Investing in mutual funds could soon become much easier for people living in villages and small towns.
The National Commodity and Derivatives Exchange (NCDEX) has launched NCDEX Nidhi, a new mutual fund transaction platform designed to increase investment opportunities in rural and semi-urban India.
The platform aims to make mutual fund transactions simpler for distributors while helping first-time investors access financial products more easily.
What Is NCDEX Nidhi?
NCDEX Nidhi is built on an API-first platform, allowing distributors to either use the NCDEX Nidhi portal directly or integrate its services into their own systems.
The platform offers several features to make investing easier and more transparent, including:
Accurate transaction timestamping to avoid confusion over applicable NAV.
Universal SIP AutoPay support across major UPI apps.
Clear reasons for failed transactions during onboarding.
Support for both lump sum investments and investments in existing or new folios.
Flexible SIP options for people with irregular monthly incomes.
End-to-end support for mutual fund transactions.
These features are expected to make the investment process smoother for both distributors and investors.
NCDEX to Use FPO Network to Reach Villages
NCDEX Managing Director and CEO Arun Raste said the platform will help expand mutual fund investments in smaller towns and villages by working with leading asset management companies (AMCs) and Farmer Producer Organizations (FPOs).
The exchange already has a network of around 800 FPOs, with each organization having an average of about 250 members.
According to Raste, rural investors are already familiar with NCDEX, and this trust, combined with the reputation of major fund houses, can encourage more people to invest in mutual funds instead of relying only on traditional savings options like gold and fixed deposits.
FPOs to Become Mutual Fund Distributors
NCDEX is also helping FPOs obtain the required certification to become mutual fund distributors.
FPOs will have two options:
Distribute mutual funds only to their own members.
Sell mutual funds to the general public.
The exchange will assist organizations in obtaining the appropriate licence based on their requirements.
This initiative is expected to create a new source of income for FPOs while expanding the reach of mutual fund companies into underserved areas.
More Fund Houses and New Products Planned
NCDEX has already partnered with five leading asset management companies and plans to add 15 more fund houses over the next one to two months.
The exchange also plans to collaborate with cooperative organizations to further strengthen its distribution network.
Apart from NCDEX Nidhi, the exchange is preparing to launch several new financial products, including weather-based derivatives linked to rainfall and heat, as well as derivative contracts for platinum and freight.
NCDEX is also exploring partnerships to enter the securities markets of Sri Lanka and Bangladesh, expanding its presence beyond India.
