INTRODUCTION

India is one of the largest markets for gold and as of fiscal

2010, accounts for approximately 10% of the total world gold
stock with an annual demand of approximately 700 tonnes.
Several gold based financial products have been made
available to retail consumers in the Indian market from time to
time with a view to bring the gold holdings to the core financial
market.

Lending against gold has been one of the most popular

instruments based on gold, and it works well with the Indian
rural population, which typically views gold as an important
savings instrument that is liquid and can be into converted into
cash instantly to meet their urgent cash requirements.
Moreover, traditionally gold owners in southern India are more
open than elsewhere in the country to accept and exercise the
option of pledging gold to borrow money.
STATEMENT OF THE PROBLEM
One of the most discussed topics in the present competitive
gold loan market is about the best gold loan company. The two
stand out names in this context is Muthoot Finance Limited and
Manappuram General Finance and Leasing Ltd, Both companies
face a cut throat competition among each other to reach the
top position of this market. In order to maintain and increase
the market share both companies have to find out their
weakness and turn it into their strengths. Satisfied customers
are vital for the existence of the firms. This study aims to bring
out the reasons which make customers choose one company
over the other and enlist the best gold loan company in India.
REASONS FOR SELECTION OF THIS TOPIC
Muthoot Finance Limited is the largest gold financing company
in India in terms of loan portfolio (Source: IMaCS Industry
Report (2010 Update). Muthoot provides personal and business

loans secured by gold jewellery. They have a Systemically

Important Non-deposit taking NBFC headquartered in the
southern Indian state of Kerala. Our branch network as of
October 31, 2010 was 2,813 branches

Manappuram General Finance and Leasing Ltd or MAGFIL is a

non-banking
financial
company
(NBFCs)
situated
in
Valapad, Thrissur, Kerala state. Manappuram is the first NBFC
in India to get a short term rating of A1+ from ICRA (the highest
short term rating awarded to any corporate in India by ICRA)
and a long term rating of LA+ from ICRA. Manappuram has over
1,000 branches across 15 states, with a staff strength of over
6,500 people and a customer base of over 5,000
There have been many studies connected with the comparison
between two different organisations, but no significant efforts
has been made to study the gold loan provided by Muthoot
Finance and Manappuram Finance, the two top gold loan
financing companies in India. Until now a study on the gold loan
facilities offered by Muthoot and Manappuram has not
undertaken. The present study seeks to fill up the gap and is
likely to open further detail for probe in this regards.
LEARNING FROM THE STUDY
This study will help to identify the best gold loan provider and
the reasons which make it stand out from its competitors. The
comparative analysis will also help to recognize the important
features which a customer looks into while choosing a gold loan
plan. And as for the other players in the market, this study will
enable them to be acquainted with their weaknesses and strive
to improve those features in which they lag behind the top
player.

ORGANISATIONAL PROFILE
INDUSTRIAL PROFILE

OVERVIEW OF THE INDIAN ECONOMY

India is the fifth largest economy in the world after the
European Union, the United States, China and Japan with an
estimated GDP of approximately US$3.56 trillion in 2009, on
purchasing power parity ("PPP") basis. India is also one of the
fastest growing economies in the world. According to the
Central Statistical Organization, India's GDP grew at a rate of
7.4% in fiscal 2010.
According to India Brand Equity Foundation, India is one of the
largest bullion markets in the world. India is also the largest
consumer of gold jewellery in the world (approximately 20% of
global gold consumption), and the largest importer of gold in
the world. Gold imports were approximately 739 tonnes in fiscal
2010.
OVERVIEW OF THE INDIAN CONSUMER CREDIT MARKET
The consumer credit market in India has undergone a
significant transformation over the last decade and experienced
rapid growth due to consumer credit becoming cheaper, more
widely available and increasingly a more acceptable avenue of
funding for consumers. The consumer credit market has
developed in India due to the following factors:
Increased focus by banks and financial institutions on
consumer credit resulting in a market shift towards regulated
lenders from unregulated moneylenders/financiers.

 Increasing trend of Indian consumers to acquire assets such

as cars, goods and houses on credit.
Fast emerging middle class
households in our target segment.

and

growing

number

of

Improved terms of credit as interest rates in India fall in line

with global interest rates.
Legislative changes that offer greater protection to lenders
against fraud and potential default increasing the incentive to
lend.
Growth in assignment and securitisation arrangements for
consumer loans has enabled non deposit based entities to
access wholesale funding and compete solely on their ability to
originate, underwrite and service consumer loans.
Credit availability, affordability and consumer confidence are
the key drivers for consumer loan growth. A variety of financial
intermediaries in the public and private sectors participate in
India's consumer lending sector, including the following:
Commercial banks.
Long-term lending institutions.
NBFCs, including housing finance companies.
Other specialized financial
financial institutions and

institutions

and

state-level

Lenders in the unorganized sector.

