Data Analysis and Interpretation

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4.1 Brief Profile of Surat

4.2 Data Analysis and Interpretations

Section- (A

)

Simple Tables

Section- (B) Two Way Tables

Section- (C) Association Between Various Characteristics

Chapter – 4

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Chapter – 4

Data Analysis and Interpretation

==============================================================

As mentioned earlier, in this study 100 respondents, who have taken home loan during the period of 2009-2010 from BOB and SPB in Surat City, have been selected. Before analysing the collected data, it is important to know something about Surat City.

4.1 Brief Profile of Surat

Surat is a city located on the Western part of India in the State of Gujarat. It is one of the most dynamic cities of India with one of the fastest population growth rate due to immigration from various parts of Gujarat and other states of India.

History

The city of Surat has a glorious history that dates back to 300 BC. The origin of the city can be traced back to the old Hindu town of ‘Suryapur’ during 1500 – 1520 A.D., which was later colonised by the Brigus or the King from Sauvira on the banks of the river Tapti. In 1759, the British rulers took its control from the Mughals till the beginning of the 20th century. The city is located on the river Tapi and has about 6 km long coastal belt along the Arabian Sea. Due to these reasons, the city emerged as an important trade centre and enjoyed prosperity through sea trade in the 16th, 17th and 18th centuries. Surat became the most important trade link between India and many other countries and was at the height of prosperity till the rise of Bombay port in the 17th and 18th centuries. Surat was also a flourishing centre for ship building activities. The whole coast of Tapi from Athwalines to Dumas was specially meant for ship builders who were usually Parsis. After the rise of the port at Bombay, Surat faced a severe blow and its ship building industry also declined. During the post-independence period, Surat has experienced considerable growth in industrial activities (especially textiles) alongwith trading

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activities. Concentration of these activities, combined with residential developments, has resulted in considerable expansion of the city limits.1

The city is a pivotal centre on the Ahmedabad-Mumbai regional corridor as well as on the 225 km long industrial belt, having direct linkages with the industrial urban centres of cities like Vadodara, Ankleshwar and Vapi. National Highway No. 8 passes within a few kilometres of the SMC boundary and is one of the busiest inter-state trunk routes in the country. The summers are quite hot with temperatures ranging from 37oC to 44oC. The climate is pleasant during the monsoon, while the autumn is temperate. The average annual rainfall of the city is 1143 mm.

Shree Premchand Raichand started first bank in Surat in 1864 namely “Bank of Surat”. In the next year the Bank of Gujarat Commenced operations in this historic city. Surat is known by several other names like “THE SILK CITY”, “THE DIAMOND CITY”, “THE GREEN CITY”, “THE CLEANLIEST CITY”, etc. Surat has practically zero percent unemployment rate and jobs are easier to get here due to very fast development of various industries in and around Surat City.

Today, apart from the traditional industries of textile manufacturing, trade, diamond cutting and polishing industries, intricate zari works, the base has expanded to gas based industries at Hazira. The events since the 1960’s, seen in the city and the region, have resulted in a spurt in urban population in the city. Surat continues to present a 6% plus annual population growth since 60’s, placing Surat 9th in terms of size countrywide (2001).

Table 4.1 Population Size for the Year 2011

City Population Ahmedabad 72,08,200 Surat 60,79,231 Vadodara 41,57,568 Rajkot 37,99,770 Source: www.census.gov.in 1 www.wikipedia.com

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During 1991-01, the city experienced an exceptionally high decadal population growth rate of 85.09 percent. Rapid inflow of population is continuing. Population of Surat city is 60,79,231 lakhs, approximately.

Parallel to the industrial expansion, Surat emerged as a major centre for trade and commerce in the region and a silent evolution has been that of the informal sector. Surat also has many industrial Giants such as KRIBHCO, Mammoth Fertilizer Plant, Reliance Petrochemical Plant, Essar 10 Million Tone Steel Plant, Shell LNG Terminal. All this at Hazira and ABG shipyard and Ambuja Cement at Magdalla port. Whereas Torrent power plant and GIPCL have got a huge lignite power plant in Kamarej area. While the city had a vibrant economy, the focus was on growth with limited response to housing and services and the local administration did not translate benefits of growth in terms of a financially robust local administration.

The region is one of the leading city-regions in the country that has attracted massive investments of which substantial proportion is under implementation. According to CMIE 2002, the Surat City region has a proposed investment of about Rs. 11,817 Crores. In addition projects worth Rs. 2,022 Crores are under implementation. Hazira and SEZ are major focal points for growth. Given these, the prospects of rapid growth continuing is bright. Much of the industrial development is located within the limits of Surat city. In fact, Surat is truly an industrial city with over 50% of workforce engaged in manufacturing activity. The detailed account of sub-sectors of the economy is presented below approximately:

- 42% of the world’s total rough diamond cutting and polishing - 70% of the nation’s total rough diamond cutting and polishing - 40% of the nation’s total diamond exports

- 40% of the nation’s total man made fabric production - 28% of the nation’s total man made fibre production - 18% of the nation’s total man made fibre export - 12% of the nation’s total fabric production2

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Income Distribution

The average Annual Household Income (AHI) in the city is ` 4.57 lakhs, the highest in the country. Surat’s AHI is almost equal to China’s per capita income of 2007 and double the national per capita income. Even its GDP growth of 11.5% for the many consecutive year is the fastest in the country.3

Growth Prospects

According to CMIE, as on August 31, 2006, there are 1819 projects under implementation with investment of ` 1,34,206 Crores with an estimated employment generation of 2,77,947. Surat district accounts for 26% of units, 21% of investment and 11% of employment being generated through this investment in the state. In addition, recently, the Government of Gujarat organised an Urban Summit. Large number of entrepreneurs signed MOUs (Memorandum of Understanding) to invest in the state in various sectors. In the Surat region, total worth of MOUs signed is about ` 61,450 crores. The majority of MOUs signed belong to urban infrastructure, industrial and real estate sector. The location of these projects is in the areas like Abhava, Kosad, Rundh, Dumas, Vesu, Pal, Magdalla, Kadodara, Amroli and Sachin, which are in the peripheral areas to the municipal boundary.

Real Estate

Housing sector is the most preferred segment in Surat too, like in other parts of the country. Leading property developers are coming up with all kinds of affordable and luxury home to woo buyers from all classes, i.e., that is to cater to the needs of both nationals and NRIs. Though the industrial sector of the city is quite well established, expansion of work is going on in full swing. Even the retail property sector is developing manifold to meet the recreation need of its growing population with number of malls, multiplexes and retail outlets opening up across the city. Builders are taking keen interest in developing property in the Surat city.

Surat has a very high growth rate and there is a huge influx of population at 1000 people daily entering the city hunting for jobs. The city offers a tremendous potential for

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trade and commerce activity. These people need all the urban amenities. In Surat, people living in rented tenaments are as high as 37%. People mostly live in tenament duplex type of dwelling units on an average area of 576 sq ft built-up area with three rooms, whereas in slums the average area is 250 sq ft built-up area with 1.6 rooms.

