SEBI’s proposal to introduce a micro-SIP of ₹250 in mutual funds has received mixed reactions from industry stakeholders. While many intermediaries see it as a positive move toward financial inclusion, concerns have been raised about the operational costs associated with it.
The initiative aims to expand mutual fund penetration, particularly among lower-income groups. Some fund houses already offer SIPs as low as ₹100 or ₹250, but SEBI’s standardization of the ₹250 SIP is expected to streamline the industry.
Akta Sehgal, Founder of Manas Wealth, supports the move, calling it a significant step in making mutual funds more accessible at the grassroots level. She believes it will encourage financially weaker sections and homemakers to develop investment discipline without feeling a financial burden.
However, Amit Bivalkar, MD & CEO of Sapient Wealth Advisors & Brokers, highlights concerns about operational expenses, including Registrar and Transfer Agent (RTA) fees, payment gateways, and KYC costs, which may not be sustainable for a ₹250 SIP.
Kolkata-based MFD Mukesh Dokania echoes similar concerns, stating that distributors may face challenges due to paperwork, ensuring SIP continuity during market volatility, and educating first-time investors from lower-income backgrounds. While he acknowledges the initiative’s benefits, he notes the practical difficulties in implementation.
Conversely, Mumbai-based MFD Mukund Seshadri sees this as an excellent opportunity to introduce weaker sections and younger investors to saving and investing habits.
According to SEBI’s proposal, industry participants have agreed to offer discounted rates to help asset management companies (AMCs) recover costs within two years. The initiative will be supported by subsidized charges from intermediaries and reimbursements from the Investor Education and Awareness Fund.
To further incentivize participation, SEBI has suggested a ₹500 incentive for mutual fund distributors (MFDs) and execution-only platforms (EOPs) for each investor they onboard. However, this incentive will only be paid after 24 successful SIP installments. Investors will also be able to use NACH and UPI auto-pay for micro-SIPs, with no transaction charges payable to distributors.
Industry experts believe that while smaller SIPs could serve as an entry point for first-time investors, a shift to larger investments over time will be necessary for long-term viability.
Sandeep Bagla, CEO of Trust MF, calls the move a strong push for financial inclusion but emphasizes that associated costs—such as transaction fees, RTAs, and banking charges—must be reduced to make it economically feasible. He suggests that only high participation volumes can help absorb these costs.
R.K. Jha, MD & CEO of LIC MF, believes this initiative will attract low-income investors, young earners, and even children, fostering a savings culture. He sees the “sachetization” of mutual funds as a powerful tool for wealth creation, predicting a potential increase in mutual fund investors from 50 million to 200-300 million in the near future.