GOLD FINANCE INDUSTRY IN INDIA
The recent economic boom and crash has sent shock waves
throughout the economy, creating radical change in business
paradigms, consumer demands, and even in economic cultures
themselves. One of the greatest changes in the developing
world has been a change in the people's relationship with gold.
Since the days of the Roman Empire, gold has been seen as

both a designer luxury and an immense store of value, and

because of its portability and use as jewelry, gold has been a
traditional fashion and savings account for people in Eastern
Europe, India, and other foreign countries for a very long time.
But lately, old habits seem to be dying fairly easily. The
pawning of gold, which has for a long time been perceived as
shameful, is rapidly becoming an acceptable practice. In India,
for example, this long-held tradition is being replaced by gold
loan businesses, which offer personal and business loans with
gold as a security for lower interest rates than one would have
access to with an unsecured loan. Many of the borrowers are
women, who are now becoming more active members of
society and are looking for ways to finance things such as
holiday trips, children's educations, and down payments for
homes.
Private lenders in India are making a killing off of this new
trend. Once a very small industry, the gold loan business has
taken off and is now a booming trend in India. The business is
an easy way for people in impoverished areas to gain access to
quick credit. This is not to say that credit comes cheap; many of
these gold loan businesses charge interest at rates as high as
18%; higher than many of the credit cards we are familiar with.
While this may seem a bit harsh, this is still a great leap
forward both culturally and economically for people in the third
world. Historically, informal lending practices such as these are
the beginnings of developed credit markets in later stages of
development. This helps people like those in rural India gain
access to the credit that they need to begin building futures for
themselves and their children.

MANAPPURAM GENERAL FINANCE AND

LEASING LIMITED

With the Trust, Commitment and Transparency extending over

61 years, Manappuram Group has emerged as a force to reckon
with, under the stewardship of Mr. V.P. Nandakumar, the
Chairman of the company. Today with 9 companies under its
fold, having more than 1,950 branches spread over 19 States of
India and a total business over Rs. 70 Billion, a workforce of
over 14,500 and a customer base of over 5 Million, we
are India`s Largest Listed and Highest Credit rated Gold Loan
Company.
We are involved in providing a wide range of financial solutions
to our customers that will make their life easy.
The company was founded in 1949 by late Mr. V.C.
Padmanabhan, a great visionary of his times. The company
commenced its operations at Valapad, mainly with money
lending activity on a very modest scale. The principal asset of
the company was the impeccable integrity devotion and

foresight of its founder. The company soon established itself as

a safe haven for investments of the people of the area
providing absolute safety and assured returns. On the sad
demise of the founder in 1986, his illustrious son, Mr. V.P.
Nandakumar, the present Chairman took over the reins. Under
his dynamic leadership, the company never had to look back.
Mr. Nandakumar was working as an officer of the erstwhile
Nedungadi Bank, before he took over the captaincy of the
company. Known for his sharp business acumen and
professionalism, Mr. Nandakumar has been instrumental in
taking the organization to its present level. With an alert mind
and unconventional methods of problem solving, Mr.
Nandakumar has put this organization on the launching pad. He
believes that the future belongs to those who can
advantageously use the technology to serve the customers by
evolving customized products and services.
The Group`s flag-ship Company, Manappuram General Finance
and Leasing Limited (MAGFIL) was established in 1992 in the
wake of economic reforms launched by the Government of India
mainly to take advantage of the importance assigned to
Leasing as a vehicle to promote decentralized pattern of
Economic Growth through small and medium enterprises. In a
short span of time, MAGFIL had several Firsts.
First NBFC from Kerala to receive a Certificate of
Registration issued by RBI mainly on the strength of the
company`s ability to settle the depositors` claim in full.
First NBFC from Kerala to get a credit rating of "MA+" from
ICRA, (a credit rating agency approved by RBI) which
signifies the company`s ability to make timely repayment
of the principal and interest under its Public Deposit
Programme. Within a short span of time MAGFIL recorded
a phenomenal growth to become a premier NBFC from
South India.

It is the FIRST NBFC from Kerala to have received

Adequate Safety rating for its Secured Non- convertible
Redeemable Debenture issue for Rs. 50 million.

First NBFC from Kerala to go for public issue.

First NBFC from Kerala to issue bonus shares at the ratio
1:1.
First NBFC from
Investment (FDI).

Kerala

to

receive

Foreign

Direct

First NBFC from Kerala to receive AD- II (Authorised Dealer

- II) License from RBI.
First NBFC from Kerala to obtain Broker`s License from
IRDA (Insurance Regulatory & Development Authority).
First NBFC in the country to receive a Short-term rating of
A1+ by ICRA and P1+ by CRISIL. These are the Highest
Short Term Rating awarded by ICRA and CRISIL to any
Corporate in India and Long term rating of LA+ for its
working capital limit.
The shares of the company are listed in Mumbai, Chennai and
Cochin Stock Exchanges and are actively traded in BSE at levels
far above par.
In 1993, this Group set up Manappuram Benefit Fund Limited, a
NIDHI Company to provide specialized services to its members.
Today, it is one of the topmost Nidhi Companies in South India.
Manappuram Chits (I) Limited, a chit fund company registered
under the Chit Fund Act 1982, a central legislation enacted by
Government of India, was set up in the year 2000, where most
of the Chit Fund Companies in Kerala found it difficult to
conform to the discipline of this central legislation.
As a part of its diversification, the company also started Forex
business upon the Reserve Bank of India granting it a fullfledged money changers license in the year 2002.

