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Transforming Rural Lives across the Country

Project Report on
Business Development, process of Refinance
Business with new RTO module & Effective
Collection of Instalments

By: Mohit Kumar Bhageria

Branch: Purnea, Bihar

1|Mahindra & Mahindra Financial Services Limited Purnea

The internship opportunity I had with Mahindra & Mahindra Financial Services
Limited was a great chance for learning and professional development. I
consider myself as a very lucky individual, as I was provided with an
opportunity to be a part of it. I am also grateful for having a chance to meet so
many professionals who led me through this Internship period.

I would like to take this opportunity to express my gratitude to our Institute

with Collaboration with Mahindra Finance for providing me an opportunity to
work here as an Intern.

I extend my most sincere thanks to Mr. Manoj Kumar Singh (Divisional

Manager 3 Wlr & Refinance Vertical) for his valuable suggestions and
continuous guidance throughout the project and for the fact that he made me
feel a part of the system right from the first day.

I am also thankful to the team members of the Purnea branch who extended
their support all the time. Their field experience in Mahindra Finance was
extremely valuable for my study both theoretically & practically.

I perceive as this opportunity as a big milestone in my career development. I

will strive to use gained skills and knowledge in the best possible way and
continue to work on their improvement, in order to attain desired career

Mohit Kumar Bhageria

Via- Summer Internship Programme
Purnea, Bihar

2|Mahindra & Mahindra Financial Services Limited Purnea


Sl No. Topic Covered






3|Mahindra & Mahindra Financial Services Limited Purnea

 About the Organization:
 In 1991, started its journey as maxi motors financial services limited.

 In 1992 MF change its name to Mahindra & Mahindra Financial

Services limited.

 Currently, Company is now structured in five verticals.

 Business understanding:

The core business of MMFSL is financing. MMFSL borrow money from

banks and other sources at certain rate of interest and lends to the
customers by charging higher rate of interest on the amount being
financed. MMFSL operates in rural and semi urban areas in India.
Company lends money to the customers by providing loan on various

 Different verticals in MMFSL:

 Farm Equipment Loans

 Light Motor Vehicle Loans
 Commercial Vehicle & Construction Equipments Loans
 Refinance, and Three Wheelers
 SME Funding
 Automotive loan

 Sources Of Business:

 Through direct marketing

 Through dealers
 Through reference

4|Mahindra & Mahindra Financial Services Limited Purnea

 Business Process:

 Enquiry & Field Investigation:

 Enquiry:
Enquiry for business comes through existing Borrowers, brokers, dealers and
direct walk-in customers in branches.

 Handling enquiries:
Enquiries are passed on to the business executives who will conduct Field
Investigation within 24 hours at the residence / work place of all applicants
(Borrowers, co-Borrowers, if any and guarantor).

5|Mahindra & Mahindra Financial Services Limited Purnea

 Purpose Of FI:
• To confirm that the address given by the Borrower is correct or not.
• To ascertain the current financial position of the borrower by asking
relevant questions like his source of income, details of any other
liabilities etc.
• To enquire about the purpose of taking the Loan.
• To gather all the personal details of the Borrower & his family members.
• To check his credibility by a random enquiry with his neighbours.
• To inform the Borrower and the Guarantor about the all the process and
• Verify and collect self attested Xerox of all the documents and check the
same with the original & certify it as true copy.
• Ask relevant questions to understand as to how the Borrower is going
to repay the loan & analyze the income documents to ascertain his
repayment capacity.
• To gather necessary information and ensure that all the required fields
are filled in the PEF in full business executive who did the FI will sign
the duly filled PEF.

 Post Field Investigation process:

The executive who has conducted the FI, based on his findings and the
repayment capacity of the Borrower, approve or reject the case.
For approved cases, he can discuss the case with the ABM before committing
to the borrower. ABM has the final authority to reduce the quantum of finance
and tenure approved by the business executive.
Subsequent to approval, the business executive will attach all the supporting
documents in the borrower’s file and handover to BA.

If the case is rejected, the executive should justify with reasons and the file
should be given back to the Borrower. The relevant details is updated in the
register maintained for rejected cases.

