The Securities and Exchange Board of India (SEBI) has categorized Indian cities into Top 30 (T30) and Beyond 30 (B30), where T30 consists of major metropolitan areas with established markets and B30 includes other cities with limited financial presence, including smaller and mid sized cities.

Traditionally, expansion of mutual fund houses in B30 cities has been challenging due to limited awareness, distribution channels, infrastructure, lower income levels, investment capacity, and the lingering effects of the pandemic. The low popularity of mutual funds in small cities and towns has generally been attributed to factors like the preference for guaranteed return investments (e.g., fixed deposits, post office schemes), which have been considered safer than mutual funds.

However B30 cities’ contribution to the mutual fund industry’s assets has steadily increased, contributing nearly 16% of the total assets of Rs 27.26 lakh crore. In February 2023, the contribution had reached 17%, amounting to Rs 6.9 trillion. SEBI’s significant role in promoting engagement between mutual fund houses and B30 cities has led to more branches and offices in these cities, directly serving investors.

To promote investor awareness, seminars and programs are conducted, while collaboration with local banks and financial institutions is expanding the investor base. Customized schemes and products catering to the specific needs of investors are also being innovated upon and technological advancements such as online platforms and mobile apps has enhanced mutual fund accessibility.

Are you a small city investor? Have you invested in Mutual Funds?