Indian Stock Market News and Views.
What is Micro Finance
In India Micro finance seems to be the buzz in the streets of the Mutual fund industry. The industry is not grown like what is found to be in the other developed countries. Keeping in mind with the vast untapped market of India Mutual fund companies are getting with new plans which would range from Rs.10 to 300 per day. The target of the micro finance is for the rural and semi urban area households with low income. To tap the market major fund houses like UTIMF and SBIMF have been associated with many NGO’s and other micro credit institutions locally. The first one to get into the micro financing market was Bharati AXA with their Bharati AXA Equity Fund by the last of September which was with a minimum investment of Rs.300.
Holding the tail came SBI Mutual Fund with its equity based micro finance investment plan named Chota SIP were the minimum was of Rs.100/- per month with a lock in period of five years. Sahara group recently field application with the SEBI for a 100% debt fund “Sahara Daily Fund” where one can make Rs.10/- per day. UTI came with Retirement benefit Pension Fund with Rs.50/- per month. The fund houses would not be able to make up with the Micro Finance initially but in a span of two to three years they would make them within the lines. It would pull in a mass amount of people into the industry who without it will never be in touch with the stock markets.
Targeting the daily earning class and other low income groups the MF houses targets a good revenue in the long run and would be able to pump in more money into the system. The results of managing these vast amount of small investors would be the hard bet, and that would really take its time to see how the companies cope up with the administrative difficulties of handling a huge customer base with too low payments. Many companies are looking into the system before jumping in.
What do you think ? Will Micro Finance be a success in India? How do you rate it and what is your opinion and suggestions about this system? Comments invited.
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