 Required Documents:
• Address and ID proof:- Aadhar card, Voter ID, Driving license
• Signature verification:-Pan card
• Income proof based on the class of the Borrower:-
* For Salaried employees – Latest salary slips for 3 months & Bank statement
of the account in which salary is credited, for a minimum period of 6 months.
* For Business class - Financial statements for Two years & Bank statement
for a period of minimum 6 months.
* For Agriculture class - Land documents like 7/12 extract & Bank statement.
* For Hiring class - RC Book copy of the asset used on hire & Bank statement.

6|Mahindra & Mahindra Financial Services Limited Purnea

*No income proof required for existing customers since track record is
available as a proof of repayment capabilities.

 Documents other than KYC:

 Copy of the RC Book of the asset to be financed, with ownership in the
name of the Borrower and endorsement of lien in favour of Mahindra &
Mahindra Financial Services Limited.
 BA to verify the Xerox with the Original RC Book and certify OR Obtain B-
Ledger extract from the RTO / RTO Online report which shows ownership
transfer in the name of our borrower with lien endorsement in favour of
 Date of B-Ledger / RTO Online report should not be older than 30 days of
DO date. In this case, 10% of the disbursement amount to be held back until
RC book in which ownership is duly transferred in the name of our borrower
with lien endorsement in favour of MMFSL is submitted.
 Copy of the Insurance policy of the asset to be financed, in the name of
borrower and endorsement of lien in favour of Mahindra & Mahindra
Financial Services Limited (Validity of the Policy to be greater than 2
months from date of loan approval).
 Valuation report from Authorized Valuers. Date of valuation report not to
be older than 60 days of DO date.
 Vehicle Inspection report prepared by the Refinance Executive
Chassis print of the asset to be financed.
 Latest Photograph of the asset to be financed, along with the borrower and
MMFSL Executive.

7|Mahindra & Mahindra Financial Services Limited Purnea

 Business Trend affected by external factors in a Calendar
In a sentimentally and culturally driven country like India festivals, social
events like marriage, births, auspicious dates as well as “Saturdays” for vehicle
purchase and specific periods like ‘pitra-pakhsha’ and ‘shraadhs’ are very
pivotal in defining the sales of automobiles.
Being an agricultural dominant economy seasonal fluctuations in crop yields as
well as factors like minimum procurement prices set by the government etc.
also have an effect on the demand for vehicles.
Demand of vehicles at dealerships plays significant role in business
fluctuations of MMFSL.
Trend of business has been analyzed herewith the following columns:

 January to February: (Increase in Sales)

This season witnesses a surge in demand as maximum number of

marriage ceremonies take place during these months and as various
customs of dowry and expensive gifts to the newlyweds owing to social
norms leads to a rise in automobiles being gifted on such occasions.
Customer also tends to buy new vehicles in early stage of the year as the
manufacturer gives new serial number of current year to the vehicle.

 March & April: (Moderate Sales)

This season witnesses moderate sales of automobile because of year

closing and fluctuations in rates of taxes & insurance premium due to
Govt. policies are effective from 1st April.

 May to July: (Increase in Sales)

This period is again a time for an upsurge in sales owing to the harvest
season which gets maximum business for Mahindra products as most of
our products namely Utility vehicles, Tractors as well as Sports Utility
Vehicles find ready takers in agricultural based customers.

8|Mahindra & Mahindra Financial Services Limited Purnea

 August to September: (Decrease in Sales)

In India Ritual days like Manmaas, Kharmass, Bhado & Pitrapaksh play
a very important role in defining purchase of vehicle. People in India
believe that these days are unlucky for purchase of any new product.
Thus during these days decline in business is observed.

 October to December: (Increase in Sales)

The biggest festive season of the country namely DIWALI, Dussera /

Navratri has a massive impact on sales as most people opt to purchase
their vehicles in this particular season owing to the period being very
auspicious. December usually witnesses a surge in sales as most of the
dealers come up with great offers and discount to get rid of their
existing stocks for the year as the customers won’t prefer to have a year
old model on their RTO Certificate and they would prefer to make the
purchase next year.

