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GE Money
Study on Personal Loans in the UAE and
alternative means of customer acquisition for
                 AFGEM
   Joint venture between Al Futtaim group and GE

   Al-Futtaim Group, one of the most respected corporations in the
   ...
   World’s Largest Retailer Finance Program Provider
   World’s Only Global Independent Auto Finance Company
   Emergin...
Gap between average salary hike and cost of living hike
                  in UAE (2007)
Source: UAE Economic Year 2008
Source: WWW.Bayt.Com
Source: Global Investment House
Source: Global Investment House
Bank Credit to residents, Dec
(Dh bn)                                            2005             2006    % change
Total  ...
TOP BANKS RANKED BY NET PROFITS($000)
Ran                                   Net               Net                Growth Y-...
Self
Employ Standard                                        AF-GE
                   Mashreq   ADCB    Barclays   Citi
  e...
Salarie    Standard        Mashreq         ADCB            Barclays         AFGE
   d       Chartered                     ...
   Sample size 40 to understand customer expectations for
    personal loans process

   Questionnaire

   Snowball Met...
All data in percentage
Attribute list
1-Rate of Interest
2-EMI
3-Number of documentation
4-Tenor of Loan
5-Relation with Institution
6-Promptness...
   Branch network
   Direct sales agent
   Online application
   Call centers
•   Partnership with residential and commercial rented -
    space leasing companies

•   Overseas Remittance

•   Cosmeti...
   Finance IKEA’s home and office furnishing solutions:

       Contract Sales
       Home Planning
       Kitchen Pla...
   85 % expatriate population- mostly all a part of the
    workforce

   Budding Free Zone Companies

   Demand for fu...
   Tie up with hospitals in Dubai healthcare city or Dubai healthcare
    authority
     Plastic Surgery Hospital I
    ...
Market Size
   AED 1.5 billion in retail sales – CAGR of 8.4 per cent
Consumption
   AED 1,229 per head- highest in the ...
PROCEDURE           PRICE RANGE     MONTHLY
                                    PAYMENTS
  Rhinoplasty       $3600 - $4800...
   Association with rented space leasing companies
    who provide serviced offices and residential
    apartments.

   ...
Commercial Rental Rates and Percentage Change
Location             Q1 2007             Q1 2008       Y-o-Y Increase
      ...
•Commercial rental rates
                         increases at 22%

                         •During 2006, 11536 new
     ...
Studios      1 BR      2 BR

International City                42000     58000     95000

Al Barsha                       ...
   Risk Involved
       Funding new ventures is risky
       GE being non-banking institution cost of funds is high.
  ...
   Etisalat offers free remittance to any country
    Etisalat provides mobile money transfer facility

   Partnership w...
Composition of Population

   84.6 percept UAE is expatriates
   75 percent of the workforce – Indian and Southeast Asia...
   Tie up with “Dubai metal and commodities center” and
    funds investing in commodities

   Advertise and promote the...
Source: www.sca.ae/english/Markets/DGCX
   High Volatility

   High Prices

   Limit for initial margins and delivery margins hiked
Questionnaire
We are students of SPJCM at Dubai. As a part of our course curriculum we are required to
undertake a researc...
7.   How often do you/would you opt for a personal loan?

      Once a year
      Once in 6 months
      Once in 3 m...
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
Industry Immersion Project(Internship Project)
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Industry Immersion Project(Internship Project)

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Corporate presentation for Internship Project undertaken as part of MBA for AFGEM

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Industry Immersion Project(Internship Project)

