₹250 per month: The idea behind a brand new SIP
₹250-per-month micro-SIP, chairperson Madhabi Puri Buch said. It would add another rung in India’s financial inclusion ladder. Mint explains what micro-SIPs are and what the industry thinks of them.
Micro-SIPs are an affordable alternative to a traditional systematic investment plan. They require a monthly contribution of only ₹50 to ₹100, while a traditional SIP requires a minimum of ₹500. Micro-SIPs are designed for investors with small corpuses, including rural residents, daily wage earners and students.
Aditya Birla Sun Life Mutual Fund is reportedly developing the country’s first-ever ₹250-per-month SIP. According to the Association of Mutual Funds in India (Amfi), there were a total of 93 million SIP accounts in July with a total SIP corpus of ₹23,332 crore. Read more: Equity returns: How much should you really expect? The idea is to democratize the nation’s wealth creation process—just like selling shampoo in small sachets.
Market participants think it’s a good starting point for financial inclusion as today’s small investors may be tomorrow’s big ticket investors. With digitization touching almost every corner of the country, the market regulator wants to leverage India’s existing digital public infrastructure to provide accessible investment opportunities to the smallest of investors. The Sebi chief emphasized better use of technology to make the process of onboarding and servicing investors more efficient.
Micro-SIPs are not a new concept. Several mutual funds offer SIPs which require a minimum contribution of ₹50 to ₹100 per month. But none of them offer a ₹250-per-month SIP.
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