The company also commenced in a big way for instant money

transfer facility, in collaboration with Xpress Money, Coinstar,
Instant Cash, Zoha, Ezremit and MoneyGram. Instant Money
Transfers being the fastest method of inward and outward
remittance of funds will be useful to NRIs for remitting money
to or from their relatives in India, who will be able to receive the
proceeds within a few minutes of remittance.
Whilst the company`s core activity continues to be Gold Loan, it
has entered very aggressively into fee-based activities
especially in the wake of opening up of insurance sector
allowing private participation. In November 2006, company
was awarded Broker`s License by IRDA to sell insurance. As an
Insurance broker, the company is able to offer its customers a
wide variety of products tailor-made to their requirements.
Thus the company has emerged as a one-stop financial Super
Market. In order to look after the fee-based activities
exclusively, the Group has promoted a separate company
called Manappuram Insurance Brokers Private Limited (MAIBRO)
as wholly owned subsidiary of MAGFIL, the flagship company of
the Group.
The Group has received ISO 9001-2000 certification in the year
1993 as a hallmark of its having attained the International
Quality Standards.
As a premier organization, the company has derived its
strength from the dedication of its highly motivated staff. Being
an organization with a vision, the company has recognized that
the best of investments are investment in people and has
accordingly assigned considerable importance in the matter of
training its staff. It is a matter of considerable pride that the
company has a full-fledge training establishment with very few
parallels in the NBFC sector, where in-house training courses
are conducted almost continuously in a very professional
manner for up gradation of the skills and for enhancement of
functional efficiency so as to make the organization a

"Customers` Delight". Every employee has been given very

clear idea of his role which enables them to function more
efficiently and produce better results.
The Group functions with a tremendous sense of social
responsibility. The setting of Manappuram Institute of
Management (MAINMA) in September, 2005 to be groomed into
a management institution of all India repute was dictated by
this social responsibility.
The Company has signed an agreement with M/s. Hudson
Equity Holdings Limited and Sequoia Capital India Investment
Holdings for preferential issue of compulsorily convertible
preferential shares of Rs.100/- each for Rs. 234 million each,
aggregating to Rs. 468 million to be converted into equity
shares later. When converted into equity, both these
investment companies together will be holding Rs. 4,667,284
(Rupees Four Million, Six Hundred and Sixty Seven Thousand,
Two Hundred and Eighty Four) equity shares of Rs. 10/- each at
a price of Rs. 100.272 constituting a maximum of 29.79% of
paid- up equity share capital of the company. These funds have
been raised for expanding our business in gold loan and vehicle
loan by opening of more branches across the country.
In November 2008, the company has also received capital
infusion of Rs. 1 Billion and 80 Million from UK and the USbased equity firms, with participation from its promoters. The
UK-based Ashmore Alchemy, a joint venture between Ashmore
and Alchemy has invested Rs. 320 million through its Mauritiusbased investment vehicle, AA Development Capital India Fund,
LLC.
Considering the increase in the size and volume of operations
of the company, we have appointed Earnest & Young, an
internationally reputed firm as our auditors.
The company`s vision in the short term is to emerge as a
strong national player, with a wide Branch network across the

entire country to serve its customers as a one-stop financial

super market that makes our customers` life easy.

GOLD LOAN - A BETTER DEBT OPTION

If you have gold jewellery to offer as collateral for personal loan,
procedural hassles are minimal and banks don't check your credit score.
The amount of documentation and the excessive verifications before
your personal loan gets processed can be a nightmare.
Here is where your jewels can lend a hand, specifically gold.
With the current interest rate fluctuations, opting for a jewel loan as
against a personal loan is more lucrative. Not only are your overall costs
reduced, this will save a lot of your time.
"One of the major advantages is that the loan is processed almost
immediately, within hours, even minutes at some of the NBFC viz.
MANAPPURAM FINANCE, with minimal documentation.
The Credit Information Bureau (India) Ltd scores which reflect an
individual's credit history are beginning to play an important role in
acquiring personal loans. However, a jewel loan requires no such score.
While the requisite documents for a jewel loan differ across lenders,
most normally require no more than a proof of income or address.
The clincher: the interest rates between a jewel loan and a personal loan
can differ by as much as 5-8 per cent for the same amount loaned.
Some lenders charge a nominal fee for processing and others a small
fee as closing charges. Co-operative banks require you to be a member,
charges for which, again, can be as low as Rs 5.

Jewel loans can be availed of at co-operative banks, public sector

banks, private sector banks and other private lenders. Some banks,
however, offer it only in certain regions, the only disadvantage.
While private lenders process the loan in less than a couple of hours,
some co-operative and public sector banks may take up to a day to
issue the loan. MANAPPURAM FINANCE

is exceptional in this

regard

maximum

as

it

serves

the

customer

with

amount at

minimum time i.e., less than 3 minutes.

In any case, the time is much less than the minimum three days of
processing time for a personal loan. Loan to value, or the maximum ratio
of a loan's size to the value of the asset, for a jewel loan is on par with
that of a personal loan.
The Reserve Bank of India has no strict policy on jewel loans.
In late 2007, the RBI had issued a notification which permitted bullet
repayment (a lump sum payment of the principal at maturity) of gold
loans.
Subject to specific guidelines from the apex bank, each bank may fix its
rate for gold, reflecting the market price at that point of time.
Care should be exercised if you have defaulted on a loan earlier, be it
personal or any other. Your jewels might not be returned at the end of
the loan tenure if you approach the same branch.
Approaching another branch or bank in this case would be one solution,
as they would not have any record of your default history.