  1. 1. GE Money
  2. 2. Study on Personal Loans in the UAE and alternative means of customer acquisition for AFGEM
  3. 3.  Joint venture between Al Futtaim group and GE  Al-Futtaim Group, one of the most respected corporations in the UAE •Automotive •Electronics •Retail •Financial Services •Real Estate •Construction •Watches & Jewellery •Insurance
  4. 4.  World’s Largest Retailer Finance Program Provider  World’s Only Global Independent Auto Finance Company  Emerging Global Mortgage Provider  Operates in 55 countries worldwide Financial Highlights Product Portfolio •2007 Earnings: US $4.3 billion Auto Loans •2007 Assets: US $211 billion Personal Loans Consumer Durables Loans Credit Card
  5. 5. Gap between average salary hike and cost of living hike in UAE (2007)
  6. 6. Source: UAE Economic Year 2008
  7. 7. Source: WWW.Bayt.Com
  8. 8. Source: Global Investment House
  9. 9. Source: Global Investment House
  10. 10. Bank Credit to residents, Dec (Dh bn) 2005 2006 % change Total 353.1 474.2 34.3 Personal loans for business 70.5 88.0 24.9 Trade 85.1 92.6 8.9 Construction 41.9 54.3 29.7 Government 39.3 47.9 21.8 Personal loans for consumption 28.1 31.2 14.7 Source: Central Bank of the UA E, Quarterly Statistical Bulletin. 2007 (Dh bn) 2005 2006 Sept 30th Bank Assets 624.9 865.9 1064.8 Bank Deposits 426.5 558.2 651.4 Loans and Advances 379.1 515.4 645.3 Personal loans for consumption 28.1 31.2 41.1 Commercial loans 68.8 87.9 - Source: Central Bank of the UA E.
  11. 11. TOP BANKS RANKED BY NET PROFITS($000) Ran Net Net Growth Y- k 07 Bank Name Profit-07 Profit-06 O-Y (%) 1 Emirates NBD 1,072,893 815,330 31.59 2 Dubai Islamic Bank 683,197 429,637 59.02 3 National Bank of Abu Dhabi 681,114 573,451 18.77 4 Mashreqbank 578,800 447,200 29.43 Abu Dhabi Commercial 5 Bank 567,636 584,590 -2.9 6 First Gulf Bank 546,800 418,146 30.77 7 Union National Bank 321,100 274,845 16.83 8 Commercial Bank of Dubai 257,143 163,649 57.13 Abu Dhabi Islamic Bank 157,129 93,804 67.51 9 10 Bank of Sharjah 109,843 87,167 26.01 Source: Gulf Business Magazine
  12. 12. Self Employ Standard AF-GE Mashreq ADCB Barclays Citi ed Chartered Money Loans Max Amount 250 250 150 250 100 250 (AED) Max 48 36 48 48 48 60 Tenor Interest Rate % 22-24 23 19-22 23 26 21-22 p.a
  13. 13. Salarie Standard Mashreq ADCB Barclays AFGE d Chartered M Loans STL Non- STL Non- STL Non- STL Non- Non- Based STL Based STL Based STL Based STL STL Max Amount 250 100 250 150 250 150 150 120 180 (AED) Max 48 48 72 48 72 48 60/72 60 54 Tenor Interest Rate % 11-14 21-25 9-12 19-21 10 18-22 19-23 19-26 21-23 p.a
  14. 14.  Sample size 40 to understand customer expectations for personal loans process  Questionnaire  Snowball Method
  15. 15. All data in percentage
  16. 16. Attribute list 1-Rate of Interest 2-EMI 3-Number of documentation 4-Tenor of Loan 5-Relation with Institution 6-Promptness of distribution
  17. 17.  Branch network  Direct sales agent  Online application  Call centers
  18. 18. • Partnership with residential and commercial rented - space leasing companies • Overseas Remittance • Cosmetic and dental surgery financing • Partnership with Dubai metals and commodity exchange • IKEA, furniture and interior designer
  19. 19.  Finance IKEA’s home and office furnishing solutions:  Contract Sales  Home Planning  Kitchen Planning  Children Furniture  Promoting through IKEA catalogues circulated in all emirates
  20. 20.  85 % expatriate population- mostly all a part of the workforce  Budding Free Zone Companies  Demand for furniture is expected to grow with real estate developments on the rise-ADNEC  Convenience coupled with affordability
  21. 21.  Tie up with hospitals in Dubai healthcare city or Dubai healthcare authority  Plastic Surgery Hospital I  Plastic Surgery Hospital II  American Academy of Cosmetic Surgery Hospital (AACSH)  Advertise on cosmetic surgery portal in UAE Immersivemedical.com  Promote in Beauty world Middle East Exhibition or Confederation of Surgeons in UAE
  22. 22. Market Size  AED 1.5 billion in retail sales – CAGR of 8.4 per cent Consumption  AED 1,229 per head- highest in the world Market Research Results  Cosmetics and personal care sector in UAE has grown 12% annually over the past three years, with sales value of AED 7.70 billion (US$2.1 billion) in 2007. Source: zawya.com , arabianbusiness.com
  23. 23. PROCEDURE PRICE RANGE MONTHLY PAYMENTS Rhinoplasty $3600 - $4800 $126 - $280 Liposuction $2300 - $7000 $ 87 - $350 Eyelid Tuck $3800 - $4800 $104 - $240 (Major) Face Lift (Major) $6500 - $8500 $195 - $425 Face Lift (Minor) $4500 - $6000 $135 - $280 Tummy Tuck $5500 - $7500 $165 - $375 Laser Resurfacing $1500 - $6500 $ 45 - $325 Chin $2300 - $3500 $ 69 - $175 Augmentation