 SWOT analysis of market share of MMFSL

 Strength
1. Brand image
2. Technology driven
3. Follows business ethics & Commitment follow-up
4. Strong HR policy
5. Prompt service
6. Decentralization of authority
7. TA to dealers

 Weakness
1. Less effort on promotion.
2. No flexibility in documentation causing lot of leads failure.
3. Long process from FI to punching.
4. Increasing OD is ultimately leading to NPA.
5. Lack Incentives on many products.

9|Mahindra & Mahindra Financial Services Limited Purnea

 Opportunity
1. Identification of suitable areas for introduction of some flexible
2. In order to become market leader MMFSL must be one more step
ahead than the other competitors.
3. Personal loan for retail segments.
4. More focus might be given on Gold loan.
5. Business in Mutual Funds needs more manpower & focus of mgt.

 Threats
1. Tough competition in the market at dealerships.
2. Risk involved in area diversification & establishment.
3. Increasing OD ultimately results into NPA. (Non Performing Assets)
4. RC collection. Due to which dealer’s code gets locked.

 Reasons for growth in market share:

1. Maintaining good rapport with the dealers and dealer executives.

2. Turnaround time is low (Fast processing of loans).
3. MMFSL has able to increase commitment by dealers by providing
trade allowance (TA) which pushes them to provide leads.
4. Huge network of employees and branches.
5. Trying to cover wide variety of customers and providing loans
tailoring to the needs of the customer.

 Reasons for diminishing market share:

1. Increase in competition in the market.

2. Other organizations have low rate of interest, low processing cost to
attract customers.
3. Some finance companies provide higher dealer salesman incentive to
gain more business.
4. Employees shifting to other finance companies attract the customers
and dealers to them with the relationship they have.
5. Payout time is slow compared to some of the competitors.

10 | M a h i n d r a & M a h i n d r a F i n a n c i a l S e r v i c e s L i m i t e d P u r n e a
6. Some organizations are very liberal in sanctioning loan by taking
huge risk and funding to blacklisted customers.
7. Public banks like SBI are turning as major threats. Major financing of
Maruti Udyog Ltd are either done by SBI or other private Limited
8. FI is sometimes delayed by more than 2 days which results customer
9. National Banks & Private Banks penetration in Vehicles Financing
has also increased aggressively.
10. Tata dealers has their own finance company. Major chunk of
financing Tata vehicles goes with their own financing agency.
11. Guarantor issues/Lengthy Documentations Procedures
12. Payment delayed to Dealers.

 Strategies for developing market share:

 Salesman payout at dealership:

 Salesman payout is way too less as compared to other financiers like
Magma, HDFC, etc. and that too takes a lot of time (2-3 months) to get
processed, causing discouragement which results in loss of cream files &
lead generation.
 To curb out such a problem, payout to salesman should be made on the
date of DO being released.
 Thus the process of instant payout will motivate the salesman in some
way or the other and in turn will push the salesman to forward good
cases to MMFSL.

 Waiver:
 Existing customers should be given waiver of 1 to 1.5 percent in rate by
default. This increases the TAT & level of satisfaction to the customer
as well as the dealer.
 Waiver of guarantor could be offered to genuine existing customer who
has 2-3 vehicles financed from MMFSL.
 Waiver of guarantor should be given up to 70-75% funding which is up
to only 60% in Non M&M products. This would bring more business to
the company as majority of cases turn down due to the guarantor policy.
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 Other strategies to increase market share-
 Maintaining good relations with executives and the higher
authorities should be in priority.
 A monthly tracker or a daily sales register (DSR) is to be
maintained compulsorily.
 Team leaders should have weekly reviews of their respective
 PDDs to be collected as soon as possible from the dealer.
 For Personal loans and Re-finance cases, existing customers
should be targeted effectively.
 Prompt service and customer-satisfaction should be given top-
most priority.
 Any issues/problems should be immediately communicated to the
 TAT (Turnaround Time) service should be improved. Executives
need to take care of FI and DO early so that the cases could not be
handed over to other finance companies.
 Attractive pay-out schemes should be made so that the sales
executives could be motivated effectively.
 Visits of higher authority at the dealer spot and talking with
executives would also help in knowing the problems and issues so
that it could be resolved early.
 Relaxation on some documentation, especially related to
 Monthly meetings with dealers involving ABMs & DMs.

