‘Choti SIP is a chance for the industry to give back’: Anthony Heredia on what could make the initiative a success

AMFI and SEBI announced the launch of Rs 250 SIP or Choti SIP in February 2025 as a means to make it easier for small investors and first-time participants to enter the mutual fund space.

As India's mutual fund industry aims to deepen financial inclusion, Choti SIP could emerge as one of the elements that will help drive growth, according to Anthony Heredia, CEO, Mahindra Manulife AMC and Vice Chairman of AMFI. Speaking at the CII Mutual Fund Summit, Heredia said that he believes it can democratize investing for small investors and act as a “giving back” opportunity for the mutual fund industry.

Answering a query on whether the Rs 250 SIP had the power to be a growth driver for the industry, Heradia noted that that there were a couple of reasons why he sees the initiative being a success. He noted that while previously there were people operating at Rs 10, Rs 100 SIP levels, they have been only a few players operating in a few schemes and a few cities. Now, he added “Every mutual fund will now offer it in every diversified equity fund.”

Another reason why he optimistic on the growth of Rs 250 SIP is distributor incentives. “If one does the math, Rs 250 into 12, even over five years at a 1% commission, doesn’t even pay the transportation cost two or three times over. So there’s an introduction of a Rs 500 incentive at the end of two years (which is of advantage),” he said.

The incentive he explained is designed to reward long-term effort from distributors. “The fixed cost (KYC, Payment Gateway etc) is going to be dealt with by the Mutual Fund Sahi Hai platform and Capital Fund. So each fund company is not bearing it alone—it’s the industry that’s recognizing the distributor’s spend," he explained.

According to Heredia, regulatory support has made the model even more viable. “The regulators made everybody in the cost ecosystem say that they will deliver this product at 20% of what they charge. So it's actually more profitable," he explained.

He added that another thing that people forget is the role MFDs have played an important role in bringing in new investors. "The number of new investors brought in by MFDs over the last 5–10 years is under-recognized," he added, highlighting the role these distributors will be playing.

Ultimately, for the MFD community and the AMC industry, he noted that Choti SIP could be a giving back opportunity. ""I call the Choti SIP a giving back opportunity. This idea of giving back is powerful, and one would hope that, at least conceptually, it's embraced as a meaningful way to make a difference," he said.

AMFI and SEBI announced the launch of Rs 250 SIP or Choti SIP in February 2025 as a means to make it easier for small investors and first-time participants to enter the mutual fund space.