Asset management company SBI Mutual Fund on Monday launched a systematic investment plan (SIP) aimed at democratizing access to the product. An investor can invest as low as Rs 250 per transaction under the JanNivesh SIP scheme, which was launched in THE presence of Sebi Chairperson Madhabi Puri Buch. Investors typically put Rs 500 in SIP, which could go down to Rs 100 depending on the scheme in which money is being put. With the aim of deepening the MF reach, the lower SIP of Rs 250 was considered, which is akin to the idea of sachetisation effectively used by consumer goods companies.
The latest offering will be available on SBI Yono app for all its users and on other fintech platforms like Paytm, Zerodha and Groww and is designed to enable small savers and first-time investors from rural, semi-urban and urban regions to invest to bring them into the ambit of financial inclusion. Terming the launch of the Rs 250 SIP as one of her “fondest dreams,” Buch said that the offering is more than just a scheme.
“I think this is really what we are talking about, that as India grows and wealth gets created, it gets distributed in the hands of everybody, even if it is in a very, very small way. So, to me, this is really the meaning of Jannivesh,” she said. Stating that these products currently available had long break-even period and were not viable and therefore were not being pushed much, the Sebi chief said the effort has been to bring down the break-even period to around two to three years.
“The concept of the bottom of the pyramid and making it profitable is here and now, thanks to technology. And to my mind, this is perhaps going to be the biggest and best manifestation of that,” added. “It is so wonderful to see that the entire ecosystem has come together. The mutual funds, the RTAs(Registrar and Transfer Agents) the KRAs (KYC Registration Agencies) the depositories, everybody came together in the spirit of partnership to make the product break-even between two to three years so that every mutual fund sees it as a real growth opportunity and not as a cost set.” “If it (the SIP amount) exceeds that, we knew that no CEO would push it,” she said.
According to her, the transaction charges when compared to the small SIP amount were significant, and by removing these charges, we are ensuring that every rupee we invested goes towards wealth creation and termed the SBI’s move of waiving of transaction charges for bank transfers related to these micro SIPs as “icing on the cake.” She noted that even global platform foreign investors find it hard that a USD 3 (Rs 250) monthly investment could be viable.
“This 250 rupees, if and when we discuss this globally (at a platform where all the market regulators get together) or when some foreign investors come and meet us, they can’t believe it. It’s like a USD 3 investment per month, and you are saying that this is going to be viable. And I said, yes, that’s the whole idea,” she said. It may be noted that there already were asset management companies offering micro-SIPs, some as low as Rs 100.
“By lowering entry barriers and leveraging digital platforms, we aim to attract first-time investors, small savers, and those in the unorganized sector, with SIP starting at just Rs 250,” SBI Mutual Fund’s managing director and chief executive Nand Kishore said. “As we transition into a new phase of financial inclusion, innovation and inclusivity are essential. Our focus is on developing products, processes and technologies that make inclusivity seamless and effective,” SBI chairman C S Setty said at the launch.
“In our view, I think, one of the safest investments that has picked up in the last decade or so is SIP. I believe that savings, micro-savings, micro-insurance, and micro-investment are not mutually exclusive. They all will be strengthening the fabric of Indian families’ economy,” he added.
The fund house is targeting the product at first time MF investors, urban investors, unorganized sector workers and digitally proficient investors. SBI has also recently launched a deposit product c, ‘Har Ghar Lakhpati,’ he said adding that as many as 6.3 lakh accounts have already been opened iIn 45 days of launch. He also noted that SBI already has a 33 per cent share of Jandhan accounts and it also has 40 per cent in JanSuraksha scheme.
According to the product literature, the SBI MF instrument can be accessed on SBI Yono app and on other platforms such as Paytm, Zerodha and Groww and it will help small savers and first-time investors from rural, semi-urban and urban regions to invest in mutual fund schemes. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
