How to make Time to Cash in 5 days

By

Nabarun Paul

EMPOWERING MINDS

AIMS Institute of Higher EducationPeenya, Bangalore

Introduction

Consumer Finance: “The division of retail banking that deals with lending money to consumers. This includes a wide variety of loans, including credit cards, mortgage loans, and auto loans, and can also be used to refer to loans taken out at either the prime rate or the subprime rate.”Consumer Durable Finance“Consumer durable finance means to provide the finance on the consumer durable product like, washing machinist, TV etc. it is known as consumer durable finance”The consumer durable finance provide the 0% interest on durable product to the consumer, This gives customers another compelling reason to opt for 0% interest Consumer Durables Finance for their durables purchases. Consumer durables finance schemes are generally available at the dealer location (point of sale) or the showroom. The beneficiaries are not just customers – lenders, manufacturers, and retailers too benefit. Manufacturers gain from the resultant boost to sales and increased consumer preference towards high-margin products. Financing schemes enable customers, especially those with lower income levels, to use future income streams to buy consumer products upfront and pay in installments over a period.

Introduction (Continued)

The most popular finance scheme prevalent in the market currently is the 12/4 scheme, where the financier collects the amount for the first four months as initial down payment from the buyer and then disburses the full amount to the dealer. The financier then recovers the balance amount in 8 monthly installments from the buyer. The interest and processing charges are generally paid upfront by the manufacturer to the financier. Consumer durables financing appears robust, continued support from would be critical to sustain high growth.

Meaning of NBFCNBFC means Non-banking financial company. A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 of India and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property.

Profile of Company

o Bajaj Finserv, a part of Bajaj Holdings & Investments Limited, is an Indian financial services company focused on lending, asset management, wealth management and insurance.

o The company is currently engaged in consumer finance businesses, life insurance, and general insurance and has plans to expand its business by offering a wide array of financial products and services in India.

o Promoted by the Bajaj Auto group in 1987

o A diversified lending business with 9 product lines focusing on consumer finance & SME business

o Strong distribution reaches with more than 225 points of presence and more than 4,000 distribution partners and dealers across India

SWOT Analysis

Strengthso Proper setup for customer handling with less work disruptiono Widespread distribution networko High performance across categorieso Great financial support networko More schemes than competitors

Weaknesso Uneven schemes to customero One sales executive fails to entertain the customero More strict policy than competitors

SWOT Analysis (continued)

Opportunitieso Untapped market above other lendingo Growing demand for 0% financial schemes especially in emerging

marketo Proposing to launch more other financial schemes more product

introductiono The growing and improved schemes in the market

Threats o The competitions catches-up any new innovation in no

timeo Threat of other financial lenders like future finance etc

offering the same benefitso Margins getting squeezed from both the directions

Literature Review o Time to Cash is a process that Bajaj Finserv possesses. The whole

process from generation of customer loan approval to closing of files, the total process comes under time to cash. The whole process has to be completed within 5 days.

o From file generation to payment to dealers it takes more than a week. The study is about how Bajaj Finserv how fast they can pay the dealers. How process should be restricted in 5 days. After a file gets approved from the headquarters the collection tem collects money from dealers and full amount is being paid to the dealers after that.

Research Methodology

Research Objectives 1. To study the different financial schemes of Bajaj Finserv.

2. To study the loan procedure for durable product at Bajaj Finserv.

3. To study the surrogates of the Bajaj Finserv

4. To study the process of time to cash.

Research Methodology (continued)

Data Analysis

1 3 5 7 9 11 13 15 17 19 21 23 25 27 290

0.5

1

1.5

2

2.5

3

3.5

No of days

No of Files

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 310

0.51

1.52

2.53

3.5

No. of days

No of Files

Hold and pending files for the month of June and July

Research Methodology (continued)

Limitationso Sometimes customer gets dissatisfied due to the restricted policies of

EMI procedure.o Sometimes customers get dissatisfied with the processing charges.o Time to Cash takes lot of procedures. Courier people takes high charges

Major Findings

o Bajaj Finserv Lending provided loan on consumer durable product to the customer as per the surrogates.

o Delay in payment of dealers is because of late submission of documents by the customers. 

o Lethargy of sales executives in sending files to the branch office so it consumes more time, so processing of files takes more time. 

o The files are kept on hold if customers sign don’t match with the sign on the mandate paper in that it takes more time and the payment delayed to the dealers 

o The files that are pending and files that are on hold leave the counter first before sending the present day’s file.

o Customer forgets any of the mandatory documents in that case it consumes more time hence time to cash process gets delayed.

Conclusion & Suggestions

CONCLUSIONo Bajaj Finserv Lending provides consumer credit services which are

helpful for the financial stability.o Financial stability is very important not only for the businesses but also

for the consumers. The businesses and as well as the consumers need the stability regarding the financial matters because without the stability no one could be very innovative in the longer run. 

o Consumer Finance market being an untapped one in India holds a great scope for progress and market capture and Bajaj Finance Limited has been exceptional in that till date.

Conclusion & Suggestions (continued)

Suggestionso Bajaj Finserv should move towards of automation of the total process.

It takes 5 days to pay the dealers; automation of the total system would take lesser time to process a file and pay the dealers on that day. 

o Bajaj Finserv mobile application should be given much importance because the customers can approve loans for themselves or the ISD’s can approve loans for the customers without discussing with Sales Executives present in the store.

o Management must encourage Executives to concentrate more on Cross Selling

o Customers should be made aware of the documents from before financing so time taken to process a file becomes less 

Key Learnings

o How Bajaj Finserv generates revenue after financing at 0% interest. o Got to know about ECS(Electronic Clearance Service)o Dealing with customers is important but before that one needs to know

how to approach a customer, what to say, is more important, I got to know that how to deal with customers. 

o Time to cash process

Thank you