Team Jagerbomb Team Code: SPJI1348

Team Jagerbomb
Team Code: SPJI1348
Gayatri Patkar
Neha Pareek
Siddhant Masson
INTRODUCTION
Axis Bank has 271
branches in rural &
unbanked markets
Third Largest Private
Bank in India
Caters to Large & Mid –
Corporates, MSME,
Agriculture & Retail
Businesses
Axis Bank wishes to establish itself as the bank of choice for Rural India
which caters to the needs of rural consumers. What should be the Product
Mix, Distribution Strategy, Business Strategy & Communication Strategy
for the bank to operate profitably in this market?
Haryana, Tamil Nadu,
Punjab, Andhra Pradesh
& Gujarat have 66% of
total rural & 78%
unbanked rural
branches
Present across 23 states
in India
1947 Branches & 11,
245 ATMs across India
Product Mix
CONSUMER DURABLE MARKET
Rural Consumer Durables industry has been
growing at a rate of 30% CAGR over the past 3
years.
Compared to 9-12% in urban India.
Share of Rural Market in
Consumer Durables
35%
It is expected to grow at a rate of 45% CAGR in the next 5 years.
FINANCING CONSUMER DURABLES
Not Feasible:
Lower demand and
low token size for
measurable returns
Demand already
met through auto
loans
GAP AND
UNMET
DEMAND
FOR OTHER
MEDIUM
TOKEN
DURABLES
PRIMARY INSIGHTS
Preference for financing Durables
0
5
10
15
20
25
30
35
40
Sewing Machine
Mobile Phone
Pressure Cooker
Ceiling Fan
TV
Mixer Grinder
Iron
PCs
Refrigerator
Washing Machine
•
84% of respondents belonging to SEC D/E category want to finance durable items with price points
above Rs. 2000/. More than 3 quarters of these respondents would like to avail EMI options
•
90% of the respondents were unaware of EMI options available for some feature phones above
Rs. 5000/.
•
Most of these participants had an aspiration to own a TV but were not able to take loan to buy this
•
Pressure cookers and ceiling fans are surprisingly very high on aspiration but only a few prefer to
pay a lump sum. The same respondents would prefer paying in instalments
PRIMARY INSIGHTS
Preference for financing Durables
0
5
10
15
20
25
30
35
40
Sewing Machine
Mobile Phone
Pressure Cooker
Ceiling Fan
TV
Mixer Grinder
Iron
PCs
Refrigerator
Washing Machine
•
Despite receiving electricity for only 15 hours a day; more than 50% respondents said they
would like to own a mini-fridge
•
6 out of every 10 women working for local garment subcontractors work on rented sewing
machines. The rent they pay is 30% higher than the expected EMI they would pay for a
period of 6 months
•
68% of all the above respondents were willing to pay a premium interest on delayed
payments, but prefer longer cycles
CORE ISSUE
Most buying decisions are
postponed to more than 4 months
This is primarily attributed to the at that
point affordability to make spot payment
Capturing these respondents can increase the volumes drastically, by not only
ensuring forward buying but giving a distinct advantage to capture share from rival
durable companies
CHALLENGES TO OVERCOME
OTHER INSIGHTS
Most women rely on microfinance loans, but are
unable to use these for productive assets. They
face domestic issues on spending these loans.
Almost all women we interviewed were
convinced that loans tied to durable items
like Sewing machines, Iron, pressure cooker,
grinder etc. would help not only the families
lead a better life, but also ensure repayment
They feel they can earn through these durable assets like mixer grinder, sewing machines etc.
