An Analysis About the Reasons of Slow Growth of Fixed Deposit Product of Mahindra Finance

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SECTION II
AN ANALYSIS ABOUT THE REASONS OF SLOW GROWTH OF FIXED DEPOSIT PRODUCT IN THIRUVALLA

1. INTRODUCTION
1.1. BACKGROUND OF STUDY
Mahindra Financial Services Limited was incorporated as Maxi Motors Financial Limited on 1st January 1991. Its name was changed to Mahindra and Mahindra Financial Services Limited (MMFSL) on 3rd November 1992. It offers various products like tractor loans, commercial vehicle loans, gold loans, car loans, personal loans etc. It is one of the top non banking financial companies in India. It started its fixed deposit program in 2009. It has started fixed deposits products in various parts of Kerala including Thiruvalla . But the fixed deposit product has witnessed very slow growth in this area. The objective of study is to identify the reasons for slow growth. 1.2 STATEMENT OF PROBLEM

“Slow growth of Fixed Deposit product in Thiruvalla”
MMFSL is a company with a history of 22 years of operation. Fixed deposit products of MMFSL offers high interest rates compared to banks. The fixed deposit product has also been accredited with FAAA ratings by CRISIL which indicates highest safety. Yet this product failed to achieve the expected growth especially in Thiruvalla area. Thiruvalla is an area with enormous potential for growth of such products. There are a large number of people with high income. So there is very huge market for fixed deposit product in Thiruvalla. Yet people are not very much willing to make deposits in Mahindra finance. The study is conducted to identify the reasons for this slow growth and to suggest possible solutions to overcome them. 1.3 RELEVANCE OF STUDY

Mahindra Finance has achieved quick growth in last two decades and is one among the top 5 NBFC’s in India with net income over 4113 crore rupees. The company plans on raising a part of its capital for this financial year through fixed deposits collected from people in different parts of the country and hence reduce their dependency on FII’s for raising the required capital. However the fixed deposit product has not achieved the expected growth. Under such circumstances it is very much important to identify the reasons for such slow growth and to take corrective action. The objective of the study is also the same. 2. RESEARCH PROCESS

2.1 OBJECTIVES OF THE STUDY
Following are the objectives of the study
* To identify the reasons for slow growth of fixed deposits product of Mahindra Finance in Thiruvalla area and to take corrective action * To suggest methods for the promotion of fixed deposit product in Thiruvalla

2.2 SCOPE OF THE STUDY
The study is helpful in identifying the reasons for slow growth of fixed deposit product in Thiruvalla. Once the reasons for the slow growth have been identified corrective measures can be taken. If proper corrective actions are taken the fixed deposit product will achieve the expected growth. So this study can be helpful in promoting the fixed deposit product of Mahindra Finance. This study can also be helpful for promoting other investment products also

2.3 RESEARCH DESIGN
Tools for data collection
The tool used for data collection is Questionnaire. A questionnaire consisting of 10 questions was used to collect the data required for the study

Methods of data collection
Market survey was conducted among the people of Thiruvalla to collect their response about Mahindra finance fixed deposits. Independent financial advisors in this area were interviewed to obtain their opinion about the product

Sampling
Random sampling technique was used to collect data. The sample size is 200

3. LITERATURE REVIEW
Reserve Bank of India Act 1934, defines Non Banking Financial Company as a registered company a) whose principal business is lending, investments in various types of shares/ stocks/ bonds/ debentures/ securities, leasing, hire-purchase, insurance business, chit business and/or b) its...
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