A State Bank of India official, however, cautioned that some time in the
near future, they would start looking at Cibil scores before approving a
jewel loan.
The loan tenure is not uniform across banks. With private lenders like
HDFC Bank and some co-operative banks, the tenure is annual.
Non-banking financial companies like Manappuram Finance have a onemonth tenure. But, an advantage with monthly renewals is that the loan
value also increases every month with the appreciation of gold.
At SBI, the individual must repay some amount of the principal along
with the interest every month, as non-repayment for a continuous period
of three months will render the loan a non-performing asset.
Considering the advantage a jewel loan offers in terms of a rent-free
locker, a little bit of juggling can even help you save renting a locker for
your jewels! (Obtain a fixed deposit on the loan, which should work out
lesser than the rent charged on lockers.)
RAGHU.G, AGM, MANAPPURAM FINANCE

SERVICES
Gold Loan / Loan Against Gold
Welcome to India`s First Listed and Highest Credit Rated Gold
Loan Company, registered under Reserve Bank of India,
founded in 1949.

Loan against Gold Ornaments

Why go for Personal or Business loans when you have the
power

of

gold

with

you!

Get a loan against your gold, in minutes!

Loans up to One Crore rupees.

Draw instant Cash by pledging your Gold Ornaments and

Jewellery.

Higher loan amounts, depending on purity, net weight of

the gold.

Choose from a range of schemes; theres one just right for

your needs.

Highlights of Gold Loan

Minimum Requirements: Only one recent IDVoter ID/

Ration Card/ Driving License/ Passport. No time-consuming
formalities involved.

Pay interest only for the exact period of loan, and to the
exact number of days.

Different schemes for different needs, to suit all income

groups.

Operational Schemes
Scheme
Name

Tenure

GL D1

0 - 30 14%
days

14%

14%

31-60
days

18%

18%

18%

61-365
days

24%

24%

24%

0 - 30 18%
days

18%

18%

31-60

21%

21%

GL D2

Rate of Interest (p.a.)

In
Keral
a

21%

In
Karnataka, In
Tamilnadu
& Other
Andhrapradesh
States

days

GL B2

GL A2

GL A+

GL C1

61-365
days

24%

24%

24%

0-90
days

20%

21%

21%

91-180
days

22%

23%

23%

181-365 24%
days

24%

24%

0 - 90 19%
days

20%

20%

91-180
days

22%

22%

22%

181-365 24%
days

24%

24%

0-90
days

21%

22%

22%

91-365
days

24%

24%

24%

0-365
days

22%

24%

25%

Rebate in Gold loan Scheme:

In GL- C1 scheme Rebate @ 1% p.a. shall be provided if

account settled / paid interest before first 3 months of the
tenure.

In all other schemes mentioned above, the Customer can

continue on the initial interest rate, provided he/she is

regular in paying monthly interest.

Note:

Overdue interest is chargeable at 3% p.a. after 1 year

Compounding in all Schemes at monthly rest

General Terms and Conditions

1. Interest shall be payable at the rate specified as above
along with incidental charge as may be fixed by the
Company from time to time. When interest is not paid at
monthly intervals the interest shall be compounded as
mentioned above. Interest will be calculated on the basis
of 360 days a year on the amount outstanding. If the loan
is not repaid on demand within one year the Company
shall have the right to levy overdue interest @ 3% pa
after one year on the amount of loan plus interest in
default. Interest will be payable from the date of the loan
till the account is closed, both days inclusive.
2. The loan is based on the weight, purity of the Gold and
adjusted market value. A higher LTV (loan per gram) is
assessed by the Company as a greater risk as compared
to lower LTV because of which higher LTV loan attracts a
higher rate of interest.
3. The period of loan is one year and the Borrower is required
to repay the loan along with interest on or before one year
from the date of disbursement. However, the Borrower
shall have the option to foreclose the loan at any time

during the currency of the loan by paying the principal

loan amount alongwith interest and other charges. The
Borrower can also make part payments of principal or
interest at any time during the currency of the loan. Prepayment charges, if any, will be mentioned in the pawn
ticket.
4. As notices / reminders will be sent to the Borrower as per
requirements postage charges will be recovered from the
respective account. The charges may be revised from time
to time at the discretion of the Company which will also be
displayed in the notice board and Company's website.
5. The Company reserves the right to sell the Gold by public
auction at any point of time or in the immediate future,
even before the expiry of the period of the loan of one
year, after serving a registered notice to the Borrower
subject to the terms mentioned in para 13 below, if the
Company is convinced, at its sole discretion, that the
market price/ maximum realizable amount by sale of the
pledged Gold has come down below or equal to the total
amount due from the Borrower by way of principal,
interest and other charges due.