Due to the rapid industrial growth, urbanization, migration, etc. in Surat, the demand for home loan is increasing day by day. Total housing loan accounts and sanctioned limit in Surat is as shown from this table.

Table 4.2 Total Housing Loan Accounts and Sanctioned Limits in Surat

Particulars 2005 2006 2007 2008 2009 Growth Rates Surat A/C (in Nos.) 16,922 22,717 27,434 32,040 33,451 97.67758 S/Limit (in Lakhs) 54,46,223 88,93,143 1,25,969 1,84,93,128 18,977,333 248.4494

Source: Trend and Progress Report, RBI, 2005 – 2010. A/C: Number of Accounts

S/Limit: Sanctioned Limit

Figure 4.1Total Housing Loan Accounts and Sanctioned Limits in Surat

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2005 2006 2007 2008 2009 A/ C N u m b e rs

A/C

A/C 0 2000000 4000000 6000000 8000000 10000000 12000000 14000000 16000000 18000000 20000000 2005 2006 2007 2008 2009

S/Limit

C/Limit

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At Surat city level, the relevant data are not available for various types of banks. Instead, only aggregate data are available for this year. In Surat city number of housing loan accounts were 16,922 in 2005 which increased to 33,451 in 2009 which shows the increase of 97.68%. In comparison, the amount of Sanctioned Limits registered 248% growth i.e. 54,46,223 loan in 2005 to 1,89,77,333 in 2009. In this study, I have selected two banks, namely BOB and SPB. So I have tried to know the amount of sanctioned home loan by BOB and SPB. Table 4.3 and 4.4 given below shows the Sanctioned home loan amount by BOB and SPB.

Total Home Loan Given by BOB

Table 4.3 Total Home Loan Given by BOB

(in Lakhs)

Time Period A/C Sanctioned

Amount A/C Disbursed Amount 01/04/06 to 31/03/07 1,225 6,900.10 NA NA 01/04/07 to 31/03/08 1,517 16,438.29 1,352 13,893.93 01/04/08 to 31/03/09 1,382 17,014.16 1,152 14,430.60 01/04/09 to 31/03/10 1,456 20,001.67 1,283 17,447.86

Source: Bank of Baroda, Surat.

In the case of BOB, from the information provided by the bank, it can be seen that the total amount of home loan disbursed during the year 2007-08 was about ` 139 crores which increased to about ` 144 crores in 2008-09 and to ` 174.48 crores in 2009-10. Thus, unlike SPB in the case of BOB, the disbursed amount continued to rise but the number of customers taking the loan had declined to 1382 in 2008-09 from 1517 in 2007-08.

Table 4.4 Total Home Loan Given by SPB

(in `)

Time Period A/C Sanctioned

Amount A/C Disbursed Amount 01/04/05 to 31/03/06 214 11,78,45,000 347 15,26,24,651 01/04/06 to 31/03/07 354 23,25,66,900 363 19,72,93,268 01/04/07 to 31/03/08 356 26,47,84,881 471 33,31,85,241 01/04/08 to 31/03/09 272 20,41,83,955 226 17,87,76,363 01/04/09 to 31/03/10 266 26,05,82,000 242 22,97,83,471 Source: SPB, Surat.

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The number of customers who were given home loans during the financial year 2005-2006 by SPB was 347, which increased to 363 in the next financial year and to 417 in the financial year 2007-08. However, in the next financial year, i.e. 2008-09, the corresponding number was less than half (226) of the previous year. This may be due to the effect of global melt down on the real estate sector in the fast growing city of Surat. It is to be noted that the number of customers who took home loan from SPB increased marginally to 242 in the financial year 2009-10.

As far as, the disbursed amount of home loan by SPB is concerned, from about ` 15 crores in year 2005-06, it increased to ` 19.73 crores in next year and to ` 33.32 crores in year 2007-08. However, the amount decreased to ` 17.88 crores in 2008-09 but increased to ` 22.98 crores in year 2009-10.

4.2 Data Analysis and Interpretations

The data analysis and interpretation have been divided into three sections.

Section-A is simple tables, Section-B is Two-way tables and Section-C is Association

between various characteristics.

Section- (A

)

Simple Tables

This section focuses on the personal information of the respondents.

(1) Age of the Respondents

The first characteristic of the respondents that is taken into account is the age of the respondent. Table 4.5 given below shows the age distribution of the respondents. It can be seem from the table that almost half (48%) respondents belong to the age group of 31 to 40 years, whereas the next age group in terms of the number was 41 to 50 years to which (22%) of the respondents belonged. 14% of the respondents were above 50 years of age of which 3 were above 60. Thus, 70% of the respondents belonged to the middle age group, i.e. 31 to 50 years.

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Table 4.5 Age of the Respondents

Age of the Respondents (years) Number of Respondents (%)

Below 30 16 16.0

31 to 40 48 48.0

41 to 50 22 22.0

Above 50 14 14.0

Total 100 100.0

(2) Sex of the Respondents

Out of the 100 respondents surveyed, 78% were males and the remaining 22% were females. Thus, the sample was male dominated.

(3) Educational Qualification of the Respondents

Education is one of the most important characteristics of the customers because the perception, awareness and behavior of the customers depend largely on his/her educational qualifications. Among the selected respondents, a majority (55%) were graduates, while 10 had studied upto S.S.C. level and 6 were educated upto H.S.C. and

16 48 22 14 0 10 20 30 40 50 60 Below 30 31 to 40 41 to 50 Above 50 (% )

Age (In Years)

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under graduate levels. Apart from this, 23 respondents had other qualifications like Diploma, etc. The relevant data are provided in table 4.6 below.

Table 4.6 Educational Qualifications of the Respondents

Educational Level Number of Respondents (%)

S.S.C 10 10.0 H.S.C 06 06.0 Under Graduate 06 06.0 Graduate 55 55.0 Post Graduate/Diploma 23 23.0 Total 100 100.0

(4) Occupation of the Respondents

Table 4.7 given below shows the profession of respondents which may also be an important factor affecting the decision making of customers. It was found that half of the respondents (50%), were from the business class, 39% were doing some sort of service, while only 11% were professionals like doctors, C.A., Engineers, etc.

10 6 6 55 23 0 10 20 30 40 50 60 S.S.C H.S.C Under Graduate

Graduate Post Graduate

(%

)

Educational Level

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Table 4.7 Occupation of the Respondents

Types of Occupation Number of Respondents (%)

Business 50 50.0

Service 39 39.0

Profession 11 11.0

Total 100 100.0

(5) Income of the Respondents

Annual Income of the respondents is the most important factor determining their demand for home loan. Table 4.8 gives information on the annual income of the respondents in which the respondents are divided into four income groups. It is found that the maximum number of respondents (32) were in the income group of ` 2.4 lakhs to 3.6 lakhs and the next important income group was less than ` 1.8 lakhs. There were 19 respondents earning more than ` 3.60 lakhs. The minimum and maximum annual income were ` 72, 000 and ` 30,00,000 respectively.

