Less than 1% of rural households invest in stocks: Sebi survey

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By IE&M Research

A survey conducted by market regulator Sebi has revealed that not even 1% of rural households in India are investors in stock markets. The survey says that there are a mere 32 investors (0.234%) amongst the 13,697 rural survey respondents. Of these investors, 21 (66%) invest in mutual funds (MF), 4 (12.5%) invest in equities and 7 (22%) invest in bonds and debentures. However, 95% of rural survey respondents have bank accounts, 47% have life insurance, 29% have post office deposits and 11% save in precious metals.

Sebi said the survey first listed a set of 204,694 households and basic information about demographics, income, savings and investments were collected. In the second step, a subset of 50,453 amongst these listed households were chosen to conduct the final survey. The data was used to create an estimate of the total number of investing households at the end of 2015. Using a bootstrapping methodology project, it was estimated that there were a total of 3.37 crore investor households in India. Of these, 70% (2.37 crore) reside in urban areas while the other 1 crore were rural households.

Overall, including both urban and rural households, more than 95% Indian households prefer to park their money in bank deposits, while less than 10% opt for investing in mutual funds or stocks. The survey, conducted across urban and rural areas of the country, showed that life insurance (61.7%) was second most preferred investment vehicle, followed by precious metals (30.3%), post office savings (30.1%) and real estate (16.5%), as the top five investment options. MFs came at sixth place (9.7%), followed by stocks (8.1%) as investment vehicles for the urban households.

 

About the author: IE&M Team

Indian Economy & Market is an Indian media and information platform producing data-backed news and analysis on all the vital elements at the intersection of the economy, stock markets, mutual fund, insurance, commodities, currency, technology, startups and business.

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