The Securities and Exchange Board of india (SEBI) launched the ‘Chhoti SIP’ scheme in march 2024 to promote small-ticket investments in mutual funds and bring more first-time investors into the market. However, SEBI’s Executive director Amarjeet Singh has revealed that the scheme is yet to gain traction. Here’s a breakdown of what it is, why it matters, and what’s holding it back.
🏦 1. What is ‘Chhoti SIP’?
‘Chhoti SIP’ is a small systematic investment plan designed for micro-investors who want to start investing with as little as ₹250–₹500 per month. The goal is to make mutual fund investing accessible for low-income earners, students, and rural households.
🎯 2. Objective of the Scheme
SEBI launched this initiative to:
Improve financial inclusion
Encourage regular savings habit among first-time investors
Bring Tier-2 and Tier-3 cities into the mutual fund ecosystem
🛑 3. Why the Scheme Hasn’t Picked Up Yet
Despite its benefits, adoption remains low due to several factors:
Lack of Awareness: Many potential investors in smaller towns are still unaware of mutual funds and SIPs.
Distributor Interest: Low-ticket SIPs mean lower commissions for distributors, so they are less motivated to promote them.
Digital Divide: Rural areas still face internet and smartphone penetration issues, limiting online onboarding.
Market Volatility Fears: First-time investors hesitate to invest in mutual funds when markets appear risky.
💡 4. What SEBI Plans to Do Next
SEBI and AMFI (Association of Mutual Funds in India) are planning:
Investor Awareness Campaigns in regional languages
Simplified Onboarding Process using UPI AutoPay for easy small investments
Incentives for Distributors to encourage them to promote ‘Chhoti SIPs’
📈 5. Why You Should Consider a Chhoti SIP
Even with small amounts, SIPs help:
Build long-term wealth through compounding
Develop financial discipline
Reduce risk by averaging market fluctuations
✅ Bottom Line: While SEBI’s ‘Chhoti SIP’ is still in its early days, it holds huge potential for democratizing investing in India. Greater awareness and easier access could soon turn it into a popular entry point for millions of first-time investors.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk..jpg)
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