CUSTOMER PERCEPTION OF DSA AND FRANCHISE-BASED LOAN MARKETING: AN EMPIRICAL STUDY OF NBFC BORROWERS IN VIDARBHA

Abstract

The fast growth in the number of NBFCs in India has rubbed fuel to the fire of utilizing intermediary based loan marketing channels especially in DSAs as well as franchise based retail outlets with a view to increasing credit penetration in semi-urban areas like Vidarbha. This research paper compares and contrasts the perceptions of customers towards DSA and franchise based loan marketing systems as regards the quality of the services offered, transparency, trust, perceived risk, convenience and overall satisfaction. A descriptive analytical research design was used to collect primary data comprising of 320 NBFC borrowers in a structured questionnaire and analysed using the descriptive statistics and an inferential method with independent sample t-tests. The results indicate that there is statistically significant difference in customer satisfaction on the two channels. Whereas the DSA model is less convenient since it has a doorstep and flexible service style, franchise based models have shown better performance in terms of transparency, trust, quality of services, and decrease in perceived risk. The findings indicate that convenience alone is not important to the borrowers, but rather the reliability and transparency of their loan dealings. By providing the insights on the use of NBFCs as a channel by borrowers and by giving the viable implications on the governance of the channels and sustainable marketing of loans in the regional markets, the study helps to add to the existing limited number of empirical studies on the topic of channel distribution.