RESEARCH PROPOSAL 1.

Introduction

With demand much more than supply, rising inflation, increasing number of private universities setting up campuses, increased cost of overseas education due to appreciating dollar & increasing need for campuses by foreign universities, the cost of higher education is set to rise. Thus the demand for educational loans is set to increase. According to the Ministry of State for Finance, there has been a growth of about 29% in educational loans while the number of accounts increased by 3, 56,515. Public sector banks have a 80-85 % per cent market share in educational loans. The average loan size has gone up from Rs 2.5 lakhs to around Rs.4.5 lakhs and the current size of educational loan market is around 32000 crores. It has been found that educational institutions are increasingly collaborating with different banks and encouraging the students to avail of loan facilities from that bank. After availing of the advised loans, it has been found that the students have not been satisfied with the loan terms and conditions and have switched either the scheme or the bank offering the loan, adding to the costs of the loan. Hence we intend to determine the various benefits that students seek while availing of an educational loan.

1.1.

Background

A leading private bank has decided to come out with a new product in the form of an education loan for higher studies. In order to develop an effective scheme it first wants to know what are the key benefits that consumers look for in an educational loan. To differentiate their product from competitors they want to come out with an innovative scheme that will meet the demands of their customers effectively. In order to identify the key factors that influence ones decision while opting for an education loan a market research is proposed to be conducted. The research will give an insight into the various attributes that consumers look at before selecting a loan. The

research will also help the management decide which out of a possible list of schemes is most likely to succeed in the market.

2. Objectives:
PRO: To determine the factors that influence students decision when taking up an education loan. SRO: 1. To determine the extent of influence of interest rates. 2. To determine the level of influence of the method of calculation of interest rates. 3. To determine the extent of influence of the waiver period. 4. To determine the extent of type and amount of collateral/guarantee required. 5. To determine the extent of influence of the down payment amount. 6. To determine whether the nature of the bank (private or PSU) has any effect on the choice. 7. To determine the extent of influence of the overhead costs ( processing fees, time). 8. To determine the extent of influence of level of income in deciding on a loan 9. To determine the extent of influence of type of higher education sought in deciding on a loan. 2.1. Relevance of the data:

The data obtained from this research will help in understanding the perception of the customers regarding the existing loan schemes from various banks, Help in identifying the key segments of this market, Give an insight into the key factors that consumers look at before making a decision, and Finally, help in developing a new product keeping the above factors in mind.

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