Focus on jar, Man from behind placing coins inside the jar – Concept of monthly SIP or systematic investment plan.
| Photo Credit:
lakshmiprasad S
Shantabai More, a housemaid, was happy when her employer opened two SIPs of ₹250 each as an incentive. However, she was concerned seeing her savings swinging from profit to loss every month and finally after strict instructions decided not to look at it for three years.
Thanks to market regulator SEBI, sachetisation of mutual fund schemes through ‘choti’ SIP of ₹250 is working wonders even as the high transaction costs for fund houses remains a concern till it attains a certain economic scale.
In an attempt to encourage “sachetisation” of mutual fund schemes, market regulator SEBI last February halved the minimum SIP investment to make it more accessible for new and underserved investors.
The country’s largest fund house SBI MF said it has added one lakh JanNivesh SIP accounts and is working on a technology to reduce the cost burden. Similarly, other leading fund houses such as ICICI MF, HDFC MF, Nippon MF, Aditya Birla Sun Life MF and Kotak Mahindra MF have launched micro SIP and vying for market share.
DP Singh, Deputy MD and Joint CEO, SBI Mutual Fund, said the potential of JanNivesh is huge, but pointed out the constraints in onboarding millions of new investors include higher acquisition cost and remunerating the intermediaries as per existing rules, the efforts not aligning with the returns.
“Onboarding millions of people, requires either substantial manpower or robust digital tools and the entire industry is focusing on the latter. We want more investors to invest and over the period achieve economies of scale,” he said.
As industry leaders and market maker for new products, he added that the fund house is not concerned about economic viability as it brings more people into the fold to benefit from economic growth and capital markets.
Awareness fund
To reduce the financial burden, SEBI has allowed MFs to use the Investor Education and Awareness Fund to cover a part of the costs. The regulator expects AMCs to break even on these small-ticket SIPs in two years. Distributors and execution-only platforms promoting these SIPs will receive a ₹500 incentive per SIP, along with their regular commission.
However, the incentive is available only for first three micro SIPs opened by an investor identified by PAN.
With the top fund houses going aggressive on micro SIPs, it becomes difficult for new and emerging MFs to take up the plan aggressively, said CEO of a newly launched fund house.
Vaibhav Jalan, CBO, Zerodha Fund House, said the digital-first fund house is committed to enhancing financial inclusion by minimizing entry barriers.
“While almost half of our investors transact below ₹1,000, we have also processed over 2.5 lakh transactions of just ₹100 each. In fact, the volume of small-ticket investments has doubled in the last 18 months alone,” he added.
Published on July 8, 2025
