Consumer buying behaviour is the sum total of a consumer’s attitudes, preferences, intentions, and decisions regarding the consumer’s behaviour in the marketplace when purchasing a product or service.
Consumer behaviour can be broadly classified as the decisions and actions that influence the purchasing behaviour of a consumer. What drives consumers to choose a particular product with respect to others is a question which is often analysed and studied by marketers. Most of the selection process involved in purchasing is based on emotions and reasoning. The study of consumer behaviour not only helps to understand the past but even predict the future.
We conducted a survey across the geographies of India covering varied demographics of the consumers regarding their buying behaviours when they opt for purchasing a loan or a financial product.
Our survey covered all the factors which the customer consider while buying a loan or financial services. The details of factors covered in the survey are as under
The respondent were from different age brackets, for the convenience to research we divided our age in 4 brackets like 18-25 years, 26-40 years, 41-60 years and above 60 years. The age wise response we received were as mentioned.
50% of the respondents were from the age bracket of 26-40 years, the most potential age bracket where Banks and NDFC can target to sell their loans and financial services. 25% of the respondents were among the age bracket of 18-25 years which is again a big potential age bracket to target.
We divided the employment status as Self-Employed, Salaried and un employed. 58% of salaried preferred to buy loans and financial products against 34% of self employed, though both the segments are potential customers to sell loans and financial products.
Preference of Financial Service Provider
We surveyed a direct question “Where does the customer prefers to take loans from”?. The categories were Banks or NBFC. 75% of the respondents preferred to take a loan from Banks as against 25% from NBFC. While banks and non-banking financial companies (NBFC) both are key financial intermediaries that offer similar services to the customers. Its quite evident that most of the customers wants to take loans from Banks, just because of their branding, NBFC too are governed by RBI but have certain relaxation , all NBFC’s are working to expand their geographical reach to service the potential customer and are giving a stiff competition to Banks.
Preference on Loan Type
55% of the respondent preferred to take a Home loan, 18% preferred to take Loan against Property and Business loan, this category specifically includes the self employed customers, only 9% respondent showed interest in Personal loans. It should be noted that the most preferred loan among the customers is home loan, though the preference for LAP and BL to is increasing, if we see the combine percentage of LAP and BL, it is around 36% which is not very far off the preference of Home loan.
Most important factor while taking loan
We segregated difference factors which customer consider while taking loan or financial services, such as loan amount , Processing Fees, loan service provider and Interest rates. The most important factors which the customer consider while taking the loan is the Interest Rate. 50% of the respondents preferred Interest rate over any other factor. 22% each votes were given to the loan service provider and processing fee, which means that if NBFC are competitive in terms of Interest rate and processing fees , they too can attract a large customer base to sell their financial products, irrespective that 75% of customers prefers to take loans from Banks. Only 7% votes were given to the loan amount as the most important factor while taking a loan.
Preference on medium to apply for a loan
Taking a home loan is easier said than done. Though in today’s scenario every Bank & Financial institution is eager to lend but getting a loan sanctioned can be a difficult task. Though it may seem all banks are eager to lend, getting a loan sanctioned can be a tedious task. Taking a home loan is easier said than done. Also the awareness among the customer pertaining to financial products is also very limited, basis this we checked for their preference to apply loan. A whopping 42% votes were given to applying loan through a mortgage broker who has a multiple loan options as per the customer’s requirements and at the convenience of their time and place. 33% of the respondents prefer apply the loan directly with their banks with no intermediately in between. 25% of the votes were given to online application process, where the respondent wanted to compare and apply online. With the growing technology in the coming time online comparison and application will take over all the other preference to apply loans.