50 39

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Figure 4.4 Type of Occupation of the Respondents

Business Service Profession

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Table 4.8 Annual Income of the Respondents

Income Group ( ` in lakhs) Number of Respondents (%)

< 1.8 28 28.0

1.8 to 2.4 21 21.0

2.4 to 3.6 32 32.0

> 3.6 19 19.0

Total 100 100.0

(6) Type of Family of the Respondents

The demand for housing is affected by an important social factor, viz. type of family. Normally, persons living in a joint family are likely to have a higher propensity to acquire an independent house of their own. Among the selected respondents 77% lived in a nuclear family and the remaining 23% lived in a joint family.

(7) Loan Taken in the Past

In order to analyze the behavior of customers who have taken home loans from the banks, it was necessary to examine whether they had previous experience of taking a loan. The response of the respondents in this regard indicated that only 32% of them had taken a loan in the past and for the remaining 68%, this was the first experience of taking a loan. 28 21 32 19 0 5 10 15 20 25 30 35 < ` 1.8 ` 1.8 to `2.4 `2.4 to `3.6 >` 3.6 (%) In co m e Le ve l ( in ` )

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(8) From which Bank, Loan is Taken in the Past

Table 4.9 From which Bank, Loan is Taken in the Past

Banks Number of Respondents (%)

BOB 3 8.82

Canara Bank 2 5.88

Dena Bank 1 2.94

HDFC Bank 9 26.47

HDFC Bank and BOB 1 2.94

Andhra Bank 2 5.88 ICICI 3 8.82 SDCB 1 2.94 SPB 1 2.94 SBI 9 26.47 Total 32 100

It is found that the largest number of respondents (09) had taken loan from the HDFC bank and SBI earlier. The other important banks were BOB and ICICI.

8.82 5.88 2.94 26.47 2.94 5.88 8.82 2.94 2.94 26.47 0.00 5.00 10.00 15.00 20.00 25.00 30.00 BOB Canara Bank Dena Bank HDFC Bank HDFC Bank and BOB Andra Bank ICICI SDCB SPB SBI (% ) Banks

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(9) Types of Loan taken in the Past

It would be interesting to know which types of loans were taken by the respondents earlier. The information on the type of loan taken earlier by the respondents are shown in table 4.10 given below.

Table 4.10 Types of Loan taken in the Past

Types of Loan Number of Respondents (%)

Home Loan 3 8.82

Personal Loan 6 17.65

Vehicle Loan 20 58.82

Home Loan & Vehicle Loan 1 2.94

Personal Loan & Others 2 5.88

Others 2 5.88

Total 34 100.00

The above table reveals that most of the respondents viz. 62.0% (21 out of 34) had taken loan for buying vehicles. The next important type of loan was the personal loan. Only 8.82% (3) respondents had taken home loan earlier. This indicates that most of the respondents selected in the sample were taking home loans for the first time.

0.00 10.00 20.00 30.00 40.00 50.00 60.00

Home Loan Personal Loan Vehicle Loan Home Loan & Vehicle Loan Personal Loan & Others Others 8.82 17.65 58.82 2.94 5.88 5.88 (% ) Types of Loan

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(10) Sources of Information

An attempt was made to examine the source of information regarding the home loans. Table 4.11 given below, which is based on the information provided by the respondents, gives the relevant figures.

Table 4.11 Sources of Information

Sources of Information Number of Respondents

Advertisement 32 a. Newspaper 06 b. T.V. 09 c. Internet 04 d. Others 13 Total (a+b+c+d) 32 By Bank 37 a. Staff/Agent 23 b. SMS/ Phone Call 08 c. Others 06 Total (a+b+c) 37 Others 83

a. C.A./ Loan Consultant 56

b. Friends 19

c. Relatives 04

d. Neighbour 02

e. Others 02

Total (a+b+c+d+e) 83

It is evident from this table that as many as 83 respondents availed the information about home loans from “Others”, which included 56 respondents who get the information from C.A./ loan consultant, 19 from friends and the remaining 8 from the relatives, neighbours, others, etc. The second most important source of information was

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“Banks” (37 respondents) consisting of 23, 08, and 06 respondents who received information from bank staff/agents, SMS/Phone calls and others respectively. The last important source of information is “Advertisement” from which 32 respondents received the information. In this category others (hoardings, banners, etc.) provided information to 13 respondents while the sources like newspaper, T.V. and Internet were stated as sources of information by only 06, 09 and 04 respondents respectively.

However, in the study undertaken by M.K. Chaubey (2009), it was found that 72%, 18% and 10% respondents came to know about home loan through print and electronic media, friends and relatives and builders/developers respectively. But in my study, the results had shown that only 27% and 25% respondents came to know about home loan through print and electronic media and friends and relatives respectively. However, in my study more respondents (56%) came to know about home loan through CA / loan consultant.

(11) Year in which the Loan was Taken

Table 4.12 given below gives information regarding the year in which loan was taken by the respondents. It is clear from this table that a large majority of them (76) had taken home loan in the year 2010, 24 had taken the loan in the year 2009.

Table 4.12 Year in which the Loan was Taken

Loan taken Number of Respondents (%)

During 2009 24 24.0

During 2010 76 76.0

Total 100 100.0

(12) Term of Loan

The respondents were asked to provide information on the term of loan taken by them. On the basis of the replies given by them, table 4.13 given below was constructed.

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Table 4.13 Term of Loan

Years Number of Respondents (%)

5 to 10 54 54.0

11 to 15 40 40.0

> 15 06 06.0

Total 100 100.0

It can be seen from the table that slightly more than half (54%) of the respondents had taken home loans with terms ranging from 5 to 10 years. For 40 respondents the term was between 11 to 15 years and for the remaining 06 the term was more than 15 years.

In the study of M.K. Chaubay (2009) in Varanasi, it was found that 28%, 14% and 58% respondents opted for, 5 years and 10 years, more than 15 years as a term of loan respectively.

In the study of D. Rajasekhar (2008) in Chennai city, it was found that 54%, 36% and 10% of the respondents preferred the repayable period of more than 10 years, more than 15 years and more than 5 years, respectively.

But in this study only 6% respondents opted for loan for more than 15 years. It may be assumed that in Surat city the level of income is so high that the customers are able to repay home loan in a short period of time.

0 10 20 30 40 50 60 5 to 10 11 to 15 > 15 54 40 6 (%) Y e ar s

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(13) Amount of Loan Applied For

It will be instructive to know about the amounts of loan the customers had applied for. Table 4.14 given below provides information on the amounts of loan applied for. As shown in the table, out of 100 respondents almost 1/3 each had applied for the loan amount between ` 1 to 5 lakhs and ` 5 to 10 lakhs. Thus, about 2/3 of the sample customers had asked for home loans below ` 10 lakhs. On the other hand, only 8 respondents had applied for a loan amount of ` 20 lakhs or more.