12 | M a h i n d r a & M a h i n d r a F i n a n c i a l S e r v i c e s L i m i t e d P u r n e a
 Existing process for Business through RC Limit

What is RC Limit in Refinance Business?

 When the file is submitted by the Dealer to whom RC Limit facility is

 Ownership of the asset will not be in the name of the Borrower of
MMFSL in RC and Insurance.
 There will be no endorsement of Lien in favour of Mahindra &
Mahindra Financial Services Ltd.

 Limitation of the Process:

Due to the existing process, we were unable to cater this business due
to our existing business SOP of disbursement ie. post duly completion
of transfer in name of borrower and hypothecation in case of NON RC
business or direct sourcing business.

Presently the below mention points are hampering overall growth

in business:

 Seller wants to the sell the vehicle to a new borrower who wants the
finance facility & we are not catering this business due to current RTO
process & SOP.

 Customer needs refinance on existing vehicle & we are not able to cater
this due to TAT in hypothecation process.

 Existing balance Transfer cases of MMFSL. (Borrower wants to sell the

vehicle to new customer & existing loan to be deducted from new

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 New RTO Module

The launch of RTO module for category B business sourcing:

 The RTO Module approaches to have a centralized tie-up with

MFCWL (Mahindra First Choice Wheels Ltd) where MFCWL will
take the responsibility of transfer of RC & Hypothecation in favor of
 The RTO module gives complete digital platform which will have real
time interactive access to respective business executive, branch accounts
and seniors for daily review, control and monitoring.

 Business team can access this module from their existing MOBILE APP.

 MFC can also be used for centralized form B extract for all the products.

 Complete procedure for processing file under RTO module is

as follows:
 Process for Business Executives:

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 Process for Branch Accounts:

 Punching process:

 Dealer: Mahindra first choice wheels ltd.

 RC limit code: 19960 (Set RC limit 100 no’s & 60 days)

 Prime Lead Source: MFCWL

 Lead Source Type: RTO Module

 Scheme code : Special MFC scheme to be selected for booking of

this business.

 Form B Extract Process:

This process is used to pull out the Form B extract of any customer
from the various RTO offices Pan India:

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Step 1:

 Send the details in the following format for Form B Extract:

S. No. Customer Name Reg. No. Chassis Engine No. Make Model Variant

Step 2:
 Send mail to:;

The details will be processed by MFCWL team for extracting the

required information.

 Direct Customer RTO Services:

This process is to cater to the direct customer cases through a branch
limit process where Mahindra First Choice will be our service provider.

Step 1:
 Login to your account. Every branch will have a dedicated login
which needs to be entered by going to the following link:

16 | M a h i n d r a & M a h i n d r a F i n a n c i a l S e r v i c e s L i m i t e d P u r n e a
o Note: Every branch accountant will be given a format of the
sanction letter which needs to be uploaded in to the system after
the file for the customer is received from the executive.

Step 2:
 Click on RTO Status in the menu bar to look at the customer list
against which you need to upload the sanction letter.

Step 3:

 Scroll to the extreme right to see an upload slot. On clicking

the upload slot select the .png or .jpg file of the sanction
letter and press submit.

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 Collection

Introduction of New RTO module, has not only helped to upgrade

business by penetrating more to access more leads, but also streamlined
the operation.
The volume of operation in business marks the profitability during the
However there is another aspect, which turns out to play major role in
business progress and contribution in profit. It is called ‘Timely
Collection of Installments from customer’.
Collection is an important aspect because our profit lies in collection of
principal and interest. Collecting AFC (Additional Finance Charge) is
one of our compensatory aspects to cope up with the loss we incur.

