Micro SIP of Rs.250 a month is a good step but here are the challenges
As an observer of financial markets, I see this as a positive development in our gradual progress towards wider financial inclusion. The Rs.250 SIP potentially opens the doors for many Indians who have previously been unable to participate in mutual fund investments. By lowering the entry barrier, Sebi invites a broader segment of our population to consider mutual funds as an investment option.
This initiative aligns with one of the key objectives of mutual funds, particularly in the Indian context—to make a range of stocks and bonds accessible, with relatively small amounts of money. Mutual funds pool investments from numerous individuals, allowing them to access a diverse portfolio of securities that might otherwise be challenging for individual investors to compose independently. The Rs.250 SIP extends this concept further, potentially bringing professional fund management and diversified portfolios within the reach of more people.
This was referred to by the Sebi chief as ‘sachetisation’ of mutual fund products, drawing a parallel to small packaging, which made consumer goods more widely available. It’s an apt comparison, as this strategy could make mutual funds more accessible in a country where a significant portion of the population might find the current minimum SIP amounts of Rs.500 or Rs.1,000 out of reach.
While this initiative is a step in the right direction, maintaining perspective is important. The mutual fund landscape in India still faces significant challenges, particularly in terms of