Rationale study
Rationale
It is well recognized that household food insecurity is one of
the three underlying causes of malnutrition. At the
International Conference on Nutrition (ICN) held in Rome in
1992, food security was defined in its most basic form as
physical, social and economic access by all people at all

times to sufficient, safe and nutritious food which meets

their dietary needs and food preferences for an active and
healthy life.
Thus food insecurity exists when people lack access to
sufficient amounts of safe and nutritious food and are
therefore not consuming the food required for normal
growth and development, and for an active and healthy
life. This may be due to the unavailability of food,
insufficient purchasing power, inappropriate distribution, or
inadequate utilization at household level. Food insecurity,
poor conditions of health and sanitation, and inappropriate
social and care environment are the major causes of poor
nutritional status.
It is difficult to know how many households or even
individuals are food and nutrition insecure, given the
multiple dimensions (chronic, transitory, short-term and
long-term) of food and nutrition insecurity and intrahousehold inequalities of differing natures in different
regions. Because of the lack of a universally applicable
indicator

and

the

lack

of

understanding

household

dynamics and factors influencing its dynamics, it is difficult

to design or evaluate policies and programmes intended to
address household food and nutrition security or to
examine the impact of non-household food and nutrition

security policies or programme activities on household food

and nutrition security.
To shed light on these issues, in 1995 the WHO Department
of Nutrition for Health and Development (NHD) home web
page

began

undertaking

multi-country

study

on

improving household food and nutrition security for the

vulnerable. The main aim was to provide guidance for
policy-makers to ensure that household dynamics, and
cultural, socio-economic and behavioural considerations
are

routinely

included

in

development

policies

and

programmes that are intended to improve household food

and nutrition security for the vulnerable, e.g. infants, young
children, adolescents, pregnant and lactating women, the
disabled, and older people.
Study objectives
The specific objectives of the study were to:

Identify factors influencing the dynamics of intrahousehold

food

and

other

resource

distribution

for

improving nutrition security of the vulnerable;

Stimulate and build national capacity for operational

research

on

determinants

of

health,

nutrition

and

behavioural change, and approaches to enhancing the

health, nurturing, caring and development functions within
households and communities;

Facilitate

household

and

community-based

interventions to ensure and enhance family well-being with

specific focus on caring for the vulnerable;

Foster the development of human resources and

programmes to protect and promote nutrition security of
the vulnerable;

Collect

and

disseminate

scientific

and

technical

information, and facilitate and encourage an international

exchange of ideas and experience in the area of household
food and nutrition security.
PROBLEM DEFINTION

One of the most discussed topics in the present

competitive gold loan market is about the best gold loan
company. The two stand out names in this context is Muthoot
Finance Limited and Manappuram General Finance and Leasing
Ltd, Both companies face a cut throat competition among each
other to reach the top position of this market. In order to
maintain and increase the market share both companies have
to find out their weakness and turn it into their strengths.
Satisfied customers are vital for the existence of the firms. This
study aims to bring out the reasons which make customers
choose one company over the other.

OBJECTIVES OF THE RESEARCH PROJECT

3.2.1 PRIMARY OBJECTIVES
The primary objective of this study is to compare the gold
loans provided by Muthoot Finance Limited and its
competitors.
To analyze the gold loan facility provided by Muthoot
Finance limited.
To observe the working of the various departments in
relation with the study.
To analyze the rate of customer satisfaction.
To know about the preferences of the customers.

 To study the behavioral factors of customers in choosing a

particular gold loan.
SECONDARY OBJECTIVE
To suggest various factors to improve customer
satisfaction. Thus, increasing the market share of the
company.

SCOPE OF THE RESEARCH PROJECT

The scope of the study is to identify and analyze the factors

which make the gold loan provided by Muthoot Finance Limited
the best and most sought after. The reason behind the huge
success of this facility is unlimited. This study intends to:

To know the present market share of Muthoot Finance

Limited.
Indentify the factors responsible for the high customer
satisfaction.
To evaluate the social security and empowerment process
of the company.
To evaluate the suggestions of the customers which is
necessary for the further development of the organization.

RESEARCH METHODOLOGY
In this chapter, explains the structural frame work .The
research methodology considered as a blue print of the study. It
determines the strengths, reliability and accuracy of the
project. Methodology can be said as the methods used by
researchers in selecting samples, sample size, data collection
and various tools in data collection.
RESEARCH PLAN
PRELIMINARY INVESTIGATION
Preliminary investigation involves the following:
Direct visit to the company.
Discussions with the branch manager.
Analysed about the scope and viability of the existing
facilities.
Secondary data were used to get an overview about the
two companies.
EXPLORATORY STUDY

 Personal interviews with branch manager, staff and the

customers.
Questionnaires were used to understand various factors
affecting the gold loan financing decision.
To analyse and interpret the data collected using figures
and tables.
The last phase of this project is to give suggestions to both
Muthoot Finance and Manappuram Finance.
RESEARCH DESIGN
A research design is the plan, structure and strategy of
investigation conceived so as to obtain answers to research
questions and to control variance by F.N.Kerlinger (1959)
PHASES OF RESEARCH DESIGN
Sample design
Sample design deals with the method of selecting items to be
observed for the given study.

Observational design
Observational design relate to the conditions under which the
observations are to be made while conducting research studies.
Statistical design
These design concern with the quantitative and statistical
aspects of the design such as technique of study, the methods
of model building etc.
COLLECTION OF DATA
The successes of the study are based upon the proper
collection of data. Normally data collected comes under two
categories; Primary and Secondary.
PRIMARY DATA
The data collected directly by the investigator are called
primary data. They are original and give first hand information.

