Fund houses are now increasingly targeting micro and mini investors. And to cater to this segment, they are lowering the entry barriers for investment
Sample this. Soon after Reliance Mutual Fund announced a reduction in its minimum systematic invest plan (SIP) instalment to as low as Rs 100 per month, ICICI Prudential followed suit and introduced a SIP of Rs 50.
The fund houses' move to reduce the SIP amount is aimed to bring more investors into their fold. Most of the funds houses have a minimum SIP instalment amount between Rs 500 and Rs 1,000.
For the Reliance SIP, investors will have will pay 2.25 per cent entry load and will have to commit a minimum of 60 instalments. Transaction can be effected only through ECS auto debit facility.
Investors opting for ICICI Pru's MicroSIP will have to pay an entry load of 2.35 per cent. A 3 per cent exit load will be levied if redemption is done within five years (if the amount is between Rs 50 and Rs 100). The lowering of SIP amount may be helpful for the people employed in the unorganised sector.
Earlier, UTI had taken the initiative to attract people from the unorganised sector by
introducing micro pension scheme for women. It had partnered with Shree Mahila Seva Sahakari Bank, where the members can contribute small amounts (which can be less than Rs 50) every month in UTI Retirement Benefit Pension Fund. UTI had also partnered with the Bihar State Co-operative Milk Producers Federation (COMPFED) to enable the latter's members plan their retirement.
It will be a challenging task for the fund houses to mobilise lower income group people to contribute a regular amount each month for over three years. This group mainly comprises people like street vendors, taxi drivers, construction workers etc.
This is a step in the right direction and more fund houses may follow suit.
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