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Soon investors can start SIP with as low as Rs.250 per month.
SEBI is working with the MF Industry to reduce the monthly minimum SIP contribution to Rs.250 per month from Rs.500 per month, said Madbhai Puri Buch, Chairperson, SEBI. She was speaking at a Business Today event held recently in Mumbai.
Madhabi said that the market regulator focusses on increasing financial inclusion and mutual funds are a great financial product to achieve this target.
The chairperson said that while the market regulator wants to reduce the minimum monthly SIP contribution to Rs.100, fund houses said that it will not be viable for them. Hence, the market regulator is working closely with fund houses to reduce the monthly SIP contribution to Rs.250, she said.
Madhabi further said that the MF industry should learn from sachetization of FMCG goods that made their products more affordable to wider section of the society.
Currently, a few fund houses offer micro SIP facility with the minimum monthly SIP contribution of Rs.100. in fact, a few years back, a few fund houses had tied up with third party institutions like NGOs, micro finance institutions and co-operative banks to promote micro SIPs.
Micro SIPs work on a financial inclusive model which aims to collect tiny sums from daily wage earners in semi urban and rural pockets of the country. Aditya Birla Sun Life, Axis Mutual Fund, ICICI Prudential, Nippon, SBI, and were among those which used to offer micro SIP options. However, micro SIPs did not take off due to high acquisition cost and logistics issues.
Of late, the cost of acquisition and logistics have come down drastically with technology and emergence of online distributors.
It will be interesting to see how the Rs.250 SIPs fare for the Rs.50 trillion mutual fund industry.