Table 4.14 Amount of Loan Applied For

Amount (` in lakhs) Number of Respondents (%)

1 to 5 32 32.0

5 to 10 33 33.0

10 to 20 27 27.0

> 20 08 08.0

Total 100 100.0

(14) Amount of Loan Sanctioned

As against the amount of the loan applied for, one would like to know the amount of loan sanctioned by the respective banks. Table 4.15 gives the necessary information.

0 5 10 15 20 25 30 35 1 to 5 5 to 10 10 to 20 >20 32 33 27 8 (% ) Amount (` in lakhs)

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According to this table, in case of 33, 36, 23 and 08 customers, the amounts of loan sanctioned were in the range of ` 1 to 5 lakhs, ` 5 to 10 lakhs, ` 10 to 20 lakhs and more than ` 20 lakhs respectively.

Table 4.15 Amount of Loan Sanctioned

Amount (` in lakhs) Number of Respondents (%)

1 to 5 33 33.0

5 to 10 36 36.0

10 to 20 23 23.0

>20 08 08.0

Total 100 100.0

Comparing with the earlier table (table 4.15), only in the case of range ` 10 lakhs to 20 lakhs, 4 customers were denied amounts of loan in this range. All the customers who applied for home loans amounting to more than ` 20 lakhs were sanctioned the loan of similar amounts. 0 5 10 15 20 25 30 35 40 1 to 5 5 to 10 10 to 20 >20 33 36 23 8 (% ) Amount (` in lakhs)

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The findings of analysis of simple frequency tables may be summarized as follows:

(1) About 70% of the respondents were middle aged, i.e. 31 to 50 years of age (2) The sample was dominated by males. (78%)

(3) A majority of (55%) respondents were graduates.

(4) Exactly 50% of the respondents were from business class. While 39% were from service class.

(5) The maximum number of respondents (32%) had annual income of ` 2.4 to 3.6 lakhs and 19% had income more than ` 3.6 lakhs.

(6) 77% respondents lived in nuclear family.

(7) 32% of the respondents had taken some kind of loan from the bank earlier and 59% of them had taken vehicle loan earlier.

(8) Most of the respondents availed the information about the home loan from other sources like C.A. / loan consultant / friends, etc.

(9) In case of only 6% of the respondents the term of loan was more than 15 years and for the remaining 94% the term of loan was less than 15 years.

(10) About 2/3 of the sample customers had applied for loans below ` 10 lakhs and 69% respondents were sanctioned loan below ` 10 lakhs.

Section – (B) Two Way Tables

In this section, I have done comparative study of BOB and SPB in respect of different aspects of home loan.

(15) Time Taken for Sanctioning Home Loan

The time taken by the bank for sanctioning the loan is an important factor for the consideration of customers. It also reflects the efficiency of the bank and the staff and stability of the procedure for sanctioning the loan. The relevant data for BOB and SPB also at the aggregate level are given in table no 4.16. It may be seen from this table that in as many as 37 cases the loan was sanctioned within 8 to 15 days and in 30 cases the time lag was 21 to 30 days. Only in 9 cases, sanction took more than a month.

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Table 4.16 Time Taken for Sanctioning Home Loan

Days BOB SPB Total

Upto 7 07 (77.78%) 02 (22.22%) 09 (100.0%) 8 to 15 29 (74.36%) 10 (25.64%) 39 (100.0%) 16 to 20 04 (33.33%) 08 (66.67%) 12 (100.0%) 21 to 30 07 (21.88%) 25 (78.13%) 32 (100.0%) >30 03 (37.50%) 05 (62.50%) 08 (100.0%) Total 50 50 100

Comparing the relevant figures for BOB and SPB it is found that in general BOB had sanctioned the loan within a shorter period. For example, out of 9 cases in which the loan was sanctioned within 7 days, 8 were BOB customers and only 1 was SPB customer. Similarly, for 8 to 15 days duration, 27 were BOB customers and only 10 were SPB customers. On the other hand, for 24 customers of SPB the loan was sanctioned within 21 to 30 days, but the corresponding number was only 6 in case of BOB.

77.78 74.36 33.33 21.88 37.50 22.22 25.64 66.67 78.13 62.50 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Upto 7 8 to 15 16 to 20 21 to 30 >30 (% ) Days

Figure 4.11 Time taken for Sanctioning Home Loan

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(16) Documents Demanded for Home Loan

The respondents were also asked during the survey to reveal the documents which were demanded by the banks alongwith the application form. This was done just to assess the knowledge and awareness of the respondents.

Table 4.17 Documents Demanded for Home Loan

Documents Number of Respondents

PAN Card 94

I.T. Returns 94

Residence Proof 93

Latest Salary Pay Slip 42

Six Months Bank Statement 92

It was found that between 6 and 8 respondents responded negatively when they were asked whether PAN card, income tax returns, residence proof and 6 months bank statements were demanded by the bank. Moreover, 42 respondents said that the Latest Salary Pay Slips were demanded by the bank at the time of processing the loan application.

(17) Property Insurance

Only 4 of the 100 respondents claim that they had not taken property insurance at the time of disbursement of loan. It means that out of the 100 respondents covered in the study, 96 respondents had taken property insurance.

(18) Reasons for Taking the Home Loan

It is important to know the purpose of taking home loan by the respondents. During the survey the customers were asked to reveal the reasons for availing the home loans. On the basis of their responses, Table 4.18 given below was constructed.

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Table 4.18 Reasons for Taking Home Loan

Reasons BOB SPB Total

In place of rented property 06

(50.0%) 06 (50.0%) 12 (100.0%) For investment 23 (62.16%) 14 (37.84%) 37 (100.%)

Desire for big house 14

(40.0%)

21 (60.0%0

35 (100.0%)

To get relief in income tax 23

(69.70%)

10 (30.30%)

33 (100.0%)

To receive rent income by purchase of new house 12 (57.14%) 09 (42.86%) 21 (100.0%) Others 02 (50.0%) 02 (50.0%) 04 (100.0%)

This table reveals that the reasons for taking a home loan in order of preferences were “for investment (37)”, “desire for a big house (35)” and “for getting income tax relief (33)”. There were 21 respondents who wanted to earn rent income by availing home loan. 12 of the respondents wanted to buy a house in place of the rented house in which they had been living.