Based on operations, collection has been classified as


 Collection from CD customers (Current Due)

 Collection from OD customers, (Over Due) &
 Collection of AFC (Additional Finance Charge/ Fine)

 Collection target as per the age:

Age Bucket/Outstanding Monthly Collection Target
A. Nil Bucket Cases / 0 ageing Collect 100% of C.D
B. 1-3 ageing Collect 1 CD + 1 OD
C. 4-5 ageing Collect 1 CD + 2 OD
D. 6 & above Effort to collect full dues / Min.
1CD + 3 OD

 Mode of Collection:
 Cash,
 Cheque; PDC,
 DD,
 Online Payment, &

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 Delinquency Rate:
Delinquency rate is the percentage of loans within a loan portfolio that have
delinquent/overdue payments. The delinquency rate is simply the number of
loans that have delinquent payments divided by the total number of loans an
institution holds. Typically, delinquency rates on loans are affected by the
credit quality of the borrower and macroeconomic factors such as

 Due Date:
Due date is the date on which the borrower has to pay the instalments which is
stated in the contract. The due date which we usually follows are 5, 10, 15 &
20 of every month and the maximum collection of our branch comes on the
day of 20th of every month. The customers who fail to make payments on their
due date are imposed penalty; which is known as AFC (Additional Finance
AFCs are one of the direct sources of income for the company. AFC are
charged at a rate of 36% (current rate) per annum and varies day by day.

 Post Dated Cheque (PDC):

PDC based collection is one of the most convenient ways of collecting
instalment because cheques of instalment amount are pre deposited at the
branch and are validated on the due date and submitted to bank for clearance
by the Accounts department itself.
However in rural areas, people prefers cash transactions rather than the
banking services primarily because of the non existence of the banks channels
near to their area, prevailing illiteracy and unawareness with the banking
formalities, the people are not very much habitual of the banking transaction,
while some hesitate in providing the payment through cheques.
The banks are also reluctant to issue cheques to the rural class.
PDC has not been widely accepted as mode of payment as the income of the
rural class is not constant throughout the year (mainly depends upon the sale
of their agriculture products) due to which they cannot ensure when they may
keep the amount in their savings account.

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 Effective Collection:
Collection of instalments has always been the major focus of management, &
has as much importance of doing business or sanction loans.
Likewise Business team, MMFSL also engages collection team for conducting
effective collection of EMIs from the customers.
MMFSL has come up with various policies and schemes to tackle delinquency
levels in the Organisation.
Following points shall elaborate the moves of MMFSL to curb the collection

 Separate teams for collection of EMI are lead by ACMs & experienced
 Business teams are responsible to judge the customer profile and the
capability of customer to pay the EMI timely as they sources & generate
customers. Thus, to enhance collection & have smooth conduct of
collection operations, business teams have to look after the collection for
first 12 months of installments. Collection responsibility is shifted to the
collection team of the branch for later installments.
 Customers are periodically reminded about their due dates.
 Collection team mobilizes themselves to reach out customers at their
residence if the customers are not capable to come to the branch or
having no access to submit their installments.
 Business team duly aware the customers about the contingencies and
AFCs for defaulting any installment.
 The management uses various analytical tools to give effective
directions to the collection team. Records with current dates are
monitored and analyzed for briefing the direction and to remove
bottlenecks at operations.

 Tracking tools of ageing:

 Bucket Movement report
 Zero Age Summary

20 | M a h i n d r a & M a h i n d r a F i n a n c i a l S e r v i c e s L i m i t e d P u r n e a
Bucket Movement Report:

 Bucket movement report states current data of bucket shift from

opening age to next age if the installment is not been paid.
 The Collection report is generated “Division” wise which is further
segregated to Area & further to Executive’s field.
 The report is helpful to track the ageing status & enhances effective
decision making to improve collection and strategy planning for the
Zero Age Summary:

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 Zero Age Summary:
 Zero Age Summary states current data of opening age balance and
current status of the number of customers on due date.
 There are six due dates as practiced in MMFSL ie. 1st, 5th, 10th, 15th,
20th, & 25th.
 The Collection report is generated “Division” wise which is further
segregated to Area & further to Executive’s field for effective
decision making.
 The report would be very beneficial for solving overdue of customers
if monitored and referred on daily basis. The report should be
transparently accessed by all executives using display boards at

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