It can be collected by different methods viz. direct personal

investigation, indirect oral investigation etc. Primary data were
collected through
- Questionnaire
- Personal interview
- Survey method
- Observation
- Expert opinion
Questionnaire
The primary data was collected mainly by using a
questionnaire. In study, structured questionnaire consisting of a
list of questions pertaining to the dichotomous questions,
multiple choice questions and questions for recommendations
and suggestions. This facilitates the respondents to fill up the
questionnaire is an easy and fast manner.
The questions are divided in two following sections: Personal details
Inquiry details
Personal Interview
The personal interview was taken from half of the respondents.
This was mainly to elicit information that was left out in the
questionnaire opinions and suggestions were asked for the
betterment of the project.
Survey method
Survey is the most commonly used method of primary
data collection in marketing research. This is widely used
because its extreme flexibility. Survey research is a systematic
gathering of data from respondents through questionnaire.

Survey technique used in the study is personal interview. The

advantages of this method are:
It requires relatively shorter period of time to complete
Researcher can
information

procure

many

different

types

of

The amount of information produced on each aspect is

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

SAMPLING PLAN
Sample Frame
In a present study, convenience sampling method is used for
collecting the primary data. In the survey, 60 customers are
selected as sample.
Tools for collection of data

A questionnaire is developed
respondent under the sample.

to

DATA ANALYSIS, INTERPRETATION

collect

data

AND PRESENTATION

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

Table 5.1

from

the

Opinion

Muthoot
Respons
e

Manappu
ram
Response

% of
Muthoot

% of Manappuram

Once

11

13

36.67

2-5 times

19

63.33

6-10 times

More than
10 times

INTERPRETATION
The above chart was designed to understand number of times a customer
applies for a gold loan in Muthoot and Manappuram.
The response of the customers suggest that 36.67% of Muthoots customers
applies for a gold loan just once while the rest of the 63.33% applies for a gold
loan 2-5 times.
In case of Manappuram, Customers who choose their gold loan facility once
stands at 43.33% and those who choose the same 2-5 times a year stands at
30%. Rests 26.67% of the customers choose this facility 6-10 times a year.
Both Muthoot and Manappuram dont have any customers who apply for gold
loan more than 10 times.

As per the scale below, rate the following factors of Muthoot

Finance Limited and Manappuram General Finance and Leasing
Limited:

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

I.

Rate of interest

Table 5.2

Opinion

Muthoot
Response

Excellent

Manappuram
Response

% of
Manappura
m

% of
Muthoot

20

20

10

33.33

20

Good

11

30

36.67

Fair

16.67

23.33

Bad

Very good

fig. 5.2

INTERPRETATION

The above chart was designed to understand the satisfaction of

the customers with the interest rate on gold loan offered by
Muthoot and Manappuram.
Here, 20% of the customers of both Muthoot and Manappuram
believe that the interest offered by both companies is excellent.
While 33.33% and 20% of customers of Muthoot and
Manappuram think the rate of interest is very good.
30% (Muthoot) and 36.67% (Manappuram) of the respondents
believe the interest rate is good.
16.67% (Muthoot) and 23.33% (Manappuram) of the
respondents believe the interest rate is fair. None of the
respondents thought that interest rate offered by both
companies was bad.
II.

Location of the institute

Table 5.3
Muthoot
Response

Opinion
Excellent

Manappuram
Response

% of
Manappu
m

% of
Muthoot

26.67

16

17

11

56.67

36

Good

16.66

26

Fair

16

Bad

Very good

fig. 5.3

INTERPRETATION

The above chart shows the customer response on the location of both the
institutes.
Here, Muthoot has a superior lead over Manappuram. This is easily
recognisable as 26.67% of Muthoots respondents believe that location of the
institutes is excellent while 56.67% of them believe it is very good.
On the other hand, 16.66% and 36.67% of Manappurams respondents
considered the location factor excellent and very good respectively.
The share of customers who choose Good as their choice to this question
stands as 16.66% (Muthoot) and 26.67% (Manappuram).
None of Muthoots customers selected fair and bad as their option while 16.67%
and 3.33% of Manappurams clients opted for fair and bad respectively.

III.
Table 5.4

Staff behavior

Muthoot
Response

Opinion

Manappuram
Response

% of
Manappu
m

% of
Muthoot

Excellent

23.33

Very good

12

30

10

33.33

23

Fair

13.34

13

Bad

Good

fig. 5.4

INTERPRETATION
Staff behavior is interpreted in the above chart. About 23.33%
of both the organizations thought that the behavior of staff is
excellent.

The share of customers who choose very good as the option

stands at 30% for Muthoot and 40% for Manappuram.

23

33.33% and 13.34% of Muthoots respondents believe that staff

behavior was good and fair respectively. This preference was
selected by 23.33% and 13.34% in case of Manappuram.

None of the respondents to the questionnaire believe that the

behavior of staff in both these institutes was bad.

IV.

Gold loan application procedure

Table 5.5
Muthoot
Response

Opinion
Excellent

Manappuram
Response

% of
Manap
m

% of
Muthoot

12

30

10

11

14

36.67

Fair

13.33

Bad

Very good
Good

fig. 5.5

INTERPRETATION

The above chart was designed to interpret the response of

customers to Muthoots and Manappurams gold loan
procedure.

It was interpreted that 30% and 10% of Muthoots respondents

as well as 20% and 23.33% of Manappurams respondents
believed that this factor was excellent and very good
respectively.

