...b 4P’s DESCRIPTION OF BAJAJ FINSERV LENDING IN CONSUMER DURABLES FINANCE SUBMITTED BY : - SUBMITTED TO: Amey Deshpande PROF. ARPITA PANDEY PGDM- 822 (MARKETING-M1 BATCH) PRODUCT The products/services that we are assigned to market out for Bajaj Finserv Limited are: 1) 0% Interest on Consumer Durables Finance With the 0% interest Consumer Durables Finance from Bajaj Finserv Lending, customers don't have to pay any interest whatsoever on the loan amount opted for, simply divide the total amount of purchase with the loan tenor opted for, pay a few installments upfront along with a nominal processing fee and off you go with your favourite consumer durable. There are no hidden charges on those consumer durables. Bajaj Finserv is able to finance goods to consumers without charging any interest as they have tie-ups with manufacturers and dealers regarding price of the product as company cannot do business without earning profits. Bajaj Finserv has been growing well since 2008 as due to the recession many of the companies stopped there financing business and there is only one competitor in market HDFC. HDFC provides facility to its credit card customers only so the rest of customers are bound to come to Bajaj Finserv but even HDFC charges interest on EMI but Bajaj Finserv doesn’t charge interest. The extra advantage on Financing for CDs are that BFL is giving...
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...Organizational Concepts and Terminology The concepts and terminology of an organization is important for any organizations success. The concepts and terminology will include organizational culture, diversity, behavior, and communication. All are important and link with one another in a well organized company. There are written and unwritten rules and assumptions that will define the culture of the organization (The Sergay Group Ltd., 2011). Culture plays out in an organization in many different ways. It can identify the specifics of how information is communicated and how performance is managed. The concepts of culture also specify how projects are coordinated within the organization, and sets up the hierarchical levels and job titles ((The Sergay Group Ltd., 2011). Organizational culture and behavior contribute to the psychological environment of an organization. The culture of an organization is comprised from the organizations past and current assumptions, their experiences and the companies values. The actions of the company and employees towards the company and coworkers define the behavior of the organization. An organization that is successful has a behavior that is friendly and functional, flowing to a hierarchy level of management (The Sergay Group Ltd., 2011). Diversity can be defined as a characteristic of a group of people suggesting differences among those people on any relevant dimension (Hitt, Miller, & Colella, 2006). Key concepts of diversity...
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...of Cash Connections current strategy is that the loans are relatively easy to obtain, in most instances a credit check is not necessary in order to be approved for a payday loan or cash advance, a payday loan or cash advance requires no collateral, payday loans and cash advances often require less paper work than conventional loans, you can locate a payday loan or cash advance of the company close to home and online, and payday loans provide quick cash when unforeseen circumstances arise. The cons of Cash Connections current strategy is that the payday loans and cash advance can be very expensive i.e. having a 500% interest per year or more, if a borrower does not repay their payday loan or cash advance and keeps on extending the loan it can cause lots of debt fees, sometimes payday loans and cash advance companies utilize unscrupulous, unethical and illegal means to collect default loans, payday loans don’t solve long-term budgeting problems and only solve a short-term solution, all states don’t accept payday loans and cash advance, a lot of the companies make the borrowers sign contracts that are favorable to the company instead of the borrower. There is evidence that has proven that this strategy has worked. For example in North Carolina and Georgia studies have found out that since they have eliminated payday-lending loans hay have more bounced checks, complained about more lenders and debt collectors, and have filed for chapter 7 bankruptcy at a higher rate then before. ...
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...2012-2013 PAWNSHOPS AND BEHAVIORAL ECONOMICS 193 PAWNSHOPS, BEHAVIORAL ECONOMICS, AND SELF-REGULATION SUSAN PAYNE CARTER* AND PAIGE MARTA SKIBA** I. Introduction Pawnbroking is the oldest source of credit.1 There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University...
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...A Feasibility Study of Establishing a Pawnshop in General Santos City CHAPTER I INTRODUCTION This chapter discusses about the background of the study, rationale of the study, objectives of the study, significance of the study and definition of terms. Background of the Study Too many people are in difficulty today due to economic or unstable economy people may find an alternative way to find a solution to their problems, many of them go to the houses of the creditors owing money to be able to meet their needs even in a small amount, but sometimes they cannot borrow money because they have not paid their first loan. So, people will go to other areas to take instant cash. Some will apply a bank loan, and wait for an answer only to be able told that they are denied. That’s why people will go to their local pawnshop for much need help. Pawnshop brokers are seeing people from all walks of life pawning everything that has value that will put the cash they desperately need in their hands when they need it. (www.business.whatitcosts.com) 1 1 Pawnshop is a store which offers loans in exchange for personal property as equivalent collateral if the loan is repaid in the contractually agreed time frame, the collateral may be repurchased at its initial price plus interest. If the loan cannot be repaid on time, the collateral may be liquidated by the pawn shop through a pawnbroker or secondhand dealer through sales to customers. (http://www.businessdictionary.com) As a result...