  24. 24.  Association with rented space leasing companies who provide serviced offices and residential apartments.  Rental discounts and monthly lease payment convenience  Loans for startup and emerging businesses
  25. 25. Commercial Rental Rates and Percentage Change Location Q1 2007 Q1 2008 Y-o-Y Increase AED/ Sq. Ft. AED/ Sq. Ft. Al Barsha 213 250 17% Muraqqabat 173 238 38% Satwa 225 275 22% Sheikh Zayed Road 330 405 23% Bur Dubai 263 315 20% Deira 238 280 18% TECOM 260 303 17% DIFC 350 415 19% Average 257 310 22% Source: www.asteco.com
  26. 26. •Commercial rental rates increases at 22% •During 2006, 11536 new licenses were issued for business start-ups •Rental Rates have tripled and reached on an average AED 257 in 2007 •More than 50 million sq. feet of new office space by 2009/2010 Source: www.asteco.com
  27. 27. Studios 1 BR 2 BR International City 42000 58000 95000 Al Barsha 70000 100000 135000 Jumeirah Lake Towers 75000 105000 140000 Dubai Marina 85000 107500 150000 Jumeirah Beach Residence 85000 105000 147500 Greens 85000 110000 155000 Old Town 100000 140000 175000 Palm Jumeirah 100000 140000 200000 Source: www.asteco.com
  28. 28.  Risk Involved  Funding new ventures is risky  GE being non-banking institution cost of funds is high.  Business expected depends on partner efficiency  Suggested Partners  Regus  ServeCorp  Alliance Business Center  Sentinel  Best Homes
  29. 29.  Etisalat offers free remittance to any country Etisalat provides mobile money transfer facility  Partnership with UAE exchange UAE exchange processes 5000 transactions per day  Capitalize on UAE exchange network
  30. 30. Composition of Population  84.6 percept UAE is expatriates  75 percent of the workforce – Indian and Southeast Asian Remittance through prohibited channels  Outbound are as high as $10bn a year and expected to become $22bn by 2008.  India: 90 %  Nepal: More than 50%  Hawala (Illegal Transfer) is to avoid tax, unawareness and avoid remittance fees Source: www.meed.com
  31. 31.  Tie up with “Dubai metal and commodities center” and funds investing in commodities  Advertise and promote the personal loan product as commodity financing  Portals : Thebulliondesk.com and basemetals.com providing live commodity prices in UAE
  32. 32. Source: www.sca.ae/english/Markets/DGCX
  33. 33.  High Volatility  High Prices  Limit for initial margins and delivery margins hiked
  34. 34. Questionnaire We are students of SPJCM at Dubai. As a part of our course curriculum we are required to undertake a research project..............Your co-operation in completing the questionnaire will be appreciated. (Please expand) 1. Are you  UAE national  Expatriate, please specify nationality. __________________________ 2. Are you  Self employed  Salaried 3. In case of self-employed, please specify the annual business turnover  Less than 50 million AED  More than 50 million AED If salaried, please specify your salary per month?  Less than 4000 AED 4000-15000 AED  More than 15000 AED 4. Please specify the name of your organisation/company. ___________________________________________ 5. Have you ever taken a personal loan? Note: A personal loan can be taken for any purpose , however it should not be described explicitly as an auto loan, education loan or loan for consumer durables!!! Yes Name of loan provider __________________________  No 6 .If yes then what has been the purpose(s) of taking the loan? a. b. c. If No, then will you ever take a loan? Please specify the possible reasons for which you would take a loan?
  35. 35. 7. How often do you/would you opt for a personal loan?  Once a year  Once in 6 months  Once in 3 months  More Than four times a year 8. Please specify the range of loan amount (in AED) you have taken/would take as loan on an average at any given point of time? Upto 15000 aed 15000 to 180000 aed 180000 to 250000 aed More than 250000 aed 9. When in the need of a loan, who would you first approach for obtaining it? Your Banker Other Financial Institution Friends Family 10. Please rate the factors below, in order of priority that you consider important for taking a personal loan? (1-most important, 5 least important) • Rate of interest  • Equated Monthly Instalment (EMI) • Documentation required  • Time period of loan (Tenure) • Relation with institution  • Promptness of loan disbursement  11. How would you inquire for a personal loan? Call a helpline(such as a toll free number) Call your personal banker Others (Please specify)

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