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Tag: gold loan

  • The campaign was based on an insight from the consumer's life that 'Circumstances do not dictate my destiny, I do'

    DDB Mudra creates a new gold loan campaign for Federal Bank

    By A Correspondent

     

    Mother & Son
    Husband & Wife

    Gold loan is one of the fastest growing categories amongst retail loans inIndia. Research shows that a lot of customers who take gold loans are small businessmen, small storeowners, painters, mechanics, carpenters and others. It was found that the category is dominated by NBFCs and consumers do not consider going to banks for gold loans. Hence, the task was to get Federal Bank to break into the consideration of the customer.

     

    The new Gold Loan Campaign of Federal bank is based on the premise that there are two kinds of situations that call for a gold loan; an emergency loan (hospital bills) and a loan for progress (buying a house, expanding business). In times of emergencies, these consumers prefer an NBFC for speed of transaction but when it is a loan for progress, they prefer a bank as interest rates and terms of repayment matter.

     

    Ranji Cherian President and Head of DDB Mudra Group, South said: “This campaign magnifies the loans-for-progress in a very strong manner. What is interesting is that when it comes to Loans-for-progress, customers prefer a bank as interest rates and terms of repayment matter”.

     

    “In times of need due to undue financial pressure, a person usually gets confused and forgets where to go for help, be it for business, education, or a family wedding. This campaign is aimed at easing his tension and reminding him of the safest, most reliable and trusted partner – Federal Bank Gold Loan, giving instant loan on gold besides safeguarding the gold, and unlike many unscrupulous gold loan companies, not charging a hefty interest rate. The simplicity of this campaign drives home this point quite precisely, easing the tension of any one in need of financial help,” said Vipul Thakkar, Executive Creative Director, DDB Mudra South.

     

    A deep dive into the consumers’ lives revealed that people who are forced to support their families at a very early stage in their lives constantly fight against all the challenges life throws at them and yet try and progress one step at a time. The campaign was based on an insight from the consumer’s life that ‘Circumstances do not dictate my destiny, I do’.

     

    Mr. Anand Chugh, the Chief Manger Marketing at Federal Bank said: “This campaign was conceived well and the execution is also as intended. The faith in advertising has gone up post the campaign as tangible results in terms of portfolio growth are visible. The campaign has strengthened the position of Federal Bank in the retail gold loan market.”

     

    To break through the clutter in the market, the agency made the woman the hero of this campaign. The television commercials show the lady of the house coming forward to help her family out of a tough situation. Federal Bank is hence showcased as the consumer’s trustworthy partner in progress. “Bringing the woman to the centre of the decision adds meaning and strengthens the case for Federal Bank,” said Mr Ranji.

     

  • In redefining the way gold loan is viewed, Manappuram Finance Limited has turned its own fortunes around too

    Gold opens new doors for Manappuram

    By Tuhina Anand

     

    The traditional arena of the gold loan as a source of quick cash has been transformed into a booming business with the advent of some major players. In redefining the way gold loan is viewed, Manappuram Finance Limited (MAFIL), based in Thrissur District in Kerala has played a key role, and in the process has turned its own fortunes around too, especially in the last two years.

     

    As  I Unnikrishnan, Managing Director, MAFIL says, their balance sheet has shown 100 percent growth in terms of profit in FY 2009-10 and 200 percent in FY 2010-11. There are multiple reasons for this growth, including being the first Kerala-based NBFC (Non-Banking Finance Company) to receive foreign investments which paved way for its geographical expansion. Manappuram had been restricted to Kerala till 2005 but started expanding to west, north and east. They have 2700 branches and in FY11 it has already opened some 700 branches. Also technology has played a major role in the company’s success with core banking solutions available to them, thus revolutionizing the loan against gold business.

     

    Other than this, communication has played a crucial role in Manappuram’s success. The company has splashed out on getting top film stars as brand ambassadors. Mr Unnikrishnan explained, “We have got not one but multiple brand ambassadors to reach out to people in various regions. When you enter a new geography, the need is to create a trust among consumers on your brand especially in our trade where we are asking them to part with their gold which is something precious to them. There is a need to build credibility in the lending business. We decided to go with the popular film actors as these are names people trust.  The idea to have so many film stars helps as each actor is trusted by people especially in their region.”

     

    They have roped in Mohanlal who is leading actor in Kerala, Puneet Rajkumar from Karnataka, Vikram who rules Tamil cinema, Akshay Kumar who has pan India appeal as well as actors Venkatesh and Mithun Chakraborty.

     

    More than anything as Mr Unnikrishnan says, they have managed to create awareness about gold loans and brought about a perceptual revolution. Earlier pawning of gold was seen in a poor light and there was a negative impression that people sell gold when they are in distress. “We have positioned gold loan as something that is handy and that is where our well crafted advertising has helped. It has required a commitment to convince the customer that gold loan is a feasible and quicker way of getting cash and not just in distress. I think this strategy has paid off and not just for Manappuram but also for the gold lending business.”

     

    The communication shows that gold loan can help one scale up their business or fulfill a long awaited dream. So gold which Indians have a tendency to hoard and keep in lockers can actually fetch you money to realize your dreams.

     

    After having a good run in the South, now Manappuram is experiencing growth from Gujarat, Maharashtra, Chhatisgarh , Orissa and West Bengal among others. In fact, Mr Unnikrishnan is bullish on the trade and estimates that the organized gold loan market is close to Rs 1 lakh crore and the unorganized as Rs 2 lakh crore. In fact, seeing the opportunity in gold loan besides the NBFCs like Manappuram and Muthoot who have gained success even banks have got into this area. He concludes, “The challenge is not the market as it is growing. The challenge is to train people who can understand and meet the need of customers.”