PROJECT REPORT ON:

STUDY ON FUNDING METHODOLOGY ADOPTED BY HDFC

BANK LIMITED AND OTHER MFIS/BANKS
SUBMITTED TO : HDFC
BANK LTD.

BY:
ARCHANA
PGDABM
(2015-2017)

Research Objectives
1. To compare the lending policies of HDFC
BANK with other
banks and MFIs
2. SWOT Analysis
3. To extend credit support to the potential
areas
Research Methodology 1.Preparation of questionnaire.
2.Method of sampling: Stratified random
sampling
3.Focused group discussions.
4.Collection of data from bank and mfis.
5.Comparative study and SWOT analysis

INTRODUCTION
HDFC BANK LTD IS DEALING
WITH TWO PRODUCTS UNDER SELF
LIVELIHOOD INITIATIVE:
SELF

LIVELIHOOD
INITIATIVE

SELF HELP
GROUP

JOINT
LIABILITY
GROUP

SLI MEMBER PROFILE

OF HDFC
AGE CATEGORY IN THE GROUP

15

10

YOUNG: 18 25
MIDDLE AGE: 26 45
AGED: 46 55

70

OLD > 55

PERCENTAGE OF EDUCATION IN THE GROUP

ILLETRATE; 20%

LITERATE: READ AND

WRITE
LITERATE; 80%

ILLETRATE:CANNOT
READ AND WRITE

Annual Family Income of SLI members

%activity m em ber
no

23

yes

1 9
24

27%
55

<12000
25000-50000

12000-25000
50000-1lac

73%

120
MEMBER
S
113(acti
7(not
ve
active)
member
s)
Tiffen

Stitching

Farming

Parlour

Fruit/veg.
shops/Vendo
rs

Personal
expenses


TIFFEN/MESS
STITCHING
FARMING
PERSONAL EXPENSES
PARLOUR
FRUITS/VEG.
SHOPS/VENDORS
PAPAD MAKING

NO OF MEMBERS
20
12
6
23
12

PERCENTAGE (%)
17
10
5
19
10

32

27

8
113

7
100

Borrowing and Expenditure

FUND AVAILING

10%

INDEBTHNESS OF
CUSTOMERS

BANKS/MFI'S
LOCAL LENDERS

11(NO
LOAN)

90%

PSU(34)

UJJIVAN(8)

JANLAXMI(21
)

SURYODA
Y(4)

INDEBTHNESS OF CUSTOMER
40
35

34

33

30
25
20
15
1011

12

12
8

5
0
NO LOAN

3
PSU

UJJIVAN

JANLAXMI

BANDHAN

BELSTER

SURYODAY

BELSTER
(3)

BANDHAN
(9)

C
O
M
P
A
R
T
I
V
E
A
N
L
Y
S
I
M
D
S
.0
1
0
S
P
A
N
D
H
A
N
I
J
A
N
L
A
X
M
I
.5IC

Dimensio2

S
K
E
Q
U
I
T
A
S
.-0
0
H
D
F
C
.-1
5
G
R
A
M
E
N
K
O
T
A
U
J
I
V
A
N
.0
-2L
1
0
1
2
E
S
P
R
E
F
R
E
DM
O
S
T
P
R
E
F
R
E
D

GRAMEEN
CRITERIA

HDFC

PRODUCT
ROI

SHG and JLG JLG

19% , 14.08% 23.75%
Bank channel

SOURCING

NO

JANALAKSHMI

UJJIVAN

JLG
JLG
23.6%
22%
old
customer, old

KOOTA

ICICI BANK
JLG
and

JLG
19.7%

JLG
27.6%

JLG/SHG
23%

SHG
18-20%

customer
Bank

,pamphlets

,pamphlets

channel

5-20

8-20

group members

5-20

5-25

>80%
THE Minimum

GROUP

SPANDANA

Bank channel

LITERACY
RATE
AGE OF

SKS

Bank channel ,lead from existing Bank channel

OF

MEMBERS

EQUITAS

not considered

not considered
12

months

(12-24) months

6months

NGO, Bank
Bank channel
Bank channel
No limit of max

channel

member(divide in

not considered

5-20

sub groups of 5 to 5- 30

10-20

20%

10)