CURRENT CHALLENGES
• Options to finance TVs, Mobile Phones etc. through credit card option does exist
• However these are driven by the Durables company and involves tying up with service
provider bank offering credit card EMI options
• As a result the penetration of these EMI backed purchases is very low in tier 2 or 3 cities
• There is no single source for financing these durables
• Credit card back EMI for phones costing more than INR 10,000 is not only feasible but also
profitable
• However, these options are not available for table fans, sewing machines, pressure cookers,
refrigerators etc. through a common provider
AXIS’S NEW PRODUCT: FINANCING CONSUMER DURABLES
AXIS GRIHYA SAMRIDHI LOANS
“Ab Kal nahi…. Aaj laaiye apne ghar mein khushiyon ka khazana”
Offering financing options from mobile phones to sewing machines,
from air cooler to refrigerators, from pressure cooker to LED TV…
“Ab poore saal diwali manaiye, apni zindagi aaj jiye… Axis
Grihya Samridhi loans ke saath”
BUSINESS PROPOSITION
NEW AXIS PROPOSITION
 Being a provider of financing options for consumer durables for the range of
products between INR 2,000 to 60,000
 Business Model  Returns and methodology for interests same as the current
microfinance products offered by AXIS
 Collaborating with consumer durable companies, equally keen to tap the rural market
 Sharing marketing and distribution costs with these companies
 A win-win for the customer, AXIS and our partners (Consumer Durable companies)
In simple words it is giving a microfinance loan but for a durable product for the end
customer; induce forward buying of items of our partners, eliminate postponement of
buying rival’s products or not buying at all.
It addresses the issue of improper allocation and expenditure of microfinance loans
causing domestic problems by helping our customers get access to valuable asset in
the form of durables improving their lives
PARTNERSHIP TO EXECUTE
PARTNER WITH SOME OF THE BIGGEST INDIAN CONSUMER DURABLE FIRMS
Leverage partner’s strengths to reach inner India, collaborate to provide them what
they deserve now… not tomorrow with Axis Grihya Samridhi financing solutions
• Specialized product offerings
• Joint Ventures
• Alliances
FINANCIAL INCLUSION FOR FARMERS
 Only a mere 1/8th of the Indian farmers avail bank credit
 They rely on local money lenders, where interest rates are as high as 30%
 Agriculture requires timely credit to enable smooth functioning
 Nationwide, the farmers’ suicide rate (FSR) was 16.3 per 100,000
farmers in 2011.
 Much higher than 11.1, which is the rate for the rest of the population.
And slightly higher than the FSR of 15.8 in 2001.
PROBLEM
GAP
Poor monsoons remain the single biggest source for crop destruction and
hence farmer suicides
On a good monsoon season an
average farmer earns nearly 40%
more than normal monsoon,
whereas on a poor monsoon season
the income drops to less than even
half
OPPORTUNITY
Monsoon Linked Crop Insurance Scheme
MONSOON INDEXED INSURANCE SCHEME
RISK 
Weather Risk
Weather Risk
Misc. Risk
Misc. Risk
Crop Disease Risk
Crop Disease Risk
Farmer Health Risk
Farmer Health Risk
Price Risk
Rainfed Farmer
Price Risk
Irrigated Farmer
Crop Insured Farmer
60% of all Indian Farmers do not have irrigation, a huge addressable market with
119 million farmers in total, 7/8th of whom are unexposed to banking
METHODOLOGY
 Contracts written as per local weather
outcomes
 Indexed against normal rainfall for that
region as per nearest weather station
 Premium and insurance correlated with
rainfall levels
 Example: In case the rain is 60% below
normal, the payment is proportionally
indexed to the sum assured
 And premium in case of good monsoon
is index up to only a limit of certain %
above normal
•
•
•
Risk Mitigation
Risk pooling by reinsuring these across
different regions, states
Can be tied up with Axis’s existing
programs for farmers like Krishi
Can also be transferred at Global
Weather Risk market maker
AXIS’s NEW PRODUCT – CROP INSURNACE
KRISHI
SURAKSHA
Ab humari khushiyan mausam par nirbhar nahi
A unique Monsoon Indexed Crop Insurance scheme for the farmers of India
MODEL & AXIS’S NEW ECO-SYSTEM
AXIS Crop Insurance
Reinsurance
Global Weather Risk
Market Maker
Weather Insurance Contract
AXIS
Krishi Savings Account/Current Account
Repayment, deposit of
excess
Equipment finance and credit
AXIS
Kisan Power
Farmer Community
AXIS
Power Trac
Produce
Market Linkage
with retail,
processor,
exporter
DELIVERY AND PROMOTION OF KRISHI SURAKSHA
DISTRIBUTION AND MARKETING THROUGH PARTNERSHIP
AXIS could tie up with Telecom providers, with whom it is already providing
remittance services
or
associate with IFFCO Kisan Sanchar Ltd (a JV between Airtel and IFFCO – Indian
Farmers Fertiliser Cooperative Limited)
IKSL