50.00 62.16 40.00 69.70 57.14 50.00 50.00 37.84 60.00 30.30 42.86 50.00 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 In Place of Rented Property For Investment Desire for Big House To Get Relief in Income Tax To receive rent income by purchase of new house Others (% ) Reasons

Figure 4.12 Reasons for Taking Home Loan

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Examining the bank-wise break-up, it is found that the proportion of customers who took the home loan for investment purpose was much more (23) in the case of BOB as compared to similar number (14) in the case of SPB. Applying for the home loan for “IT relief” also had a similar pattern with the number of customers declaring this as a reason was 23 in case of BOB as compared to 10 in case of SPB. However, the number of customers who had taken the home loan “to buy a big house” was only 14 in the case of BOB with the comparable figure of 21 in the case of SPB. The customers of BOB and SPB who gave the reason such as “in place of rented property” and “others” were equal, (6 in each case).

(19) Types of Property

It will be useful to know the types of property the respondents wanted to buy through the home loans. Various types of property and the corresponding number of respondents who wanted to buy those properties are provided in the following Table 4.19.

Table 4.19 Types of Property

Properties BOB SPB Total

New flat 32 18 50

New bungalow 02 10 12

New row house 08 13 21

Old flat 05 01 06

Old bungalow 01 04 05

Renovation of old flat 00 01 01

Extension of old bungalow 01 0 01

Renovation of old bungalow 01 01 02

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It was found that half (50) respondents wanted to buy new flats while the number of respondents who wanted to buy a new row house and a new bungalow were 21 and 12 respectively. Comparatively, very few customers wanted to buy old flat (6) or old bungalow (5). Moreover, there were only 1 or 2 respondents who wished to renovate/extend their existing flat or bungalow. There were also 2 respondents who wanted to use loan amounts to buy “other” type of property, viz. plot.

In the study undertaken by M.K. Chaubey (2009), it was found that 26%, 34%, 38% and 2% respondents have borrowed loan for purchase of flats, purchase of house, construction of house and other reasons respectively. However, D. Rajasekhar (2008) had found in his study, that 45% of the respondents have bought loan for purchase of house, 37% have bought the loan for purchase of flat, 16% for construction of house and remaining 2% for other reasons.

But in my study, more respondents had taken home loan for purchasing flat (56%) followed by row house (21%). Only 4% respondents opted loan for construction or renovation of flat/bungalow. It implies that in Surat city most of the respondents had taken home loan for purchase of flat because city of Surat is one of the fastest growing city, therefore, the population growth is also high due to migration. Due to scarcity of land, builders prefer to construct high-rise buildings than the row house or bungalow.

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00

NF NB NRH OF OB ROF EOB ROB Others

64.00 16.67 38.10 83.33 25.00 0.00 50.00 100.00 0.00 36.00 83.33 61.90 83.33 80.00 100.00 50.00 0.00 100.00 (% ) Properties

Figure 4.13 Types of Property

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(20) Area (sq. ft.) of the New Flat

Table 4.20 Areas (sq. ft.) of the New Flat

Area (in Sq. ft.) Number of Respondents (%)

500 to 1000 12 24.0

1001 to 1250 14 28.0

1251 to 1500 16 32.0

>1500 08 16.0

Total 50 100.0

It can be seen from the above table that most (more than 60%) respondents have preferred to buy new flats measuring 1000 to 1500 sq. feet. Only 08 respondents were ready to buy bigger flats measuring 1500 or more sq. feet.

(21) Area (sq. ft.) of the New Bungalow

Table 4.21 Areas (sq. ft.) of the New Bungalow

Area (in Sq. ft.) Number of Respondents (%)

350 to 1200 04 33.33

1201 to 1700 06 50.0

> 3500 02 16.67

Total 12 100.0

It can be seen from the above table that 4 and 6 respondents had planned to buy a small size bungalow (350 to 1200 sq. ft.) and medium size new bungalow (1200 to 1700 sq. ft.) respectively. There were also 2 respondents who wanted to buy a bigger size bungalow (more than 3500 sq. ft.).

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(22) Area (sq. ft.) of the New Row House

Table 4.22 Areas (sq. ft.) of the New Row House

Area (in sq. ft.) Number of Respondents (%)

201 to 500 08 38.10

501 to 750 07 33.33

751 to 1100 03 14.29

> 1100 02 09.52

Total 21 100.0

The areas of new row houses that 21 respondents wanted to buy are given in Table 4.22 given above. It is found from this table that 8 and 7 respondents wished to buy a new row house measuring 200 to 500 sq. ft. and 501 to 750 sq. ft. respectively. As against this, only 3 respondents wished to buy new row house measuring 751 to 1000 sq.ft. and 2 were willing to buy the new row houses of about 1500 sq. ft.

(23) Area (sq. ft.) of the Old Flat

Out of the 6 respondents who desired to buy old flats through the home loan, 4 of them wanted to buy a small flat measuring between 400 and 617 sq. ft., 1 wanted to buy a medium size of flat of 1170 sq. ft. and the remaining respondent desired to buy a large old flat measuring 2650 sq. ft.

(24) Area (sq. ft.) of the Old Bungalow

One of the respondents wanted to buy a small size old bungalow of 1266 sq. ft. and the remaining 4 wanted to buy old bungalows of 2000 to 2500 sq. ft.

(25) Number of Respondents who were Account Holder of the Bank

Table 4.23 given below provides the necessary information on this aspect. 52 respondents were account holders of the bank when they applied for home loan. Out of them, 22 were relatively new account holders (9 years) and 27 were holding account for 10 to 20 years and 3 had accounts for more than 20 years.

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Table 4.23 Number of Respondent who were Account Holder of the Bank

No. of Years Number of Respondents (%)

2 to 9 years 22 42.31

10 to 20 years 27 51.92

>20 years 03 5.77

Total 52 100

(26) Reasons for Rejection of Application

Table 4.24 gives the reasons for the rejection of applications. It indicates that the application of 12 respondents were rejected, in case of 07 respondents (58.33%) the reason for rejection was negative CIBIL (Credit Investigation Bureau of India Ltd.) report. The other reasons were less income (16.67%), plan of the property not sanctioned (16.67%) and other reasons (8.33%).

Table 4.24 Reasons for Rejection of Application

Reasons Number of Respondents (%)

Due to Less Income 02 16.67

Plan not Sanctioned 02 16.67

CIBIL Report 07 58.33 Other Reason 01 8.33 Total 12 100.00 0 10 20 30 40 50 60

Less Income Plan not Sanctioned

CIBIL Report Other Reason

16.67 16.67 58.33 8.33 (% ) Reasons

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(27) Other Services of the Bank Utilized by the Respondents

Table 4.25 provides the responses of the respondents regarding other services of the bank utilized by them. As can be seen from the table two important reasons are savings account facility (63) and current account facility (61). The third and the fourth service in terms of importance are the “locker facility (35)” and “overdraft (14)”. Less than 5 customers utilized other services such as cash credit, insurance, mortgage loan, etc.

