The state where Ponzi schemes thrive, but mutual funds barely exist

Subscribe to enjoy similar stories. India’s Mutual Funds Sahi Hai campaign was meant to revolutionize investing. But in Manipur, the country’s least-penetrated mutual fund market, it barely registered.

For Maibam Nirbuala Devi, financial literacy came too late. Together with her family, she invested ₹48 lakh in a local scheme promising 5% monthly returns—only to find out it was a Ponzi scam. “In channels around here, the ads were about the schemes I invested in," said Devi, who now faces mounting family tensions over the lost money.

“My friends talked about them, and their ads popped up frequently." Now, the scam operator is in jail, and her money is gone. Read this | India's stock market rally looks like a self-sustaining Ponzi scheme Manipur has the lowest mutual fund penetration in India. Here, informal chit funds—known as marup—and high-return unregulated deposit schemes dominate investment conversations.

Devi knows the difference now—but with her savings wiped out, investing in mutual funds is no longer an option. Her case is far from unique. According to the Enforcement Directorate (ED), the scheme Devi invested in collected ₹580 crore from depositors.

For perspective, the entire mutual fund industry in Manipur holds just ₹1,600 crore in assets. One Ponzi scheme alone is believed to have raised ₹2,000 crore, defrauding thousands, including homemakers and rickshaw pullers. The problem runs deeper than misplaced trust.

A Crisil report ranks Manipur as having the lowest financial literacy among India’s small states. But efforts to fix this remain insufficient. Regulators and asset management companies (AMCs) have conducted 43,826 investor awareness programmes nationwide.