Identifying Factors influencing preference towards Post Office ...

IRACST- International Journal of Research in Management & Technology (IJRMT), ISSN: 2249-9563
Vol. 2, No.6, December 2012
Kisan Vikas Patra Scheme has been discontinued
by Government of India w.e.f. 1 st December, 2011
and this does not affect those who already have this
certificate.
II. REVIEW OF LITERATURE
The objective of this study is to explore factors that
influence investors to invest among post office
saving products. The present study examines the
factors that appear to exercise the greatest influence
on the investor decision making. It includes the
factors investigated by previous studies like
sources of investment advice, purpose of
investment, education and occupation. Based on
review of literature study identifies influence of
these factors on post office investors decision
making. In addition to factors extrapolated from
academic sources, study also introduces additional
factors generated through personal interviews that
are supposed to influence the investor decision
making. These factors are suggested by the
professional and contextual sources. These factors
that seem to be influencing individual investor are:
criteria of agent selection, motivating features of
post office saving schemes and demotivating
factors. Since respondents’ orientation may be
reflected in their answers, they are asked direct
questions covering all the shortlisted factors.
Factors considered by previous studies are as
follows:
1.) Sources of investment advice - NCAER Report
(2011) found that while applying for an IPO,
investors across all income/education categories list
newspapers as the single source of information. Dr.
C. Thilakam and Dr. Ganesan (2012) observed that
respondents have gained knowledge about
saving/investment avenues through business
channels. Sanjay Kanti Das (2011) reveals that for
investment in share market, friends & relatives are
the primary source of information and for insurance
market others like agents and development officers
plays the key role. Advertisement, brokerage firms
and other sources have almost a similar impact for
investment in mutual funds. His study shows that
the association between the source of awareness
and preferred investment avenue is not significant.
Study of Anna A. Merikas, Andreas G. Merikas,
George S. Vozikis, Dev Prasad (2011) concludes
that experienced investors rely mostly on wealth
maximization criteria and they are self-reliant
ignoring inputs of family members, politicians, and
co-workers when purchasing stocks. NCAER
Report (2011) found that a significant number of
investors find the advice of brokers more useful.
The survey reveals that while participating in
mutual funds as well as in the secondary market, a
significant majority depends on the advice given by
intermediaries and friends. Nick Chater, Steffen
Huck and Roman Inderst (2010) find that advice is
ubiquitous in the retail investment market. Trust in
advisors is high, but consumers are often unaware
of potential conflicts of interest. Sharon Collard
(2009) finds that many people may rely on
professional financial advice to make pension
purchase and investment decisions, research from
the UK and Australia has highlighted concerns
about the quality of advice provided to individuals.
Pravin Narayan Mahamuni, Santosh Kalabhau
Apte and Dr. Anand Ganpatrao Jumle (2011)
studied that people get the information regarding
investment opportunities present in the market
from their professional consultant. After that the
available information sources like as, TV ads, web
sites, newspaper, friends, etc.
2.) Purpose of Investment - Haruna Issahaku (2011)
found reasons account for households saving and
investment behaviour are to cope with unexpected
emergencies, buy some assets, pay for predictable
expenses, allow for future consumption, make
provision for retirement, to accumulate enough
funds for investment, employ the teaming
unemployed youth, reap higher returns and luxury.
The World Bank new flagship report (2012) finds
that macroeconomic vulnerability and the resulting
unstable income streams, the risk of
unemployment, and health risks are strong
precautionary motive for savings of Turkish
households. Ms. Babita Yadav and Dr. Anshuja
Tiwari (2012) revealed that majority of the
respondents invest in life insurance for tax benefit,
followed by the risk coverage & saving, premium
charges, security with high return and insurance
services.
3.) Educational Qualification - SK Das (2011) finds
that respondents with education below tenth
standard invested mostly in insurance followed by
banks and property. Respondents with education up
to under Graduate level mostly invested in
insurance products followed by share market,
banks and mutual fund. Respondents with
graduation or above education level invested
mostly in insurance products followed by share
market, banks and mutual funds. His study reveals
that the association between the education and
preferred investment avenue is not significant. In a
NCAER report (2011), it was found that twenty six
per cent of households with more than 15 years of
education prefer to invest in secondary markets.
Most participants in the derivatives market have an
average education between 11 to 15 years. Results
of study of Muhammad Naeem Akhtar, Kashif ur
Rehman, Ahmed Imran Hunjra (2011) indicated
that individual investors with higher educational
qualifications have more intentions for short term
investments as compared to the investors with other
qualifications. The World Bank new flagship report
(2012) discussed that the small group of highly
educated has a saving rate of more than 20 percent,
while the large group of least educated saves about
10 percent. The analysis also shows that the more
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