Daily updates on mandi prices,
farming techniques, weather
forecast, fertilizer availability
Telecom
Provider
Network
 Krishi Suraksha can be
promoted along with these
daily updates which farmers
receive
 A launch campaign with
delivery of free phones and
explanation of Krishi Suraksha
 In case of poor weather
forecast during a season – this
could be used as a delivery
medium to sign up for this
insurance scheme
KRISHI SURAKSHA – A WIN-WIN FOR EVERYONE
Kisan Power
Powertrac
Krishi Accounts
 Insured against
catastrophic
events
 Maintains
creditworthiness
 Income swing
smoothens
 Builds up savings
Lesser default rates
Improvement in collateral
Increased lending amounts
Increased confidence among
customers
 Improved brand perception
 Increase business for
Powertrac and Kisan Power
due to more stability and
greater lending amounts
 Increased loyalty through
multi year savings program




 Benefits from
stabilized farmer
incomes through
lower emergency
outlays
 Higher overall
productivity through
better financial
position of farmers
PRODUCT PORTFOLIO ENHANCEMENT - EDUSERVICES
Thousands
India - Annual Intake Capacity
Gross Enrolment at Tertiary Level
7250
6250
5250
4250
3250
95%
2250
1250
27%
250
Diploma/Post Engineering
Diploma
Science,
Medicine,
Agriculture
Management
Technical
Degree
Current Statistics say:
• 96.5% of all rural children between the ages of 6-14
were enrolled in school.
• 83% of all rural 15-16 year olds were enrolled in
school.
This implies
- Greater focus on education.
- Greater need of access to higher education.
- Greater need of Quality of education at secondary
and tertiary level, accessible to all.
World Avg
USA
27%
20%
China
India
Main bottlenecks identified :




Access to quality education
Lack of financial support
Stringent admission procedures
Prioritizing of income generating
jobs over education.
PRODUCT PORTFOLIO ENHANCEMENT - EDUSERVICES
Currently, Axis Bank offers affordable Education Loans of upto Rs. 10Lakhs in India.
We recommend that Axis bank ties up with Educational institutions that provide
technical and/or managerial education in the field of Agribusiness and Family
Managed Business to accept Axis Bank testimonials for certain students.
1.Offer EduServices to existing clients in rural India for courses that can help the
clients in their current business;
2.Axis offers a testimonial letter to clients. Based on this, institute accepts to interview
the candidates for the desired course, subject to admission calendar & the student
meeting the minimum qualification requirement;
3.If found acceptable, client is offered a seat in the course in the following academic
year;
4.Client can opt for an Axis Bank Education Loan, or decide to self-finance the fees.
EDUSERVICES – GROWING WITH THE CLIENT
Customer
• Access to higher
education institutes
• Merit based selection
to a course that will
help them grow their
business
• Easy linkage of
education loan to
their current Axis
Bank savings account
Institute
• Access to focused
students with
experience
• Merit based selection
• Increased batch
strength
• Promotes diversity in
students
Bank
• Gain the trust of the
customer
• With enhanced
knowledge, customer
will be able to grow
his business, and in
turn his association
with Axis Bank
• Increase in Education
Loans off-take
Distribution Strategy
BRANCHLESS BANKING
AXIS Village ambassador
 Appoint and train a member from target
villages to be the Axis village ambassador
 This will be the single point of all transactions
for all village consumers
 With a laptop and data card, the ambassador
will hold transactions for all consumers
online
 The village consumers will receive their
banking account details and enquiry through
a VAS application on their mobile phones
 The consumers can get in touch with the
village ambassador through the mobile VAS
application
 The village ambassador has a special software
to view requests received through VAS
platform and details of the account holders
 For cash transactions, a biweekly (or
depending on requirement) visit will be made
by AXIS to the village
REACHING OUT TO THE MASSES : SHG – BANK LINKAGE PROGRAM
The SHG-Bank Linkage Programme, institutionalized by RBI in 1992, has the following
objectives:
•
•
•
•
To develop mutual faith and confidence between the rural poor and bankers
To combine sensitivity, flexibility and responses of the informal credit system with the
strength of administration capabilities, technical strength and the financial resources of the
formal financial institutions
To expand credit flow/ financial services to the rural poor with less transaction costs
To alleviate poverty and empower the women
In order to promote the SHG – Bank Linkage Programme, RBI has proposed several benefits
to banks that adopt the practice.