Table 4.25 Other Services of the Bank Utilized by the Respondents

Other Services Utilized BOB SPB Total

Current A/C 21 (33.87%) 41 (66.13%) 62 (100.0%) Saving A/C 39 (61.90%) 24 (38.10%) 63 (100.%) Overdraft 10 (66.67%) 05 (33.37%) 15 (100.%) Cash Credit 03 (100.0%) 0 (00.0%) 03 (100.%) Mortgage Loan 0 (00.0%) 01 (100.0%) 01 (100.0%) Insurance 03 (75.0%) 01 (25.0%) 04 (100.0%) Locker 19 (54.29%) 16 (45.71%) 35 (100.%) Others 01 (33.33%) 02 (66.67%) 03 (100.0%)

Among the three important facilities that were utilized by the respondents, in the case of current account 41 and 21 respondents were using the facility from SPB and BOB respectively and in the case of savings account the dominance of these two banks was reversed as 3 and 24 respondents used this facility from the banks. However, in the case of “locker facility” the numbers of respondents obtaining this facility were almost equal (19 and 16) respectively.

(28) Reasons for Selecting the Bank

One can see that the most important reason for selection of the bank is “Less fee (86)” followed by the “Co-operative staff (76).” The other reasons were “Speedy process” and “Nearer to residence (67 each)” and “Low interest rate (62).”

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Table 4.26 Reasons for Selecting the Bank

Reasons for Selecting the Bank BOB SPB Total

Less Interest Rate 47

(75.81%)

15 (24.19%)

62 (100.0%)

Speedy Process of Loan 43

(64.18%)

24 (35.82%)

67 (100.0%)

Less Processing Fee and Other Charges 46

(53.49%) 40 (46.41%) 86 (100.0%) Co-operative Staff 33 (43.42%) 43 (56.58%) 76 (100.0%) Nearer to residence 36 (53.73%) 31 (46.27%) 67 (100.0%) Others 0 (00.0%) 04 (100.0%) 04 (100.0%)

Among the reasons for selecting the bank “Less processing fees and Other charges”, “Co-operative staff” and “Nearer to residence” were almost equally popular among the respondents. On the other hand, among 62 respondents who claimed that less interest was the reason for selecting the bank 47 (75.81%) were the customers of BOB and only 15 (24.19%) were from SPB.

In the study undertaken by D. Rajasekhar (2008), it was found that 34% of the respondents have reported that, the institution provide loan at low rate of interest, 33% have reported easy installment, 31% reported that they approached for simple procedure

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 Less Interest Rate Speedy Process of Loan Less Processing Fee and Other

Charges Co-operative Staff Nearer to residence Others 75.81 64.18 53.49 43.42 53.73 0.00 24.19 35.82 46.51 56.58 46.27 100.00 (% )

Figure 4.15 Reasons for Selecting the Bank

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and formalities and only 2% of the respondents represent location near to their house. Thus there was wide disparity between the reasons given by the respondents in this study as compared to my study, e.g. ‘nearer to residence’ was given as a reason by 46% to 53% respondents in our study whereas the same reason was given by only 2% of the respondents in Rajasekhar’s study. So were the case with reasons like ‘co-operative staff’ and ‘less interest rate’, etc.

(29) Mode of Repayment of Loan

Data regarding the number of customers making payment through various modes are shown in the following table.

Table 4.27 Mode of Repayment of Loan

Mode of Payment BOB SPB Total

By Cash 03 (75.0%) 01 (25.0%) 04 (100.0%) By Cheque 20 (64.52%) 11 (35.48%) 31 (100.0%) Online Banking 06 (66.67%) 03 (33.33%) 09 (100.0%) Mobile Banking 1 (100.0%) 0 (00.0%) 01 (100.0%) Standing Instruction 12 (92.31%) 01 (7.69%) 13 (100.0%) ECS 08 (19.05%) 34 (80.95%) 42 (100.0%) 0.00 20.00 40.00 60.00 80.00 100.00

By Cash By Cheque Online Banking Mobile Banking Standing Instruction ECS 75.00 64.52 66.67 100.00 92.31 19.05 25.00 35.48 _33.33 0.00 7.69 80.95 (% ) Mode of Repayment

Figure 4.16 Mode of Repayment of Loan

BOB SPB

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42 out of 100 customers had opted for ECS mode of repayment and 31 chose to make repayment by cheque, 12 customers chose repayment through “Standing Instructions”. Only 10 customers preferred to use modern methods like “on line banking” and “mobile banking” for repayment.

However, in the study undertaken by M.K. Chaubey (2009) it was found that 40%, 38% and 18% respondents repaid their loan amount through post dated cheques, through ECS and through Salary deduction and 4% were paid directly to the bank. In other study by D. Rajasekhar (2008) shows that 53%, 27% and 14% of the respondents were paying their loan amount through ECS, through post dated cheques and through the collecting bank respectively. So I have come to almost similar conclusion in the case of mode of repayment of home loan by ECS and cheque. Another point I had noticed in my study was that the repayment of home loan was done by using the internet and mobile services.

(30) When the respondents were asked whether any intimation had been given to them

before due date of installment, only 17 replied in affirmative. This means that majority of them were not informed about the due date of installment.

Only 10 respondents said that a penalty imposed on them by the bank for a delay in repayment.

(31) Out of 100 respondents only 13 said that relief has been given by the bank if more

than 1 installment is paid at a time.

(32) Fulfillment of Services Promised by the Banks

During the survey the respondents were asked whether the services promised by the banks while taking a loan were fulfilled later on.

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Table 4.28 Fulfillments of Services Promised by the Banks

Services BOB SPB Total

Proper Bank Services 45 48 93

No Hidden Charges 42 48 90

Always Helpful and Co-operative 36 46 82

Give Full Details and Information regarding Bank 39 49 88

Complaints entertained and solved 22 44 66

Lower Interest Rate 48 22 70

Others 01 03 04

As many as 93 out of 100 respondents said that “proper bank services” were provided. Next in important were services like “no hidden charges” (89), “given full details” (88) and “helpful and co-operative staff” (81). However, it is important to note here that services like “Complaints entertained and solved” and “Lower Interest rate” were fulfilled only in 66 and 70 cases respectively.

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 Proper Bank Services No Hidden Charges Always Helpful and Co-operative Give Full Details and Information regarding Bank Complaint Entertained and Solved Lower Interest Rate Others 48.39 37.80 43.90 44.32 33.33 68.57 25.00 51.61 43.20 56.10 55.68 66.67 31.43 75.00 (% ) Services

Figure 4.17 Fulfillment of Services Promised by the Banks

BOB SPB

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In the study undertaken by Ashok Kumar (2009), it was found that 51% of the customers are satisfied with the behaviour towards customers by the bank employees.

(33) Satisfaction with the Bank

Table 4.29 Satisfactions with the Bank

Are you Satisfied? BOB SPB Total

Yes 46 46 92

No 04 04 08

Total 50 50 100

Table 4.29 provides information on whether the customers were satisfied with the bank. It is found that a very large majority (92%) were satisfied with the service of the bank, i.e. only a tiny proportion (8%) were not satisfied. Thus it is true of each bank i.e. SPB and BOB. So, it seems that the extent of satisfaction among the bank customers in Surat is much higher as compared to the one in Chennai as reported by Ashok Kumar (2009).

