8/6/2019 Consumer Fnan

1/31

Page 1

8/6/2019 Consumer Fnan

2/31

Page 2

Maryyam BintMaryyam Bint--EE-- AslamAslamM09MBA053

Rabia AimunRabia Aimun

M09MBA062

8/6/2019 Consumer Fnan

3/31

Page 3

CONSUMER

FINANCING

8/6/2019 Consumer Fnan

4/31

Page 4

RABIA AIMUN

8/6/2019 Consumer Fnan

5/31

CONSUMERA consumer is an entity that receives

or consumes products and has theability to choose between

different products.

8/6/2019 Consumer Fnan

6/31

CONSUMER FINANCING

8/6/2019 Consumer Fnan

7/31

CONSUMER FINANCING

Consumer financing refers to any kind oflending to consumers by the banking

sector and financial institutions.

CONSUMER FINANCING

8/6/2019 Consumer Fnan

8/31

According to Prudential

Regulations

Any financing allowed to individuals formeeting their personal, family or

household needs

According to Prudential

Regulations

8/6/2019 Consumer Fnan

9/31

Consumer financing has been categorizedin following disciplines:

- Personal loans

- Auto loans

- Housing finance

- Credit cards

Consumer Financing

Products

8/6/2019 Consumer Fnan

10/31

Analysis of Consumer

Financing

CONSUMERFINANCING

PRODUCTS

Rupees(in billion)

2008

Rupees(in billion)

2009

Cre it Car s 33.538 42.822

Personal Loans 120.57 142.373

Auto Loans 97.777 105.444

House Loans 43.205 54.205

8/6/2019 Consumer Fnan

11/31

Analysis of Consumer

Financing

8/6/2019 Consumer Fnan

12/31

Page 12

Rabia Aimun&

Maryyam Bint-E-Aslam

8/6/2019 Consumer Fnan

13/31

Comparative Study

Standard Chartered

Bank Pakistan

(Pvt) Limited

National Bank of

Pakistan

8/6/2019 Consumer Fnan

14/31

Standard Chartered Bank Pakistan (Pvt)Limited - A locally embedded international

bank Largest international bank in Pakistan

Operating in Pakistan for 140 years

First established its operations in 1863 in

Karachi Employs over 9,000 people

162 branches

Introduction

8/6/2019 Consumer Fnan

15/31

Largest commercial bank

Established on November 9, 1949

Major business partner of the govt.

Act as an agent of SBP

Listed in all stock exchanges

Provides services to individuals ,corporate entities and govt.

1250 branches

IntroductionIntroduction

8/6/2019 Consumer Fnan

16/31

Home Purchase NBP Saiban

Home purchase &

Construction Financing Amount Up to 35

Million

Financing Period 3 to 20

Years

1.House Financing

Repayment tenor

of 1 to 20 years Loan to value up to 80%

of property value

Minimum net income as

low as PKR 20,000/month

Mark-up rate for:

Salaried: 17.00%

Self-Employed: 17.50%

Documentation required

8/6/2019 Consumer Fnan

17/31

Home Credit

Loan amount of up to PKR

10,000,000

Repayment tenor rangingfrom 1 to 10 years

Loan to value maximum of

up to 60 % of the property

value Minimum Net Income as

low as PKR 20,000 per

month

Documentation required

Home Renovation

Financing Amount Up to 15

Million

Financing Period 3 to 15

Years

Purchase of Land &

Construction Financing Amount Up to 35

Million

Financing Period 3 to 20

Years

House Financing (contd)

8/6/2019 Consumer Fnan

18/31

Ready Cash

Instant Credit up to Rs.

500,000

Lowest Mark-up

Pay as You Utilize

No Penalties on Early

Repayment

Nationwide Accessibility

Simple Eligibility Criteria

Advance Salary

20 months salary in

advance

Minimum documentation

Repayable in 5 years

1 percent processing

charges ; no collaterals

The product is for NBPaccount holders &

Government or related

organization employees

2. Personal Financing

8/6/2019 Consumer Fnan

19/31

Student Loan

admission on merit

at least 70% marks in the last public examination.

unable to pursue studies due to financial constraints.

age bracket

For Graduation Not exceeding 21 Years

For Post-Graduation Not exceeding 31 Years

For Ph.D Not exceeding 36 Years

Standard Chartered Bank Pakistan doesnt provide

any such facility to students.

Personal Financing (contd)

8/6/2019 Consumer Fnan

20/31

Standard Chartered doesnt

provide auto financing

facility.

National Bank of Pakistan

doesnt provide auto

financing facility.

3. Auto Financing

8/6/2019 Consumer Fnan

21/31

Wide range of credit cards

Saadiq VISA Credit Cards

MasterCard

VISA Card

Easy Credit Card

American Express CreditCards

PIA Co-branded Credit Card

National Bank of Pakistan

doesnt provide any type of

credit cards to its

customers.

4. Credit Cards

8/6/2019 Consumer Fnan

22/31

Page 22

Maryyam Bint-E-Aslam

8/6/2019 Consumer Fnan

23/31

Overview

Aggressive Promotion of ConsumerFinancing in 2001

Highest Share by Personal Loans

Record Profit Earning byBanking Sector

Growth of Consumer

Financing

8/6/2019 Consumer Fnan

24/31

Sharp Contraction in Every Segment ofConsumer Financing During 2009-10

Significant Shrinkage in Credit CardsBusiness

Steep fall in Outstanding Loans for Car

purchasing Sharp Decline in Personal Loans

Decline in loans for House building

Factors for Decline

Consumer Financing Losing

Its Luster In Pakistan

8/6/2019 Consumer Fnan

25/31

Higher Interest Rate

Variable Interest Rate Deteriorating Quality of Services

Lack of Consumer Education

Poor Information DisclosurePractices

Consumer Financing Issues

8/6/2019 Consumer Fnan

26/31

SBP should exercise its powersto determine a reasonable rate

of return. Mark up charged on Consumer

financing products should be

reduced to a substantial level. Full compliance with SBP

regulations should beexercised.

Recommendations

8/6/2019 Consumer Fnan

27/31

Transparency and Access to

Information related to ConsumerFinancing Products and Services.

Increase consumer awareness, giveclear instructions and guidance.

All applicable charges on consumerloans should be explained beforesigning the contract.

Recommendations

8/6/2019 Consumer Fnan

28/31

CONCLUSION

8/6/2019 Consumer Fnan

29/31

8/6/2019 Consumer Fnan

30/31

8/6/2019 Consumer Fnan

31/31

Page 31