SBI Mutual Fund Launches Rs 250 SIP, Claims To Widen Financial Inclusivity

SBI Mutual Fund launched the Rs 250 Systematic Investment Plan (SIP) under the ‘JanNivesh’ scheme on Monday, February 17. Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch, while speaking at the scheme’s launch, said it was "one of my fondest dreams."

This initiative aims to make mutual funds accessible to a broader audience, said SBI Mutual Fund in a press release.

“The concept of the bottom of the pyramid and making it profitable is here and now,” Buch added.

Rs 250 SIPs: Sachetisation Of Mutual Funds

In December 2023, SEBI Chairperson Madhabi Puri Buch announced that Sebi was working with the mutual fund industry to see how SIPs worth just Rs 250 per month can be made viable, in order to facilitate better participation in mutual funds from “the bottom of the pyramid” for greater financial inclusion.

“In order to increase the reach of the Mutual Funds across the country, to facilitate participation from low-income group sections of the society and to achieve the larger objective of financial inclusion, a proposal of sachetisation of mutual funds has been envisaged,” Sebi had said last month in a consultation paper.

“Sachetisation of mutual funds will enable small ticket investment in mutual funds gradually on a periodic basis. This can assist in financial empowerment of the underserved section of the economy and nudge fund houses to expand their footprints to even remote locations in the country,” Sebi had said.

DP Singh, DMD & Joint CEO, SBI Mutual Fund, said, "Mutual funds have always aimed to democratise wealth creation, and this initiative is a significant step towards involving everyday savers in our nation's journey towards a 'Viksit Bharat'."

Few Mutual Funds Already Offer Small-Ticket Schemes

While some mutual fund houses already offer small-ticket SIPs as low as Rs 100 per month, the Rs 250 SIP will enable the entire industry to contribute to the cause of financial inclusion.

“Presently, while some Asset Management Companies (AMC) do offer SIP with small ticket size under some of their schemes, the product proposed to be offered under the sachetised mutual fund product i.e. small ticket SIP of Rs 250, provides an opportunity to the entire industry to participate in this cause of financial inclusion,” Sebi had said in its consultation paper.

Who Is The Target Audience?

The small-ticket SIPs aim to attract first-time investors from rural, semi-urban, and urban regions, providing them with an accessible entry point into the world of mutual funds. This scheme also caters to urban investors who may have limited access to financial advisors, self-employed individuals and small savers in the unorganised sector, and tech-savvy individuals looking for straightforward and adaptable investment options.

Nand Kishore, MD & CEO of SBI Mutual Fund, said, "By lowering entry barriers and leveraging digital platforms, we aim to attract first-time investors, small savers, and those in the unorganised sector, with SIP starting at just Rs 250."

"It serves as an entry point for new investors, allowing them to become acquainted with mutual fund investments before progressing to larger SIPs. The effort, which aims to promote financial inclusion, encourages systematic savings, particularly among low-income individuals, children, and new wage earners," said CA Niresh Maheshwari, Director of Wealth Wisdom India.