Difference between revisions of "Innovative personal finance products demo prep"
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==== Lack of public education ==== | ==== Lack of public education ==== |
Revision as of 00:48, 6 January 2007
India: Overview
Overall economy
Household credit
Household leverage
- This indicates a bias towards assets based leverage than leverage on incomes in India.
- Rising incomes in India thus indicates towards tremendous opportunities for loans based on 'income potential' on either side (a) asset creation side and (b) Liablity creation side. Also, fuelling of (a) will in parallel give rise to (b).
Demographic dividend
- India's population is extremely young
- 50% of the population is under the age of 25, while 2/3rd is under the age of 35
- Over the next several decades, India's young population will strengthen the workforce
Education
- Literacy levels are extremely low in India
- Education is in high demand
- Public education system is broken and private education is extremely expensive
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Personal income
- In some areas of knowledge services, salaries in India are coming close to American salaries in Purchase-Power Parity (PPP) terms
- The top end of over 700,000 people out of India's population of over one billion is estimated to have individual liquid wealth of about $1,00,000 (Rs 44,13,000) which is likely to go up to $1.1 million by 2009. This represents a cumulative liquid wealth of $203 billion, estimated to go up to $322 billion by 2009. These are the findings of a recent study done by market research firm Synovate.
Ideas
Loans
Trends
India - A consumption boom is taking place
- According to study by Bank of Baroda, India is riding a CAGR growth in excess of 35% for the last 5 years in 'retail loans' category
- Despite this, the penetration of credit products as a % of GDP is still very low
- Reasons could be (a) credit aversion (b) no distinction between good and bad paymasters (c) propensity to save is high due to insecure healthcare and social security concerns.
Lack of public education
- Picture: Children in immaculate school uniform...
- Text:
Expensive weddings
Gold - Helping India's middle class create assets while enjoying lifestyle
- Jewellers in India give lose guarantees that upon return of the jewellery, value of the metal in jewellery adjusted for workmanship costs will be redeemed. This acts as a big incentive for people to invest in jewellery as principal amount is secure. However, there is no formal guarantee mechanism to ensure the contract.
- This can be an opportunity for banks to step in, whereupon the banks can underwrite the value of the jewellery and assure full value upon jewellery redemption. Banks can extend loans to people to buy jewellery, whereby interest is charged differently for the value of the metal (lower interest rate) and higher for the loan against workmanship.
Microfinance
Peer-to-peer banking
Kitty parties
Islamic banking
Ideas
Education loans
- Tie up with educational institutions INCLUDING primary schools
Wedding loans
Streamlining microfinance
Loans based on gold
Insurance
Trends
Aspirational society
- Picture: How many homes have a...
- Text:
No medical coverage
- Picture:
- Text:
Increasing savings rate
- Picture:
- Text:
Ideas
Insurance as a saving vehicle
- Picture:
- Text:
Rural Insurance - an opportunity or a risk?
- Seasonal premium collection system in line with harvest season, with no lapse of policy in case of seasonal fluctuations (affecting crops) can be organized
- Distribution of agents can be ramped up by tying up with Fertilizer dealers, Tractor dealers etc.
Credit
Trends
Increasing savings rate
- Picture:
- Text:
Increasing purchasing power
Rural demand for credit
Remittances
COD (???)
Growth in retail
Mobile phone and technology penetration
Ideas
Debit cards
- Picture:
- Text: Linked to checking accounts
Mobile ATM
- Picture
- Text:
Credit cards linked to US accounts
- Credit cards in India based on credit-rating of NRI