(34) Switch-Over of the Bank

Table 4.30 Switch-Over of the Bank

Switch Over to BOB SPB Total

Nationalised Bank 44 33 77

Private Bank 0 10 10

Co-operative Bank 02 10 12

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The relevant data given in table 4.30, according to the information provided in this table, only 12% of the respondents who took home loan from BOB were not ready to switch over to any other nationalized bank, if they given a choice. Since, similar percentage was almost five times (66%) in the case of SPB customers. It is clear that the customers of SPB were much more interested in switching over to the other type of banks (a nationalised Bank).

(35) Whether Form is Read Before Signing

Table 4.31 Whether Form is Read before Signing

Whether Form is Read Before Signing BOB SPB Total

Yes 15 (25.0%) 45 (75.0%) 60 (100.0%) No 35 (87.5%) 05 (12.5%) 40 (100.0%) Total 50 (50.0%) 50 (50.0%) 100 (100.%) Nationalised

Bank Private Bank _Co-operative

Bank Others 57.89 0.00 16.67 100.00 43.42 100.00 83.33 0.00 Banks

Figure 4.18 Switch-Over of the Bank

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At the aggregate level, slightly more than half (60.0%) of the customers claimed that they had thoroughly read the loan application form before signing it that means a significant proportion of the respondents do not read loan application before signing. However, 75% of the SPB customers had replied in affirmative as against only 25% of the BOB customers doing so. This is probably due to the fact that the application form provided by BOB is in English, while that provided by the SPB is in Gujarati.

(36) Reasons for not Reading Home Loan Application

The reasons for not reading the loan application form before signing are listed below in table 4.32.

Table 4.32 Reasons for not Reading Home Loan Application

Reasons BOB SPB Total

More detailed information 08

(80.0%) 02 (20.0%) 10 (100.%) Language 06 (75.0%) 02 (25.0%) 08 (100.0%) Completed by Agent 19 (95.0%) 01 (05.0%) 20 (100.0%) Others 02 (100.0%) 0 (0.0%) 02 (100.0%) 0 20 40 60 80 100 BOB SPB 25 75 87.5 12.5 (% ) Bank

Figure 4.19 Whether Form is read Before Signing

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Out of 40 respondents, who did not read the loan application form, about 3/4th of them did so because the entire procedure of application was completed by the agent. 15 respondents did not read it because of the language problem. While, 10 respondents felt that the application form contained too much of information to read.

(37) Suggestions Given by the Respondents

Table 4.33 Suggestions Given by the Respondents

Suggestions BOB SPB

Insurance policy taken by customers 08 --

Timely and Transparent sanctioned and disbursement process 06 09 Application form in local language/detailed information 05 -- Complete information about home loan and required documents 02 --

Force to buy gold coin/shares 02 03

Loan prepayment and delay charges 01 --

Others 03 03 0 20 40 60 80 100 More detailed Information

Language By Agent Others

80 ₇₅ 95 100 20 25 5 ₀ (% ) Reasons

Figure 4.20 Reasons for not Reading Home Loan Application Form

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As far as suggestions given by respondents regarding home loans are concerned, the numbers of suggestions given by BOB and SPB customers were 27 and 15 respectively. In the case of BOB customers, the most important suggestion (08 cases) given was that “to impose to take life insurance policy themselves” (The bank should not impose to take insurance policy to the customers). Next in terms of importance was timely and transparent sanction and disbursement process.” (06 cases) and availability of application forms in local language and information to be provided in short form (05 cases). There were also minor suggestions like provision of complete information about home loans and required documents. Informing the customer about approximate time to be taken, “black part” of the payment to be included to determine the loan amount etc.

In the case of SPB out of 15 customers, 09 suggested that there should be timely and transparent procedure for sanctioning the loan, 03 customers suggested that the customers should not be forced to buy the shares of the bank. There were also other suggestions (one each) like, “co-operation from the bank staff”, “bank should check CIBIL report” and “the bank should charge lower interest rate”.

However, in the study undertaken by M.K. Chaubey (2009), it was found that 70% respondents agree that there is a delay of loan approval and disbursement also. Most of the customers suggested that the loan processing / sanctioning time should be reduced. In this study it is revealed that various problems faced by customers. It was found that more than half of respondents agree with statement about delay in approval and disbursement, in adequate guidelines, tedious procedure, lack of interest on part of officials, difficulty in getting security, inconvenience in paying EMI, irrelevant securization, illogical approach and insufficient amount sanctioned. In the study undertaken by D. Rajasekhar (2008), 75% of respondents reported that there is a delay in sanctioning and disbursement of loan amount.

The conclusions arrived at after analyzing the two-way tables are summarized below:-

1) It was found that in general BOB had sanctioned loan within shorter period than SPB.

2) The important reasons for availing the home loan were “to get relief in income tax”, “for investment” and “to receive rent income”, in case of BOB customers,

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while for SPB customers there were “desire for big house”, “for investment”, and “to get relief in income tax” in the order of importance.

3) About half of the respondents had applied for home loan to buy a new flat or a new row-house.

4) It was found that 52% respondents were accont holders of the bank concerned and most of them were holding their account for many years.

5) Applications of only 12 respondents were rejected and more than half of them were rejected due to negative CIBIL report.

6) Two important facilities utilized by the respondents are savings account and locker in the case of BOB and Current account and Saving account in the case of SPB.

7) “Less processing fee”, “less interest rate” and “speedy loan process” were important reasons for selecting BOB while “co-operative staff’ and “less processing fee” were important reasons for selecting SPB.

8) The more frequently used modes of repayment are “cheque”, “standing instructions” and “ECS” for BOB customers. There were “ECS” and “by Cheque” for SPB costumers.

9) 93% respondents reported that proper bank services were provided and 90% and 88% respondents claim that there were no hidden charges and the bank gave full details and information, respectively.

10) 92% of the customers were satisfied with the services provided by the bank, in case of both BOB and SPB.

11) It was found that the loan customers of SPB were much more interested in switching their loan over to other nationalized bank as compared to BOB loan customers, if they are asked to do so because interest rate is higher as compared to nationalized bank.

12) 75% of SPB customers, but only 25% of the BOB customers, had read loan application form before signing it. The most important reason for not reading the application form being the filling up of form by the agents.

13) It was found that application form of BOB being not in local language (Gujarati) so the respondents did not read the application form thoroughly.

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Section – (C) Association Between Various Characteristics

In this section, an attempt has been made to determine whether there exists any association between various characteristics on which data were collected during the survey. Such association may be found to be helpful to the policy makers for formulating policies regarding home loans.