Not

of

the group Not considered

12months-

Minimum

24months

Nil
Know

Min 6 months

months

considered
6 Min
6
months

each
Should
COMPOSITION belong

not
other Know each other

Know

each

other,

to Know

each

same

with

no

caste,same

borrowers

same

should not be of should not be of criteria

family.

family

same family

co-

other

should not
be

of Know each other, Know each other, As

same family

ngo

DISTANCE
FROM CENTRE
OF

MEETING

OF

THE

less than 1 km
200-300m

100-300m
200m

Not

per
of

CRITERIA
HDFC
INSURANCE Rs 100
COVERAGE

JANALAKSHMI

UJJIVAN

EQUITAS

for

JLG

yes (Rs 120)

yes

Nil

REGULARITY

SPANDANA

KOOTA

BANK

Yes

Nil

yes

Yes

15

1 time in a On a fixed date

weekly

MEETINGS

month

TAT

5 days

3-5 days

disbursement date

7 days
14 days
5days
10 days
Not
Not
Not considered
considere
considered
d
Not considered

Done(SHG)

LENDING

fresh
not

AMOUNT

MARITAL
CRITERIA

existing

first

lender
TOP

Not considered

UP Given

fresh and existing

Not given

Married,

Mostly married if

unmarried

unmarried

age>40

and

loan fixed

OF

R-D

Both fresh and

existing
groups
5000 given on

Not given

completion of
10 weeks.

Married

Married

ICICI

SKS

meetings On

before

GRAMEEN

On a fixed date

days

meeting

one Yes
with

bank officials

4-5 days

3days
Not
considere

Not considered d
Every

Both

Both

member

Both fresh and should

existing

avail loan

Not given

Not given

Not given

Married(compuls

Not
Given

ory

present

of

Married

husband

during Married

Married

loan

disbursement)

CRITERIA

HDFC
done

JANALAKSHMI UJJIVAN

EQUITAS

in

group in jlg
COLLECTIO
NS

RATING

1st

SKS

Fixed
On 5th or 15th

collection is of every month

Weekly

On

28th

of date

every month

SPANDANA

GRAMEEN

ICICI

KOOTA

BANK
No

Fixed date in a

collection

week or month

of

by

amount

bank Weekly

officials

as

its

on 15th day (1st amount is

deducted

of funding

maximum)

from their

No

account
700/

100/200

80/100

rating

No rating

No rating

1000

120/ 200

No rating

25-50KMS

25KMS

DISTANCE
FROM
BANK

TO

GROUP
DOCUMENT
S FOR
VERIFICATI
ON

25KMS
25 KMS

Aadhar

Aadhar

card,voter

card,voter

id,electricity id,electricity bill

bill(jlg)

SAS/Highma SFDC,Highmark,

NOT
25KMS

25KMS

COSIDER

ED
Ration

Aadhar

Aadhar

card,vote

card,voter

card,voter

card,vot id,electricity

id,electricity

id,aadhar

er id
bill
Highmar

bill

card

25KMS
Aadhar

Ration

card,voter

card,voter

id,electricity

id,aadhar

bill

card

Aadhar

CRITERIA
INITIAL
LOAN
AMOUNT

HDFC

JANALAKS
HMI
UJJIVAN

3000010000 40000

Rs 30000

EQUITAS

SKS

Rs 20000

Rs 15000

SPANDANA

Rs 10000

GRAMEEN KOOTA

Rs 15000

ICICI
BANK

Rs 50000

loan
avg
glp
glp
clien clien
amount
ts
ts
chan loan
loan
per
per loan
disburse
per
ge outstan
amount
ber
loa
Employee( Ofcer(rs loan
d(
Bra
ding
n
(
disbursed
rs in lak) in lakh) ofc bran
State
nch
Emplo
clients
quarterl
Glp(in
of
per
per
ch
er
Quarter
)
s
es
yees
(lakh)
y,
Rs
cr)
cer
client
account(r
%
s
(Rs)
Cr)
s)
YOY

