AMFI Joins Hands with India Post to Boost Mutual Fund Reach in Rural India

The Association of Mutual Funds in India (AMFI) has launched a major new initiative to expand its investor base, especially in rural areas. In partnership with India Post, AMFI plans to train about 1 lakh postmen to become mutual fund distributors. This step could bring investment options closer to people living in smaller towns and villages.

Focus on 4 States to Start With

This project will first begin in 4 states, including Bihar, Andhra Pradesh, Odisha, and Meghalaya. These states will serve as testing grounds for the plan. In these regions, AMFI also aims to train college students to become distributors. The target is to add 20,000 new distributors within the first year.

By the end of this year, AMFI wants every district in the selected states to have at least 10 trained distributors. The goal is to double this number to 20 per district next year.

Postmen to Become Financial Advisors

Through this partnership, postmen will take on new responsibilities, similar to bank relationship managers. They will help people invest in mutual funds and other savings products. This also gives India Post a chance to modernise its services and turn its branches into profit-making centres.

This move could also help people without Aadhaar numbers complete their KYC (Know Your Customer) process more easily, solving a major hurdle in investing.

Building Skills Through Education

AMFI is also working with top academic institutions to set up a "train the trainers" program. This program will build a network of skilled trainers who can help local distributors learn and grow. It is a long-term plan to strengthen mutual fund distribution across the country.

Huge Growth Potential in Smaller Towns

At present, 45% of mutual fund investments come from the bottom 30 towns, while the rest comes from India’s top cities. This shows there is a lot of untapped potential in rural and semi-urban areas. Though around 30,000 new distributors join the industry each year, only about 10,000 stay. This makes AMFI’s new efforts even more important.

Read more: Jio BlackRock Flexi Cap Fund Allocates 10% of Assets to REITs.

Conclusion

With mutual fund folios growing from 2.1 crore in 2019 to 5.6 crore now, AMFI sees a great opportunity ahead. With 80 crore bank accounts in India and mutual fund assets at just 21% of GDP, there is plenty of room for growth. Through this partnership with India Post, AMFI hopes to reach millions of new investors and build a stronger financial future for the country.

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