Broadening wealth creation, SBI MF, SBI launch Rs 250 SIP scheme 'JanNivesh'

In the past decade, the launch of Pradhan Mantri Jandhan Yojana has given a big boost to the banking sector and helped drive the country's financial inclusion initiatives. The country's largest fund house, SBI Mutual Fund, in collaboration with State Bank of India, is launching a JanNivesh scheme, offering flexible SIP (systematic investment plan) options as low as Rs 250, a move that hopes to bring millions of new investors into the mutual fund ecosystem.

Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India has been in favour of Rs 250 micro-SIPs to make mutual fund investments available to a larger audience.

JanNivesh SIP is designed to enable small savers and first-time investors from rural, semi-urban and urban regions to invest, thereby promoting financial inclusion.

The low-entry threshold of Rs 250 with the option to invest daily, weekly or monthly makes it easier for individuals to start their investment journey. Also, SBI will not be charging any transaction fee, so it will also be low cost.

To be sure, there already were asset management companies offering micro-SIPs, some as low as Rs 100. But Buch noted that these products currently available had long break-even period and were not viable and therefore were not being pushed much.

She said the effort has been to bring down the break-even period to around two to three years.

“The concept of the bottom of the pyramid and making it profitable is here and now, thanks to technology. And to my mind, this is perhaps going to be the biggest and best manifestation of that," said Buch.

SBI already has 33 per cent share of Jandhan accounts, according to C.S. Setty, the chairman of SBI. It also has 40 per cent in JanSuraksha scheme (micro-life insurance, accident insurance and Atal Pension Yojana).

With JanNivesh, the lender will cover the investment space, pointed out Setty.

SBI has also recently launched a deposit product called Har Ghar Lakhpati. In 45 days of launch, 6.3 lakh accounts have been opened, said Setty.

"One of the safest investment that has picked up in the last decade or so is SIP. I believe that savings, micro-savings, micro-insurance, and micro-investment are not mutually exclusive. They all will be strengthening the fabric of Indian families' economy," said Setty.

The JanNivesh facility will be available on SBI's YONO platform as well as other fintech platforms like Zerodha, Paytm and Groww.

"JanNivesh is a pivotal step towards democratising wealth creation and promoting financial inclusion in India. By lowering entry barriers and leveraging digital platforms, we aim to attract first-time investors, small savers and those in the unorganised sector," said Nand Kishore, MD and CEO of SBI Mutual Fund.

For now, JanNivesh SIP will only be offered in SBI Balanced Advantage Fund.