MFI

Q3
15
Janalaksh Q2
mi
16

SKS*

Ujjivan*

Equitas*

fy14- 2,956.30
fy15- 6,338.69

114%

Q3 fy 14- 3,194.81
15
93%
Q2 fy 15- 5,462.09
16

Q3 fy 14- 2,870.02
42%
15
Q2 fy 15- 4,088.20
16

Q3 fy 14- 1,970.88
15
Q3 fy 15- 2,319.72

18%

avg

14,678

995

20,295

19,408

2,742

30,175

9,024 1,544

12,146

14,295

2,665

13,404

15,064

1,174

20,469

15,739

1,648

19,884

8,985 500

13,714

9,634 619

15,342

223

5,544 5,3
77
7,344 7,1
11

20.14 53.32

54.98

375 9,032

32.66 86.31

89.14

459 11,5
82

9,089 4,4
40
18 1,138 10,782 5,4
56

35.40 35.15

71.96

797 3,111

38.21 50.66

100.11

700 3,358

6,547 3,5
42
7,786 4,1
05

19.05 43.84

81.03

538 4,504

25.97 52.51

99.59

633 5,538

3,730 2,0
86
4,255 2,3

21.93 52.84

94.48 1,052 6,196

24.08 54.52

98.13 1,019 6,387

18

282

1,138

423
24

469

354
8

377

With the above graph we can see that MFIs penetration is less in the
northern states which holds a good opportunity for the bank to expand in
those areas, also no of rural people inhabiting in states like Bihar, Uttar
Pradesh, Madhya Pradesh are more comparison to the southern states so
those untapped areas hold a good opportunity to expand with the bank
The
MFI
customer base as a percentage of total households in most southern
credit
policies.
and eastern states is alarmingly high. Our analysis suggests that in the five
large states of Tamil Nadu, Karnataka, West Bengal, Assam and Odisha, which
account for 50% of Indias total outstanding microfinance credit, one of every
five households has borrowed from MFIs as of FY15. In the top 7 states which

SWOT ANALYSIS
Distance from the Branch
Less Number of Staff
Rules and regulations not properly
followed

Special Services
Huge networking.
Low Interest Rate
Strong Customer Base
Strong Brand Image
Timeliness service

Offer New Schemes

Open More Branches

STRENGTH

WEAKNESS

OPPORTUNI
TY

THREAT
Increasing competition
Not utilization of credit for economic activity
Money lenders and brokers decreases ROI

SUJJESTIONS AND
DISCUSSIONS

Bank should increase the initial funding amount.

Provide an emergency fund
Bank officials should visit the groups on weekly basis so that they could get the idea where the
group is utilizing their credits.
For knowing the repayment capacity of the individual bank should look at their annual source
of income and the annual return from that.
Bank should try to associate itself with the NGOs for sourcing.
Monthly repayments can be deducted from the savings account itself.
Provision of tollfree number with their phone number linked with the Bank. If such system is
implemented it will be very useful for the members in clarifying their doubts, as in every group
there may be few members who feel shy to ask their doubts in meeting.
Bank can look forward for the formation of subgroups in case of JLG.
Bank should link with cooperatives like dairy, sugarcane factories and MNREGA organizations
for sourcing. As these cooperatives have registered stakeholders, whose spouse may be
engaged in some or the other activity who can be trained for SHG/JLG funding like Mavin does
for ICICI.
Share data base of mfis and bank.

KEY LEARNINGS !!!

How to extract exact data from the offices of different mfis.

Understood the corporate culture of different mfis and banks
Time management.
Rural exposure

U
O
Y
K
THAN