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Introduction

Would you like to be in the business of money? Lending and accepting deposits, and creating growth and value in economy while touching and impacting people's lives?
Do you have acumen for both numbers and people management balanced in a healthy mix, and would you like a sales career where you get not only rewards, recognition but also respect from people whom you touch? Then a marketing career in financial products is the choice for you.

Financial products are products like loans, credit cards, savings accounts, fixed deposits, mutual funds and insurance. They help people save and grow their money, safeguard their assets, or meet their financial needs at the time they need it. Financial products is a rapidly rising industry in India with many national and international players in this sector.

Marketing financial products is different from marketing other products in many ways. This is because it is a highly-regulated sector and the basic components of a financial product are basically the same for all players. This means that a Rs. 30,000 loan is the same irrespective of where it came from. Financial products differ in terms of level of interest rates, collateral needed, tenure, and fees charged. This is explained in greater detail in the following section.

Types of Financial Products Used in Retail Finance

Assets

Receivables like loans lent to borrowers are called assets for financial firms. These assets generate income for the financial company through interest income, and fees like late fees, cheque bounce charges, and application charges.

Lending can be of two types - Secured Lending when the loan is backed by collateral like a house, a car, two-wheeler, or a consumer durable. If the lender is unable to pay up, as a measure of last resort, the lender can repossess the hypothecated underlying car, house, or consumer durable. Unsecured Lending is loans made without any collateral. These can be fixed amount like personal loans or a revolving line of credit like credit cards (called revolving because customer can borrow any amount upto a certain limit and pay flexibly).

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* Ajay Ohri is an alumnus of IIM Lucknow, and has worked with some of the largest BPOs in India (including two BPOs listed on NYSE).
Currently, he is running his own database consulting firm, and is the founder of his website business
http://decisionstats.com.
The views expressed in the article are his personal views.
Article posted on August 24, 2008.