CUSTOMER PROFILING FOR RURAL FINANCIAL SERVICES

PRESENTER :
Maruthi Nataraj Sudhanshu Ranjan Santosh Koppada Madhumita Ghosh Rohit Kumar Ayan Das

AGENDA
INTRODUCTION

DATA DESCRIPTION & PREPARATION

METHODOLOGY

ANALYSIS & INFERENCES

RECOMMENDATION

INTRODUCTION
We, SSRM consultants were approached by leading financial company that required profiling of customers in rural and semi-urban areas to identify their target market for extending loans and also to design marketing strategies to achieve other
Customer Profiling

key benefits to the organization.

Targeting

Objective:
To design a comprehensive model to categorize the customers according to demographic perspective to assess their financial services requirements.
Positioning

DATA DESCRIPTION & PREPARATION

Data Description: Dataset contains 1917 responses taken from respondents residing in rural and semi-urban areas spread across pan India 490 attributes, both numerical and categorical attributes No missing values Preparation: All the respondent data who have not answered(6) a single question were removed All the no responses(6) at attribute level were replaced by respective mode All the neutral responses at respondent level were removed For Cluster analysis we have used total 16 variable(Q38- Q53) with 1816 responses

Tools Used: SPSS, MS Excel 2013

METHODOLOGY
We have used cluster analysis for customer profiling. Two cluster have been formed as per customer preferences
Sl. No. Q38 Q39 Q40 Q41 Q42 Q43 Mean 3.504 3.453 3.651 3.195 2.765 3.067 3.463 Std. Deviation 1.0964 .9936 .9599 1.0268 1.0909 1.0725 .9305

like loan repayment, loan availed, banks visited, etc.

Agriculture

More Educated

Q44

Q45
Q46 Q47

3.813
3.539 3.485 3.604 3.433 3.775 3.758 3.640 3.797

.8425
.8812 .9174 .9284 .9897 .7564 .7873 .8951 .8806

Clusters

Q48 Q49

Low Income

Working Professional

Q50 Q51 Q52 Q53

ANALYSIS & INFERENCES

Sl. No.
Q38 Q39 Job is the greatest source of security for me. I spend within the amount I earn and do not believe in borrowing money or taking credit.

Description

Cluster 1
3.7 3.7 4 3.6

Cluster 2
3.3 3.2 3.3 2.7

Q40
Q41 Q42 Q43 Q44 Q45 Q46 Q47 Q48

Borrowing money is a source of discomfort; I would like to pay it back immediately.

If I have to take loan, I can mortgage my property. I will take loan even at a quite high interest rate to meet my goals (business expansion or asset purchase). I prefer banks which provides me loan for less collateral, even if interest rate is higher. I would always like to take more loans to expand my business. I would prefer to take loans from banks which require no guarantor. I prefer obtaining loans from public sector banks rather than private banks. I prefer taking loans from the same bank every time. I take loans based on the suggestions by relatives, friends etc.

3.3
3.6 3.8 4 3.7 3.7 3.8 3.7 3.9 4 4 4

2.2
2.5 3.1 3.6 3.4 3.3 3.4 3.1 3.6 3.5 3.3 3.5

Q49
Q50 Q51 Q52 Q53

Money lenders in need are friends indeed.

I believe I have a strong credit worthiness to get loans. Non-Banking Financial Companies (NBFCs) like Magma understands customer requirements very well. NBFCs like Magma provides loan easily. I will go to organised lenders like NBFC for loans, before approaching local moneylenders.

ANALYSIS & INFERENCES

Respondent Location
40% 35% 30%

Percentage

25% 20% 15% 10% 5% 0%

East

North

South

West

Zone
Segment 1 Segment 2

ANALYSIS & INFERENCES

Education
Up to Class 4 SSC/HSC Not answered Literate, but no formal education Illiterate HSC+, but not graduate (Diploma etc.) Graduate / Post graduate (Professional B.E, B. Tech, M.B.B.S, etc.) Graduate / Post graduate (General - BA, MA, B.Sc. etc.) Class 4 Class 9

0% Segment 2

5%

10%

15%

20%

25%

30%

35%

Segment 1

ANALYSIS & INFERENCES

Respondent Age
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
25% 20%

Repay Loan sources

Percentage

Percentage

15% 10% 5% 0%
Salary

18 to 25 yrs

26 to 25 yrs

36 to 45 yrs

46 to 55 yrs

56 to 65 yrs

66 and above yrs

Tuition income etc

Agriculture income

Rental income (shop etc.)

Age Group

Source
Segment 1 Segment 2

Segment 1

Segment 2

ANALYSIS & INFERENCES

Repay loan options
Segment 1 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Single instalment (end) Weekly instalment Monthly instalment / EMI Yearly instalment Segment 2

Respondent Occupation
Unskilled manual worker Supervisor

Percentage

Small trader
Skilled manual worker Shop Owner Self Employed Professional Officer / Executive Mid/Sr

Repay Option

City Aligarh

Segment 1 61

City Chennai

Segment 2 65

Officer / Executive Jr Clerk / Salesman

Gorakhpur
Siliguri

54
50

Indore
Kolkata

47
36

Bz/Ind 0 Emp
Bz/Ind >10 Emp Bz/Ind <10 Emp

Durgapur
Vijayawada

35
31

Jaipur
Trichy

27
24

0%

5%

10% 15% Segment 2

20% 25% Segment 1

30%

ANALYSIS & INFERENCES

Information about Loans
Agents Newspaper ads Television ads

Property mortgaged to get Loan

8.00% 6.00% 4.00% 2.00% 0.00% House 4.71% 7.59%

0%

20%

40%

60%

Television ads Newspaper ads Segment 2 12.49% 8.97% Segment 1 9.84% 9.84%

Agents 44.04% 49.95%

Segment 1 Segment 2

Type of Loan requirement 10% 5% 0%

Segment 1 Segment 2

Crop Loan 6.63% 4.54%

Educatio n Loan 0.11% 0.57%

Housing Loan 5.13% 7.72%

ANALYSIS & INFERENCES

Immediate requirement of Loan
30%

Loan Amount (INR) willing to avail

Construction or purchase of house New business /shop setup Agriculture purpose

25% 20% 15% 10% 5%

0%
Agriculture purpose Segment 2 Segment 1 9.99% 13.05%

5%

10%

15%

0%

New business /shop setup 7.95% 12.19%

Construction or purchase of house 11.01% 8.98%

Segment 1

Segment 2

RECOMMENDATION
Segment 1 mainly deals with agricultural activities and could be targeted for crop loans, gold loans, livestock loans etc. As it includes low salaried employees like manual workers, self employed professionals, junior level employees, we can make them use of the banking resources by creating more awareness. As the television viewership is low among them other media like local newspapers, banners/hoardings etc. should be used. Campaigns can also contribute in people-turn up to banks. Since the repayment is dependent on agricultural income to certain extent, suitable time period is to be fixed taking crop seasons into consideration. Segment 2 focuses on people who relate to personal activities like construction of house, mortgaging property for regular pension etc. They can be targeted with high ticket loans such as a housing loan, mortgage loan etc. and proper appraisal has to be carried out by checking their CIBIL score etc. in order to avoid the defaults. At the same time, they need a quality service from the staff which is an important area to be taken care of.

THANK YOU