 Relation between Age of the Respondents and Various Reasons for

Home Loans

Table 4.34 Age of Respondents and Reason for Home Loan – “For Investment”

Age of Respondents Yes No Total

< 30 yrs 05 13.5% (31.3%) 11 17.5% (68.8%) 16 16.0% (100.0%) 31 to 40 yrs 19 51.4% (39.6%) 29 46.0% (60.4%) 48 48.0% (100.0%) 41 to 50 yrs 07 18.9% (31.8%) 15 23.8% (68.2%) 22 22.0% (100.0%) > 50 yrs 06 16.2% (42.9%) 08 12.7% (57.1%) 14 14.0% (100.0%) Total 37 100.0% (37.0%) 63 100.0% (63.0%) 100 100.0% (100.0%) value Significance Level 0.824 0.844

The table given above shows a two way classification of the customers selected in the sample according to two attributes-their age and whether the home loan was taken “for investment.” It is found that the percentage of the respondents, who took the home loan for investment purpose, varied between 32% and 42% without much variation within the four age groups. Thus, it seems that age of the respondents does not have any effect on their decisions regarding taking home loan as investment.

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The above conclusion is also confirmed by the x2 test. Here,

H0 : There is no association between the age of the respondents and whether

the home loan is taken for investment.

H1: There is association between the age of the respondents and whether the

home loan is taken for investment.

In this case the value of x2 is 0.824 which has probability of 0.844. Since, this probability level is not less than 0.05; we do not reject H0 i.e. no association between the

ages of the respondents whether the home loan is taken for the investment is found. This confirms the earlier conclusion.

Similar analysis was done for testing the association between the age of the respondents. Another reason was for taking home loan- “desire for big house”, “to get relief in income-tax” and “to receive rent income”. The values of x2 in this three cases were 0.580, 0.248 and 0.082 respectively suggesting that there is no association between these reasons and the age of the respondents. Thus, no association was found between the age of respondents and any of the above reasons for taking home loan.

Table 4.35 Age of Respondents and Reason for Home Loan – “Desire for Big House”

< 30 yrs 06 17.1% (37.5%) 10 15.4% (62.5%) 16 16.0% (100.0%) 31 to 40 yrs 15 42.9% (31.3%) 33 50.8% (68.8%) 48 48.0% (100.0%) > 4 yrs 14 40.0% (38.9%) 22 33.8% (61.1%) 36 36.0% (100.0%) Total 35 100.0% (35.0%) 65 100.0% (65.0%) 100 100.0% (100.0%) value Significance Level 0.580 0.748

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Table 4.36 Age of Respondents and Reason for Home Loan – “To Get Relief in Income Tax”

< 40 yrs 20 60.6% (31.3%) 44 65.7% (68.8%) 64 64.0% (100.0%) 40 to 50 yrs 08 24.2% (36.4%) 14 20.9% (63.6%) 22 22.0% (100.0%) > 50 yrs 05 15.2% (35.7%) 09 13.4% (64.3%) 14 14.0% (100.0%) Total 33 100.0% (33.0%) 67 100.0% (67.0%) 100 100.0% (100.0%) value Significance Level 0.248 0.883

Table 4.37 Age of Respondents and Reason for Home Loan – “To Receive Rent Income”

< 40 yrs 14 66.7% (21.9%) 50 63.3% (78.1%) 64 64.0% (100.0%) > 50 yrs 07 33.3% (19.4%) 29 36.7% (80.6% 36 36.0% (100.0%) Total 21 100.0% (21.0%) 79 100.0% (79.0%) 100 100.0% (100.0%) value Significance Level 0.082 0.775

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 Relation between Educational Qualifications of the Respondents and

the Various Reasons for Home Loans

Table 4.38 Educational Qualifications of Respondents and Reason for Home Loan – “In Place of Rented Property”

Response Educational Qualification of Respondents Total

Below Graduate Above Graduate

Yes 06 50.0% (27.3%) 06 50.0% (07.7%) 12 100.0% (12.0%) No 16 18.2% (72.7%) 72 81.8% (92.3%) 88 100.0% (88.0%) Total 22 22.0% (100.0%) 78 78.0% (100.0%) 100 100.0% (100.0%) value Significance Level 06.230 0.013

The relevant data are provided in table 4.38. It is clear from the table 4.38 that

among the respondents who were non-graduates and above graduates, the percentages for respondents who declared the reason for taking home loan as “in place of rented property” were 27.3% and 7.7% respectively.

These figures show a clear association between educational qualification of the respondents and this particular reason.

x2 test was performed to verify the above conclusion. Here,

H0: There is no association between education qualification of the respondents

and the reason “in place of rented property”.

H1: There is association between educational qualifications of the respondents

and the reason “in place of rented property”.

Here, the calculated value of x2 is 6.23 with significance level of 0.013. Since, this level is less than 0.05, H0 is rejected at 5% level. It means that there is relationship

between educational qualifications of respondents and the reason “in place of rented property”, and less educated respondents seem to have a tendency for taking home loan to buy a house “in place of rented property.”

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For other reasons for taking home loan also, x2 test was performed and in case of all the other reasons, viz. “for investments”, “desire for big house”, “to get relief in income tax”, “to receive rent income” and “others”, no relationship was found between them and educational qualifications of the respondents. The relevant data are given below in table 4.39 to 4.43.

Table 4.39 Educational Qualifications of Respondents and Reason for Home Loan – “For Investment”

Table 4.40 Educational Qualification of Respondents and Reason for Home Loan – “Desire for Big House”

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Table 4.41 Educational Qualifications of Respondents and Reason for Home Loan – “To Get Relief in Income Tax”

Table 4.42 Educational Qualification of Respondents and Reason for Home Loan – “To Receive Rent Income by Purchase of New House”

Yes 07 33.3% (31.8%) 14 66.7% (17.9%) 21 100.0% 21.0% No 15 19.0% (68.2%) 64 81.0% (82.1%) 79 100.0% (78.0%) Total 22 22.0% (100.0%) 78 78.0% (100.0%) 100 100.0% (100.0%) value Significance Level 1.990 0.158

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Table 4.43 Educational Qualification of Respondents and Reason for Home Loan – “Others”

 Relation between the Occupation of Respondents and the Various

Reasons for taking Home Loans

Relation between the Occupation of respondents and various reasons for taking home loans like “in place of rented property”, “for investment”, “for desire of big house”, “to get relief in income-tax”, “to receive rental income” was analyzed by constructing two-way tables as given below.

Table 4.44 Occupation of Respondents and Reason for Home Loan – “In Place of Rented Property”

Response Occupation of Respondents Total

Service Business and Others

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Table 4.45 Occupation of Respondents and Reason for Home Loan – “For Investment”

Table 4.46 Occupation of Respondents and Reason for Home Loan – “Desire for Big House”

Yes 13 37.1% (33.3%) 22 62.9% (36.1%) 35 100.0% (35.0%) No 26 40.0% (66.7%) 39 60.0% (63.9%) 65 100.0% (65.0%) Total 39 39.0% (100.0%) 61 61.0% (100.0%0 100 100.0% (100.0%) value Significance Level 0.078 0.780