Over the past few years these observations acted like triggers to catalyze our interest in ‘finance‘ and its power to empower. Today, India has the world’s largest rural population, which is yet to be tapped to its fullest potential.
There exists a pertinent lack of financial planning in rural Indian households. According to a recent survey conducted by SEBI, less than 1% of rural people invest in financial instruments. Thus, financial literacy is a big challenge for the rural population in India; however, it also plays a crucial role in the economy’s prospects. At Rural Invest, we concluded that the rural population of India suffers from a lack of financial literacy and barely has any personal financial knowledge.
It was then when we embarked on the journey to find an effective solution to this critical issue, from which India is currently suffering. It was shocking to know that only 0.23% of the Indian population is aware of SIPs and Mutual Funds. We initially started to target maids & drivers working in our neighborhood and started educating them & facilitating their investments into Mutual funds.
Initially, they found it hard to believe that by merely saving small amounts around Rs. 500-700 p/Month through micro-SIPs (Systematic Investment Plans), they will be able to ensure financial stability for their families. Taking this forward, we now intend to inculcate a habit of saving in our country’s rural population so that they can make financially informed goal-oriented decisions towards securing a better future for themselves & their family.
It is because the financial situation and behavior of rural households not only affects their livelihood; it also has a significant influence on the stability of the financial system and future economic growth of the country. However, the behavior of rural household investors regarding saving & investment behavior is inconsistent and unpredictable because of the lack of financial education, impoverished lifestyle, unstable occupation, and fluctuating income.
They are not able to save their money due to these irregularities, and even if some households save, it is usually informal savings in the form of cash, which might pose liquidity challenges during unexpected situations like Demonetization or COVID-19. Lack of awareness about ways & benefits of investing in financial assets leads to an increase in informal savings & investments, which ultimately does not contribute to the capital formation of the country.
Thus, we decided to start Rural Invest which is the need of the hour to leverage finance’s power to empower and tap the untapped Indian rural market. Rural Invest aims to spread awareness about financial literacy amongst rural households & inculcate the habit of saving & investing. Thus, Rural Invest is an effective avenue for Rural India for saving, borrowing, investing, and mitigating future financial risks, thereby also ensuring access to liquidity in times of distress.
The core thesis behind Rural Invest is to leverage the power of finance to empower and enable all sections of the society to strategically invest money in financial instruments through SIPs of a variety of denominations.