The highlights:
•
•
•
•
Separate Segment under priority sector
Margin and Security Norms
Documentation
Interest rates
CURRENT MODELS OF SHG – BANK LINKAGE PROGRAM
I. SHGs formed and
financed by banks
• Banks themselves take up the work of forming and nurturing the
groups, opening their bank accounts and providing them with bank
loans after satisfying themselves as to their maturity to absorb
credit.
• Upto March 2006, about 20% of the total number of SHGs
financed was from this category.
II. SHGs formed by
NGOs and formal
organisations but
directly financed
by the banks
• Groups are formed, nurtured and trained by NGOs (in most cases) or
by the government agencies.
• The bank provides credit directly to the SHGs after observing their
operations and maturity to absorb credit.
• About 70% of the total number of SHGs is financed under this
model.
III. SHGs financed
by banks using
NGOs and other
agencies as
financial
intermediaries
• NGOs promote the groups, nurture and train them and then they
approach banks for bulk loans for further lending to SHGs.
• Banks take the sole responsibility for promoting, developing and
financing SHGs.
• Requires considerable effort by the bank staff towards the
formation of SHG. This model is not so encouraging.
CURRENT ISSUES IN SHG – BANK LINKAGE PROGRAMME
Livelihood promotion among members of SHGs
• Banks have to make significant investments in promoting and
sustaining Livelihood initiatives for SHGs
System for monitoring of SHGs
• The monitoring and scrutinizing of SHGs requires time and
investments, both monetary and effort, hence not a lucrative option
Capacity Building of SHG Members
• SHGs take time to evolve in size and capacity, hence it might take
several years before a SHG becomes significant contributor to bank
operations
Low bank loan per SHG member
• The cost of servicing for SHG Loans is sometimes extremely high,
making it a costly mode of distribution
Micro insurance products
CURRENT ISSUES IN SHG – BANK LINKAGE PROGRAMME
Currently, the high cost of servicing and
distribution, along with the risk of estimating
the credit worthiness of customers as well as
the high risk of non performing assets make
any SHG – Bank Linkage model unpredictable.
Further, managing relations with so many
SHGs, catering to different geographic regions
and social causes, is an additional overhead.
The possibility of a defaulting SHG further
increases the unpredictability and financial
risk for a bank.
Milaap – making lending personal, transparent & sustainable
Milaap is a micro-lending organization that partners with proven, credible grass-root level
organizations (called ‘Field Partners’) to identify deserving borrowers, the amount of financial
assistance they need and the purpose.
Post a 5 step scrutiny,
Milaap Ties Up With A
Local Partner, called
‘Field Partner’
Milaap provides
Repayments to
Lenders
Field Partners Upload
Loan Requests
Borrowers Repay
Their Loans, with an
interest charge that
varies from 5-12%
Lenders Browse Profiles
and Lend, through
credit/debit cards, net
banking, paypal etc
Milaap Disburses
Loans To The Field
Partner
Since 2010, Milaap has raised $840,692, disbursed 5359 Loans with 100% repayment rate
PARTNERING WITH MILAAP & OTHER MICRO-LENDING ORGANIZATIONS
As a financial institution, Axis bank can partner with micro-lending organizations by
Level 1 -> In kind partnership by absorbing the transaction processing fees, secure payment
solutions and funds disbursement
Level 2 -> Financial assistance by matching funds collected by Milaap in an appropriate ratio. Eg.
For every $500 collected by Milaap, Axis will loan $500 to fun a $1000 loan requisite
raised by a field partner
Level 3 -> Consulting Partners – Provide consulting services by supporting Milaap projects with
financial data and service assistance
Benefit to Axis Bank
Benefit to Milaap
1. Utilize Milaap’s expertise in field partner
selection process.