As for option Good and Fair the share stands at 36.67% and
13.33% (Muthoot) and 46.67% and 10% (Manappuram).

No one selected Bad in response to this question for either

company.

V.

Infrastructure facilities

Table 5.6
Muthoot
Response

Opinion
Excellent

Manappuram
Response

% of
Manap
m

% of
Muthoot

26.67

14

46.67

Good

12

16.66

Fair

10

Bad

Very good

fig. 5.6

INTERPRETATION

The above chart represents the rating given by the customers

on the infrastructure facilities of both institutes.

26.67% was the share of Muthoot customers who thought that

these facilities were excellent and almost half of the total
respondents (47.67%) believed it is very good.

And as for Manappuram, those who believed this facility is

excellent stands at 20% and 40% of the total thought it is very
good.

The option Good was selected by 16.66% (Muthoot) and 40%

(Manappuram) respectively.

The option Fair was selected by 10% (Muthoot) and 23.34%

(Manappuram) respectively.

It was suprising to see 3.33% of Manappurams respondents

believed that the infrastructure facility provided by the
organization was bad.

2. Time taken for the whole gold loan procedure?

Table 5.7

Opinion
Less than 5

Muthoot
Response

Manappuram
Response
4

% of
Muthoot
0

13.33

% of
Manapp
m

minutes
5- 10 minutes

30

11- 30 minutes

15

19

50

31- 60 minutes

6.67

Others (Please
mention)

fig. 5.8

INTERPRETATION
The above pie diagrams represents one of the main factors
which decides the fate of any gold loan financing company i.e.
time taken for clearing a gold loan.
Those respondents who thinks the whole gold loan procedure
takes 5- 10 minutes stands at 30% (Muthoot) and 20%
(Manappuram).
The option 11-30 minutes was selected by 50% (Muthoot) and
63.33% (Manappuram) respectively.

The option 31-60 minutes was selected by 6.67% (Muthoot)

and 16.67% (Manappuram) respectively.

3. How satisfied are you with the security standards of

Muthoot Finance Limited Manappuram General Finance
and Leasing Limited?
Table 5.8
Muthoot
Response

Opinion

Manappuram
Response

% of
Muthoot

% of
Manappura
m

100%

6.67

80- 99%

12

14

40

46.67

60- 79%

30

26.66

40- 59%

20

20

>40%

3.33

6.67

fig. 5.9

INTERPRETATION
The above bar diagram is also another important determinant
of a gold financing companys success.

It is interpreted that 6.67% of Muthoots respondents are 100%

satisfied with their security standards while none of the
Manappurams respondents are fully satisfied with the
companys security standards.

It is also interpreted that 40% (Muthoot) and 46.67%

(Manappuram) of the respondents are 80% - 99% satisfied with
the security facilities.

Those respondents who trusted Muthoots and Manappurams

security standards 60% - 79% stands at 30% and 26.66%
respectively.

Both the institutes had 20% of the total respondents who

believed that the security standard was 40% - 59% trustable.

Both the institutes had 3.33% (Muthoot) and 6.67%

(Manappuram) of the total respondents who believed that the
security standard was less than 40% trustable.
4. How did you come to know about Muthoot, Manappuram
and its facilities?
Table 5.9
Opinion

Muthoot
Response

Manappuram
Response

% of
Muthoot

% of
Manapp

m
Newspapers

30

Journals and
Magazines

16.67

11

12

36.67

Notice

6.66

Friends and
relatives

10

Others (Please
specify)

T.V
Advertisements

fig. 5.11

INTERPRETATION
Here, it is interpreted that newspaper as a medium penetrates
about 30% for Muthoot and 20% for Manappuram.

The main medium of advertising for both the companies is T.V.

advertisements which stand at 36.67% for Muthoot and 40% for
Manappuram
Other sources like journals and magazines- Muthoot (16.67%)
and Manappuram (10%), notice- Muthoot (6.66%) and
Manappuram (16.67%), friends and relatives- Muthoot (10%)
and Manappuram (13.33%) also play vital roles in penetrating
the market share for both the companies.

5. Taking into consideration, the recent fluctuations of gold

rates. Do you think Muthoot Finance and Manappuram Finance
are successful in providing effective gold loans?
Table 5.10
Opinion

Strongly
agree

Muthoot
Response

Manappuram
Response

% of
Muthoot

% of
Manappu
m

23.33

14

14

46.67

Neutral

20

Disagree

10

Strongly
disagree

Agree

46

13

INTERPRETATION
It is interpreted from the above 2 pie diagrams that a majority
of the respondents (46.67%) both of Muthoot Finance as well as
Manappuram Finance agrees to the fact that both companies
were able to provide effective gold loans even after the recent
fluctuations in gold rates.
Those respondents who strongly agree to this fact constitute
23.33% and 10% of the respondents of Muthoot and
Manappuram respectively.
20% (Muthoot) and 30% (Manappuram) opted for neutral while
rest 10% (Muthoot) and 13.33% (Manappuram) disagreed to
this fact.