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...Payday Loans: Helpful or Hurtful Joseph Santini Monmouth University I. Introduction There is a new trend in lower income communities in the United States called payday loans. The popularity of getting payday loans to help to pay off utilities and short term debts. These loans have become controversial and brought on speculation of the ethics of the loans and their practices. There has been legislation brought through state senates on this issue but with heavy lobbying have not be able to see the light of day. The tactics of these lobbyists have also come into question. The overall question to be answered is if payday loans are good for this country. II. What are Payday Loans? Payday loans are defined on Investopedia as a short-term loan with a small borrowing amount and a high rate of interest. The way it works is the borrower writes a post-dated check for the borrowing amount plus a fee for immediate cash. The lender keeps the check until the agreed date which is normally the borrower’s next payday. These loans are also commonly called cash advance loans or check advance loans. (Investopedia) These are attractive to lower income community because the loans offer them money right away before they earn it. The feeling of having physical cash in their hands makes them confident in themselves. This system is great if you can pay the debt off quickly but if you take just a small amount of time to pay the loan the debt can pile up. This is because these loans have...
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...Article Presentation Paper : Money Mutual Payday Loans HRM587 Managing Organizational Change Keller Graduate School Management, DeVry College of New York Professor Shashon Miles Introduction The main issue that necessitated the need for the article to be written was the lack of marketing ethics by Money Mutual. Money Mutual failed to provide proper information to its customers and went a step further to hide behind Montel Williams who was their celebrity endorser. They used the goodwill gathered by Williams over the years to convince the individuals that their payday loans were legitimate. It is important to note that Money Mutual were not the actual lenders, they just connected the lenders to customers who they captured from their lead capture pages. Payday loans can be beneficial to its consumers because it affords them access to emergency loans that they may not be able to obtain from the mainstream lending institutions. Unfortunately, the companies that offer payday loans exponentially overcharge their clients with total disregard to state laws. This is categorized as unethical practice and should be shunned by the government and other lending institutions. Selling Source does business as Money Mutual an online marketplace that matches interested consumers to potential lenders in the specialty consumer finance industry. Selling Source has a portfolio of five industry-leading companies which provides extensive, customizable solutions to develop and manage...
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...Pawnshops, like Central Texas Gun & Pawn in Kerrville, Texas are helpful and friendly community resources. In fact, you’ll find that working with a pawnbroker to secure some quick cash can be easy and professional, especially if you have desirable products to pawn like jewelry, guns, and other firearms. If you’re in a financial bind and looking for a little quick cash, here are the basics on pawn loans from the experienced pawnbroker at Central Texas Gun & Pawn: Securing Your Pawn Loan: A pawnbroker offers a collateral-based loan to customers. In essence, your cash loan is secured by leaving an item of value at the pawnshop like jewelry, guns, firearms, or electronics. The pawnbroker will hold onto your item until you pay back the loan in...
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...compensation), and tax revenues generated. Also the payday lending industry is very much affected by the customers’ economic standing and financial stability because this will reflect on the possible lending to be given Short term economics also affect the industry because the rollovers in price/interest rates tend to increase as transactions are renewed. The current economic status of the area should be taken into consideration, because the employee could pay for more than the initial principal. Competition in the payday industry is very significant in assessing the industry's strengths and weaknesses. It increased due to the relaxation of federal restrictions which led to the entrance of new companies into the industry. These new companies then became competitions against well-established companies in the industry - one of which is Cash Connection. The strongest among the competitive forces in the said industry in accordance with Porter's Five Forces Model is the Potential of New Entrants. Potential new entrants can help liquidate the market which would lead to lower demand in individual stores. The four other competitive forces also affect the overall competitiveness within an industry. The Threat of Substitute Products is the next strongest force; followed by the Competition in the Industry; the Power of the Buyers; and the last would be the Power of the Suppliers. The driving forces that are currently affecting the payday lending industry: A. The increasing cost of...
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...A payday loan is also known as a cash advance loan. It is a short term loan, which can be obtained for emergency purposes. In order to acquire the loan, one has to have; proof of income, a photo and the pay stubs. A payday loan is a short term loan, that can be obtained by a person who is faced with an emergency that requires immediate cash. The loan is also referred to as a cash advance loan. In most occasions, there are a few prerequisites while applying for this loan. These include: a proof of income, photo recognition and the previous pay stubs. Borrowing this loan needs a personal check that is post dated to be written to the lenders of the payday loan. Basically, the exact terms of the loan are evident in the relevant legal documents being presented by the lender. This indicates the annual interest rates late fees and financial charges. Usually, the date in which this loan is due is similar to the date of the borrower's paycheck. Moreover, this loan is flexible and can allow the borrower to extend the terms of the loan when he or she is unable to meet the payment on the due date. This loan is an excellent option for immediate cash; however, the borrower should have the capacity to repay the loan when the date is due. Payday loans feature late charges and high interest rates. This implies that, the interest accrued may equal and even at times exceed the principle amount borrowed. This may be as a result of unregulated interest rates since the loans are from private...
