Mutual fund investments in sachets, anyone? – DNA

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Technology is now empowering finance companies to offer ‘byte sized investments’ to the common man who cannot or does not wish to invest huge sums of monies into high-risk financial instruments like mutual funds.

“Technology has helped in ensuring that even small investments can be made on a regular monthly basis without much hassle. This includes everything from the use of ECS to investing through an online account. The lower cost is beneficial for investors as their returns go up without any additional effort,’’ says Arnav Pandya, certified financial planner (CFP).

Increasingly, investing in mutual funds or buying insurance will be as simple as going to your local kirana store. Fintech firms are harnessing the power of technology to offer investment options in small, easily affordable packages. Nearby Technologies, has launched an application PayNEARBY that enables retailers across the country to offer digital financial services to their customers using their mobile phones. “Thus, your neighbourhood kirana store would serve as a Fintech Mart. Stores can accept card payments without card machine and help customers to pay/withdraw money from their bank account by using Aadhaar,’’ says Anand Kumar Bajaj, CEO, Nearby Technologies.

Nearby is now planning to simplify and granularise mutual funds and bring it to the last mile, that is, to the kirana stores, where one can buy it in sachet packs of Rs 10 (insurance) and or Rs 100 (mutual funds). “The idea is to transition mass market savings into the formal economy for the first time. Thus, those who use avenues such as chit funds and pat pedhi will now have easy access to mutual funds,’’ says Bajaj. Chit funds and pat pedhi are popular savings avenues used by small-time investors.

Mutual funds have seen an increase in market share with more and more retail investors opting to invest in equity markets through the mutual funds route. “Small retail investors are now the biggest drivers of mutual fund activity in the country,’’ says Pandya.

However, many potential investors are hesitant about investing in financial products and continue to stick to traditional investment options of real estate or gold.

Here the mutual fund in a sachet offering is expected to prove to be a game changer for the industry. “If one crore small-time investors invest about Rs 100 each month, imagine the amount of money flowing into the formal economy,’’ says Bajaj.

Sachets offer the customer an inexpensive option of using a new product. After a few trials, it is expected that customers get hooked onto the products and are open to upgrading themselves to more expensive products of the same category/brand.

By offering ‘byte sized investment options,’ mutual funds are hoping to replicate the success that FMCG companies had with ‘shampoo in a sachet’ offerings. The Re 1 sachet of Chik shampoo, first introduced in 1983 by Cavin Kare, ended up revolutionising the industry with sachets comprising a major chunk of the total volume of the shampoo market eventually.

While the industry has been talking of offering mutual fund offerings in a sachet form for more than 10 years now. But due to high costs and logistical problems, the idea has remained largely on paper only until now.

“While the costs more or less remain the same from a manufacturer perspective, things are very different from a distributer perspective. An offline distributor will find it difficult to reach a customer who will invest Rs 500, as the quantum of investments may not cover the costs involved, such as the cost of commuting and getting the customer,’’ says Navin Chandani, chief business development officer, BankBazaar.

The situation has changed, thanks to digitisation. Technology has helped reduce logistical hurdles. “With processes getting automated, the hassle of paperwork as well as the human bias in recommending funds gets eliminated. Additionally, technology has facilitated a highly customized solution at a fraction of the initial cost,’’ says Amar Pandit, CFA, founder & chief happiness officer,

Upendra Namburi, chief innovation and marketing officer, Bharti AXA General Insurance, said, “Technology such as AI, blockchain, cloud based infrastructure, predictive analysis can help the industry grow at a much faster pace and cut expenses significantly. Advent of new technology allows ease of doing business and providing relevant solution to customers.’’

The increasing reach of mobile technology and smartphones across the country has made byte sized investment options a reality.


  • MFs are hoping to replicate the success FMCG firms had with ‘shampoo in a sachet’
  • Tech is facilitating a customised solution at fraction of initial cost
  • Small investors are the biggest drivers of MFs in the country

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