6. In case of default, Does Muthoot Finance and Manappuram

Finance assist by providing long payback period?
Table 5.11

Opinion

Muthoot
Response

Manappuram
Response

% of
Manappu
m

% of
Muthoot

Strongly
agree

12

40

16

Agree

14

16

46.67

53

Neutral

13.33

Disagree

Strongly
disagree

fig. 5.14

INTERPRETATION
Here, it is interpreted a majority of the respondents agrees that
both financial institutions assist by providing long payback
period.
This was closely followed by the opinion that the respondents
strongly agrees that both financial institutions assist by
providing long payback period.
Followed by neutral with 13.33% (Muthoot) and 30%
(Manappuram)

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

 Most of the respondents (58.33%) have monthly income

range between Rs.5000 Rs 10,000.
Media advertisement has an important role in spreading
popularity of both companies among public i.e. 36.67%
(Muthoot) and 40% (Manappuram) respectively.
Majority of the respondents have the opinion that the
behaviors of both companys staff are cordial and friendly.
Majority of the customers were satisfied with the services,
hence there was no need of complaints to be lodged.
NBFCs score over banks on two fronts despite charging
higher interest quick approval and disbursal of loans,
and less documentation. An NBFC at the most takes 30
minutes to give the loan after verifying the gold, and the
only document required is an identification proof of the
person pledging the gold.

SUGGESTIONS
FOR MANAPPURAM FINANCE

They should take up more promotional measures to

increase the market share of their products.
They should concentrate on expansion plans and open
new branches in unexplored areas.
Manappuram should work on improving their gold loan
processing time.

 Infrastructure facilities should also be improved and

should be of international standards to compete with
Muthoot Finance.
Security standards and Interest rates are the other areas
where Manappuram Finance should work on.

CONCLUSION

The comparative study between gold loan offered Manappuram

Finance was aimed at finding out the reasons which makes
these two companies stand out among other gold loan
financing companies and also to identify the best gold loan
provider among these two financing giants.
It helped me to find out the different factors responsible for the
success of these two companies.
The major finding that can be concluded from this study is that
Manappuram General Finance and Leasing Limited still lacks in

many areas although it has grown rapidly in the past few

months and given Muthoot a run for its money.

This experience has helped me gain knowledge about the

business of gold loan financing in India.

LIMITATIONS OF THE STUDY

Time allowed for the study was not sufficient.
A sample survey was selected.
The data provided by the respondent may not be correct
or accurate.
Some of the samples selected for the study did not
respond properly to the questionnaire. However proper

care had taken to make the analysis and interpretations

more meaningful.
Questionnaires are impersonal, this means that it may be
difficult to understand answers and thus to act on them.
Also, there is a chance that the question may be
misinterpreted, rendering the answer useless.
Questionnaires also invite people to lie and answer the
questions very vaguely which they would not do in an
interview.
Open questions can take a lot of time to collect and
analyse.
People are not always willing to fill questionnaires in so
they may just throw them always.
Sometimes questions used are too standardised (closed)
so some peoples preferred answers may not be included,
and this also does not allow for much detail.

BIBLIOGRAPHY
BOOKS
Philip Kotler, Marketing Management , Prentice- Hall of India, New
Delhi, 8th Edition, August 1994

JOURNALS
17th Annual Report of Manappuram General Finance and Leasing
Limited
Draft Red Herring Prospectus of Muthoot Finance Limited issued on 30 th
September 2010
WEBSITES
http://www.muthootfinance.com/
http://www.manappuram.com/
http://www.thehindubusinessline.in/2010/11/27/stories/201011275142060
0.htm
http://www.theequitydesk.com/forum/forum_posts.asp?TID=2635&PN=1

GOLD LOAN MARKET SURVEY QUESTIONNAIRE

FOR MANAPPURAM FINANCE
1. How often do you take a gold loan in a year?
a) Once
b) 2- 5 times
c) 6- 10 times
d) More than 10 times
2. As per the scale below, rate the following factors of
Manappuram General Finance and Leasing Limited:
5- Excellent 4- Very Good 3- Good 2- Fair 1- Bad
I.

Rate of interest

II.

Location of the institute

III.

Staff behavior

IV.

Gold loan application procedure:

V.

Infrastructure facilities

3. Time taken for the whole gold loan procedure?

a) Less than 5 minutes
b) 5- 10 minutes
c) 11- 30 minutes
d) 31- 60 minutes
e) Other (Please mention) ________________
4. How satisfied are you with the security standards of
Manappuram General Finance and Leasing Limited?
a) 100%
b) 80-99%
c) 60-79%
d) 40-59%

e) >40%
5. How did you come to know about Manappuram General
Finance and Leasing Limited and its facilities?
a)Newspapers
b)

Journals and Magazines

c)T.V. Advertisements
d)

Notice

e)Friends and relatives

f) Others (Please specify)
6. Taking into consideration, the recent fluctuations of gold
rates. Do you think Manappuram Finance was successful in
providing effective gold loans?
7. In case of default, Does Manappuram Finance assists by
providing long payback period?
8. Why do you prefer Manappuram General Finance and
Leasing Limited over other Gold loan institutes and
Government organisations?
___________________________________________________________
___________________________________________________________
___________________________________________________________
Any complaints about Manappuram General Finance and
Leasing Limited?
___________________________________________________________
___________________________________________________________
___________________________________________________________
9. Any suggestions to improve the services offered by
Manappuram General Finance and Leasing Limited?
___________________________________________________________
___________________________________________________________
___________________________________________________________