2. Access to over 52 NGOs/SHGs that work in
the field of are Milaap’s field partners with
a 100% repayment history
3. Reach out to potential customers who
require loans of higher amounts that are
not easily serviced by Milaap’s model
4. Minimizing risk of non-performing assets
through Milaap’s secure processes.
1. In- kind benefit – absorption of transaction
fees
2. Increased availability of funds that will
help them reach out to more field partners,
and in turn more number of loan seekers.
3. Possible scaling of current model to
include more social cause-led NGOs/SHGs.
4. Access to technical expertise of Axis Bank
in secure loan processing and disbursal.
Communication Strategy
IDENTIFYING THE MARKETING & COMMUNICATION OBJECTIVES
Marketing Objective
To improve the presence and
penetration of Axis Bank in the
rural sector thereby increasing
account conversion within the
rural India
Communication Objective
To increase the awareness of
Axis bank and its products in
rural India through product
education thereby increasing
brand preference and recall
IDENTIFYING THE TARGET AUDIENCE
Established
and satisfied
Aspiring
Struggling
1. Men and women in the
age group of 25 to 55
2. With school going
children
3. Self employed
(entrepreneur) or
working in the
agriculture or service
sector
4. Aspirers; hard working,
those who want a better
future for their children
INSIGHTS
Rural Insights
1. People are not aware of the
schemes offered by Axis Bank
2. People in rural India are aware of
certain schemes but are hesitant to
take loans
3. Deep rooted caste system prevents
all villagers from availing loans or
financial services
TARGET BUYING INCENTIVE
I will avail financial services from a
bank if they provide me with correct
information and easily accessible
services that I can use to build a
brighter future for my family and
loved ones
INTEGRATED MARKETING COMMUNICATION
MITR Campaign
Mitr
He is a friendly, resourceful agent from Axis Bank who
travels into the interiors of India educating people
about financial services. He dresses simply and can
establish a good rapport with villagers immediately.
He is a trusted advisor for many in the village and he
helps Axis establish a long lasting trusted relationship
with many villagers
MEDIA TO BE USED
OOH (Billboards,
Rickshaws, buses and
trains)
Radio (AIR)
News Paper, Brochures and
Pamphlets
Village Fairs, Mitr education
sessions, door to door service
PRE LAUNCH (RURAL BOARDS)
Aa raha hu mein….jald hi aapse dosti
karne
PRE LAUNCH (BUS ADVERTISING)
Aa raha hai ek anokha mitr, jo
aapke sabhi pareshanio ko
door karega
PRE LAUNCH (RICKSHAW ADVERTISING)
PRE LAUNCH (RADIO ADVERTISING)
Arre Chintu ki maa
aap ye itni mithaiya
kyu bana rahe ho?
Koi jashn hai kya?
Arre waah, yeh toh
badi achi baat hai.
Paar kaise?
Haan aisa hi
samajhiye Chintu ke
bapu, kuch hi dino
mein gaon mein
jashn jaisa mahol hi
hone wala hai?
AIR FM Radio
Voice Over
Ab ap akele nahi. Aa raha hai apke gaon,
ek anokha mitr. Aapke Mitr ko milne
jaroor aiyega (date and venue)
Arre Chintu ke bapu
aapko toh kuch pata hi
nahi hota. Arre humare
gaon mitr aane wale hai,
aur log kehte hai ki woh
saab pareshania door
kar dete hai
LAUNCH – TWO DAY WEEKEND ACTIVATION
Launch across 5 states in 5 towns each
Each town to have 2 Mitrs travelling to it
Punjab
Gujarat
Tamil Nadu
Rajasthan
Maharashtra
9 a.m.
Day 1
Day 2
Village
gathering and
introduction
10 a.m.
11a.m.
12p.m.
Extensive explanation of
financial services provided
and their benefits
Small village fair held for simulation
1 p.m.
*
*
2 p.m.
3 p.m.
Enrolling
Explanation
for the
of simulation
game
game to
simulation
further
to be held
improve
the next
understandi
day
ng of system
Declaration of winner.
