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Mirae Asset Financial Services which runs an NBFC to offer loans against mutual funds has allowed investors to pledge units of ELSS that have completed three-year lock in period.
With this, investors will be able to avail loans against units of ELSS. So far, investors of ELSS were not allowed to avail loans against mutual funds due to its lock-in period as the lender does not have an option to redeem during the lock-in period if the borrower fails to repay the dues.
In a press release, Krishna Kanhaiya, CEO, Mirae Asset Financial Services (India) said, “This significant change allows us to further broaden our already extensive list of approved mutual funds. The Tax Saver Funds (ELSS) category is predominantly popular amongst retail investors as they not only save tax by investing in these funds but also create wealth for them. Among the 35 schemes that have reached the three-year mark, an impressive 23 have nearly doubled investors' wealth in the past three years.”
The MF industry manages AUM of Rs.1.84 lakh crore. Retail investors account for 85% or Rs.1.57 lakh crore of the total ELSS AUM as on Sept 2023.
