credit
appraisal process of Mahindra Finance and realized the importance of credit
appraisal and risk management and how wonderfully all the steps involved should
be maintained in order to keep it a mutually beneficial affair.
This project did not only help me expanding the base of my knowledge but also
give me an excellent opportunity to acquaint myself with such an organization.
I believe my findings, suggestions and recommendation would be beneficial to
MMFSL.
Page | 76
Page | 77
Annexure I
“Credit Appraisal Process of Mahindra Finance”
Questionnaire
1. Name
2. Age Group
20-30 Years 30-40 Years 40-50 Years More than 50 Years
3. Monthly Income
Less than 15000 15000-30000 30000-45000 More than 45000
4. Have you ever applied for any loan?
Yes No
5. If yes, was it approved or denied?
Approved Denied
6. If denied, what was the reason?
Rejection of Application Form
Page | 78
Lack of submission of all documents
Low CIBIL Score
Non-compliance with terms and conditions
Not satisfying Eligibility Criteria
7. Based on your experience please rate the following.
Highly
Satisfac
tory
Satisfac
tory
Good
Dissatis
factory
Highly
Dissatis
factory
Courteous Greeting at First
Meet
Professionalism and
Knowledge of staffs
Response to Questions and
Requests
Briefing of the terms and
conditions
Briefing of the Application
Process
Transparency of the Appraisal
Process
Friendliness and Helpfulness
of Staffs
Time taken for the whole
Page | 79
process
Information on website of the
loan provider
Contact through Phone and
Overall Experience
8. What was the time taken for the approval of the loan?
Less than 2 days 2-4 days 4-7 days More than 7 days
9. Who influenced your decision the most?
Self Family Friends Agents
10. How did you come to know of the Loan Provider?
Advertisement Agents Family/Friends Website Others
11. Please rate the importance of the following factors.
Factors Very
Important
Important
Not
Important
Past experience with the Loan Provider
Interest Rate
Page | 80
Service Quality
Timeliness
Reputation of the Loan Provider
Briefing by Agents
Special concessions and considerations
12. Based on your experience, would you recommend others for the same Loan
Provider?
Yes No
13. Based on your experience, would you approach the same Loan Provider again?
Yes No
14. Do you have any other suggestions?
Thank You Very Much for your Co-operation.
Page | 81
Page | 82
Text Reference
? Kothari C.R., Research Methodology, 2
nd
Revised Edition, New Age
International Publishers.
? Mukherjee D.D., Credit Appraisal, Risk Analysis and Decision Making, 6
th
Revised Edition, Snow-white Publishers.
? Bhattacharya Hrishikesh, Banking Strategy, Credit Appraisal, and Lending
Decisions: A Risk-Return Framework, 2
nd
Edition, Oxford.
? Chattopadhyay Kamal, Understanding Credit Appraisal in Banks, Academic
Publishers.
Web Reference
? http://en.wikipedia.org/wiki/Credit_risk
? http://en.wikipedia.org/wiki/Credit_rating
? http://www.mahindrafinance.com/get-a-loan-overview.aspx
? http://www.mahindrafinance.com/fair-practice-code.aspx
? http://www.mahindrafinance.com/int-rates-grade-risk.aspx
doc_832522866.pdf