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...and high risk loans. Richard Cordray was appointed by President Obama while Congress was in Winter 2011-2012 recess. The reason for this unorthodox appointment is that the Republican Representatives are against regulations and would not have passed the appointment. Richard Cordray will focus on the following provision in the Dodd-Frank Reform: “Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.” Richard Cordary will target Payday loans first. Payday loans are short term loans that are secured by a future paycheck. The banks typically charge $10 per $100 borrowed for 10 days or 10% every 10 days. The banks claim that this high rate is justified because of the high risk clients. The actual default rate is between 3 and 4 percent. This is because Customers must have checking accounts and must have their pay or benefits check directly deposited into that account. The maximum loan term is 30 days and the maximum loan amount is usually $500. If the direct deposits are not sufficient to repay the loan within 35 days, the bank withdraws the money from the customer’s account even if it overdraws the account, which will also trigger more fees that the borrower must pay. The problem...
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...Introduction It is said that Pawnbroking is the oldest source of credit. (Caskey, 1994) Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. Despite their small principal, however, pawnshop loans are an important tool that many customers use to manage their monthly finances during financial shortfalls. (Carter and Skiba, 2012) In the Philippines, Pawnshop is one of the financial service providers (FSP) that are helping to increase the access to financial services of underserved and unserved. For many Filipinos, pawning is the most convenient way to raise money, easier than securing a bank loan. In the Bangko Sentral ng Pilipinas Report on the State of the Financial Inclusion in the Philippines in 2011, the Banking sector is accounted for more than 80 percent of the total resources of the financial system. This means that the 20 percent are shared by other service providers such as pawnshops, money changers, remittance agents and FX dealers. Some municipalities in the Philippines have no banking presence but have access to pawnshops. While pawnbroking is the main business activity of pawnshops, nowadays many pawnshops are engaging into other auxiliary businesses such as money changing, remittance facilitation, foreign exchange dealership, and bills payment facilitation. Moreover, few pawnshops are offering cash in-cash out centers and offer mobile banking services. Financial economists have produced a large number of theoretical...
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...CHAPTER 1 THE PROBLEM AND ITS BACKGROUND Introduction Pawnshops have been around in one form or another for the past 3,000 years. They offer services similar to those of modern banking institutions including loans, consignments, and storage. A good pawn broker buys items for a reasonable price and sells them at a discount. The pawn industry is about making money, and that means repeat business and reasonable dealings. A good pawnshop will carry a variety of items including jewelry, tools, antiques, furniture, knives, guns, crossbows, camping gear, and everything and anything you could imagine being of value and sellable. Some pawn shops even buy and sell cars, motorcycles, and aircraft. In the Philippines Pawnshop Operation is guided/ covered by Presidential Decree No. 114 Sec. 1-2 as: This decree may be cited as the Pawnshop Regulation Act, which stipulated according to that: “ It is hereby declared the policy of the State to regulate the establishment of pawnshops and to place their operation on a sound and stable basis to derive the optimum advantages from them as an additional source of credit; to prevent and mitigate, as far as practicable, practices prejudicial to public interest; and to lay down the minimum requirements and standards under which they may be established and do business...” The word "pawn" comes from the Latin word "pignus," which means to pledge. When someone has an item of worth on which they would like to receive a monetary loan, they take that...
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...Recommendations Cash Connection is a payday lending institution looking to differentiate itself from its competitors and acquire a large portion of the payday lending industry in order to escape the ill-effects of the impending regulations imposed by the government. The payday lending industry is highly competitive and the task of gaining a large hold on the market is not an easy task. This is why the company seeks to develop a strategy that can efficiently achieve results that not only put Cash Connection on top of the market but also keep it there. Cash Connection has proven that being the first store in a new market is typically the one most profitable, with secondary stores cannibalizing the first and decreasing over profitability of the group. Despite the fact that there are untapped markets, it would seem that expanding is not the best option right now. Cash Connection has shown a decline in profitability for the past few years that would make opening more stores impractical due the financial burdens they would place on the company. That doesn’t mean that expansion has to be counted out, it just cannot be the focus of the strategy as a whole. A strategy that increase the revenues generated by existing stores while taking customers away from competitors would provide the foundation for increasing the number of locations available for Cash Connection to do business. By repeating this cycle, Cash Connection should be able to gain an upper hand on the payday lending industry. In order...
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...that you want? They offer books, clothes, electronics, household goods, toys and many more. Yes a lot do appeal to me there are goods for all ages and interests. Im not sure what a fair exchange would be, it would have to depend of what sort of food you were getting and how much of it. 4. Is there a listing asking for something you have to exchange? Im not sure if there is one then it is easily found. 5. Why do you think there is a membership charge? There is probably a charge because your continuously using their services. 6. What do the organisers try to ensure that people use the site honestly? By providing photographs and illustrations of your work. Wonga 1. What is Wonga? Wonga is a British Payday loan company. 2. What is the FCA? The FCA is the financial conduct authority. 3. Do you think that this article has affected Wonga’s amount of customers and why? Yes because it makes customers think can they trust this company to help them and give them a lawyer who is actually qualified. 4. In your opinion is Wonga an ethical business and why? No because In my opinion I don’t think they provide a good quality service to their...
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