Doubt solving and
brochure distribution
AAO KHELO APNE MITR KE SAATH – SIMULATION GAME FAIR
Pre requisites
1. Meeting with village seniors (panchyat)
2. Booking of town hall for two day activation
and fair
3. Arranging for the Axis help desk setup
Rules of the Game
1. Villagers make a team of 4 members each
2. A maximum of 5 teams can be made
3. Each team will be loaned an amount of Rs 500
4. The fair will be held for 5 hours
5. Each team has to return a minimum sum of Rs
100 at the end of each hour
6. A team is allowed to return more than Rs 100 at
the end of each hour
7. The team that is capable of returning all money
the fastest wins and gets a cash prize of Rs.5000
8. During the fair each team can take guidance
from the Axis Bank Mitr who will be a mentor
Help Desk
1. All day help desk to be set up during
the two day activation
2. Services to be provided
1. Financial consulting
2. Query Solving
3. Educating and imparting
information
3. Brochure Distribution
LAUNCH (BROCHURE)
POST LAUNCH: TARGETING FEEDER VILLAGES
•Targeting villages that act as junctions for
villagers with population of 10,000
•A fortnightly visit will be made by the Axis
bank Mitr over the weekend to educate
customers on the services provided by banks
in general and their benefits
Village-2
Village-1
Feeder
Village
Village-3
Village-4
Duties to be Performed
•Arrange for village gathering
•Distribute pamphlets
•Encourage discussion
•Teach by using simple examples
•Solve queries
•Service customers who want avail financial products
POST LAUNCH- EK SAFAR MITR KE SAATH
Front Side
Aiiye lijiye Ek Safar Apke Mitr Ke Saath
Ek Safar Mitr ke Saath
1.
2.
3.
4.
Tying up with the railway , local and state bus
services
Publicity of Axis bank activity at railway
stations and bus depots
Tapping into journeys by rail or road that are
approximately two to three hours
Providing of the Axis bank program during the
journey along with the ticket with the Mitr’s
name and contact details
Ek Safar Mitr Ke Saath
Back Side
Agenda for the trip here
Duties to be Performed by Mitr
•Distribute pamphlets
•Give a brief of all financial services
•Explain through simple examples
•Solve queries if any
Ek Safar Mitr Ke Saath
POST LAUNCH: TAPPING INTO LOCAL EVENTS
•Targeting local music groups that
travel from town to town to impart
knowledge
•Targeting street plays
•Tapping into villages by educating
village panchayat so that they can
further influence villagers and educate
them about the financial services
provided
MITR CAMPAIGN TIMELINE
Jan
Feb Mar Apr May Jun Jul Aug Sep Oct
Nov
Dec
W1 W2 W3 W4 W1 W2 W3 W4
Billbords, Bus
+Rickshaw
2013
Mitr Launch, Two
day activation with
village fair
Radio
Brochure
Advertise
Distribution
ment
covering 25 cities
W1 W2 W3 W4
Radio publicity for
Ek safar Mitr ke
saath
Fortnightly visit by
Mitr to target
Ek Safar Mitr villages. Set up of
Ke Saath help desk to service
2014
customers,
educational talks +
street plays and
Railway + Bus
music shows
BillBoards
MITR CAMPAIGN BUDGET
Channel
Duration
Frequency
Cost
Radio
2 weeks
11 a.m.- 1 p.m. , 2
times/hour, 5p.m.-7p.m. 3
times/hour
235200
Bus Boards +
Rickshaw Boards
1 month
125 boards in 25 towns
across 5 states
255000
Billboards
1 month
50 across 25 towns in 5
states
226000
Continuous
34000
Continuous except 1st
month
Additional Cost
Number
Brochure
Cost/month
Number of months
Cost
Mitr
50
5000
6
1500000
Travel Allowance
50
1000
6
300000
Total
1800000
Final Cost
4350200
SUMMARY
PRODUCT MIX
Financing Consumer Durables – AXIS Grihya Samridhi Loans
Monsoon Index Crop Insurance – AXIS Krishi Suraksha
Education tie-ups and loans – AXIS EduServices
DISTRIBUTION STRATEGY
Resource sharing, IKSL, Consumer Durable
companies, SHGs and Milaap
Branchless Banking through – AXIS Village Ambassador
Program
COMMUNICATION
STRATEGY
Integrated Marketing Campaign – educating
the customer and showcasing the products –
MITR
Thank You