In a bold move to deepen financial inclusion and democratize investment access, the Association of Mutual Funds in India (Amfi) has launched a grassroots expansion initiative targeting four states—Bihar, Andhra Pradesh, Odisha, and Meghalaya—as testing grounds. The campaign, unveiled on August 20, 2025, aims to transform India Post’s vast network into a mutual fund distribution engine, train thousands of new agents, and bring investment literacy to underserved regions.
This marks one of the most ambitious outreach efforts in the history of India’s mutual fund industry, which has already seen assets under management triple over the past five years. With over 5.6 crore folios now active nationwide, Amfi’s latest push seeks to bridge the urban-rural investment gap and unlock new growth in Tier 2 and Tier 3 towns.
Key Highlights from the Initiative
- Four states selected for pilot rollout: Bihar, Andhra Pradesh, Odisha, and Meghalaya
- One lakh postmen to be trained as mutual fund distributors under India Post
- Goal to deploy at least ten trained distributors per district by year-end
- Target of 20,000 new distributors in the first phase
- Academic partnerships planned for “train the trainers” programs
India Post as a Distribution Backbone
Amfi’s collaboration with India Post is central to the initiative. With its reach into nearly every village and town, India Post offers unmatched access to potential investors who have traditionally been excluded from formal financial markets. The plan is to equip postmen with basic investment training, enabling them to function as relationship managers who promote savings products and mutual fund schemes.
- Postmen will assist with onboarding, KYC compliance, and SIP setup
- India Post’s verticals to be restructured into profit centers
- KYC challenges for individuals without Aadhaar to be addressed through alternate verification
Training and Capacity Building
To ensure quality and consistency, Amfi is partnering with academic institutions to develop a scalable training framework. The “train the trainers” model will allow local colleges and financial education centers to certify instructors who will then train postmen and college students across the four states.
- Curriculum includes mutual fund basics, compliance, and investor engagement
- College students to be recruited as part-time distributors in semi-urban zones
- Certification programs to be rolled out in phases starting September 2025
Market Opportunity and Investor Trends
Currently, 65 percent of mutual fund investments originate from India’s top 30 cities, while the remaining 35 percent comes from smaller towns. This imbalance highlights the untapped potential in rural and semi-urban areas. Despite 30,000 new distributors entering the industry annually, net additions hover around 10,000, indicating high attrition and limited reach.
- Folio count has grown from 2.1 crore in 2019 to 5.6 crore in 2025
- AUM surged from Rs 22.3 lakh crore to Rs 65.7 lakh crore over five years
- Chhoti SIPs starting at Rs 250 and Specialized Investment Funds (SIFs) have boosted access
- Bottom 30 towns now contribute 45 percent of new investor inflows
Challenges and Strategic Goals
While the initiative is promising, execution will require overcoming logistical hurdles, digital literacy gaps, and regulatory compliance. Amfi is working closely with SEBI and India Post to streamline onboarding processes and ensure that distributors adhere to ethical sales practices.
- Digital onboarding tools to be simplified for low-connectivity regions
- Monitoring systems to track distributor performance and investor satisfaction
- Long-term goal to scale the model to all 28 states by FY27
Looking Ahead
If successful, the pilot program could redefine mutual fund distribution in India, making investment products as accessible as postal services. By leveraging existing infrastructure and local talent, Amfi hopes to create a sustainable, inclusive ecosystem that brings millions of new investors into the fold.
Sources: Economic Times, News18, Mint.
