In recent months, the mutual fund (MF) industry has witnessed a significant rise in investors from rural and semi-urban regions of India. Interestingly, these investors have now outpaced their urban counterparts in opening new accounts under the systematic investment plan (SIP) for mutual fund schemes.
Industry data reveals that investors from B30 areas, which are located outside the top 30 cities, accounted for 60% of new SIP accounts in active equity schemes last year. This trend underscores a growing awareness among individuals from small towns and villages about the benefits of mutual fund investments, signaling a shift in investment behavior toward more financially-savvy choices.
To better understand the landscape of mutual fund investments, the industry classifies investors into two categories:
Several factors have contributed to the increasing participation of investors from B30 areas:
The surge in SIP investments from B30 cities represents a positive development for the mutual fund sector. It indicates that investment habits are no longer confined to India’s major cities, and mutual funds are gaining a stronger foothold in smaller regions. This shift not only broadens the investor base but also strengthens the long-term sustainability of the industry.
The increasing participation of investors from rural and semi-urban areas is also contributing to the success of India’s financial inclusion initiatives. As more individuals embrace investing, they are not only enhancing their personal savings but also becoming financially empowered. This growing trend is playing a crucial role in making financial services more accessible to the country’s diverse population, ultimately advancing the goals of financial inclusion.
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