The Hindu Business Line : ‘Awareness on mutual fund investments weak’

Scope for spread
Internet users can be tapped in a big way
Retail investors can be best reached by intermediaries
Use of vernacular languages will enable villages to connect

Our Bureau

Kolkata, Aug. 13 For all the developments that have taken place in the mutual funds market, the average level of awareness is still pathetic. Or so suggests Computer Age Management Services (CAMS), the registrar that caters to a large number of India’s fund houses.

A survey done by CAMS through IMRB (Indian Market Research Bureau) in a select location not long ago has revealed a startling fact: There is less than 50 per cent awareness of funds. Additionally, there is less than 50 per cent awareness on two key fronts – regulations and returns.

“The awareness is weak, considering especially the percentage of households that invest today,” said Mr R. Vetrivel, Chief Marketing Officer, CAMS. He was addressing a meeting recently organised by the Indian Chamber of Commerce.

Options mooted

While the survey took place some time ago, the findings were an eye-opener of sorts and there has not really been a significant change since then. Despite this, CAMS is of the view that certain alternatives may well arise and are even worth considering. Reaching investors through the Internet is one of these alternatives.

Net users — there are 50 million of them in India — may be tapped in a big way. However, a key percentage of them is made up of teenagers, who may not be in a position to invest in funds. Besides, technology is not so easily available in smaller centres.

“Reaching retail investors can be best done by intermediaries. The latter should be enabled by technology,” Mr Vetrivel noted, adding that intermediation should be considered as a career option by more people.

Direct marketing

There are examples too. The insurance industry, for instance, has nurtured a large body of agents. Direct marketing companies like Amway too has a sizeable number of representatives.

Mobile phones will have to be used effectively to tap the investing populace, it is felt. There are 180 million mobile phone subscribers in India, a figure that is estimated to go up to 500 million or so by 2010-11. This will imply a straight 45 per cent penetration.

Use of vernacular languages will allow villages to connect more easily, a development that is being felt in certain regional pockets. Bangladesh, for instance, has seen payment of utility bills on mobile phones. In some other countries, money transfer is possible on phones too.