Nilesh Shah, the managing director and CEO of Kotak Mahindra AMC, predicts that credit provided by the mutual fund industry will eventually surpass bank credit. He believes that the capital markets are becoming a significant source of credit, employing as many people as the banking sector, including both direct and indirect jobs. Shah emphasized the need for Indians to adopt wiser investment strategies, stating that the country’s poverty is not due to low earnings, but rather poor investment decisions.
Shah criticized the tendency of Indians to keep cash at home or invest in unproductive assets, such as banned real money gaming or cryptocurrency, which can result in significant losses. He also expressed disappointment that even mutual fund industry employees had invested in a recent ponzi scheme that went bust. Instead, Shah urged people to invest in more stable and secure options, such as mutual funds, to generate returns.
Radhika Gupta, managing director and CEO of Edelweiss Mutual Fund, echoed Shah’s sentiments, calling for incentives to encourage young people to start investing in their early 20s. She proposed a lock-in period of five to ten years to ensure that individuals stay invested and create wealth over time. This approach would help Indians develop a long-term investment mindset and avoid get-rich-quick schemes.
The comments from Shah and Gupta highlight the need for a shift in India’s investment culture. With the mutual fund industry growing rapidly, it is essential for individuals to make informed investment decisions and avoid risky or unproductive assets. By adopting a more disciplined and long-term approach to investing, Indians can generate wealth and contribute to the country’s economic growth. As the capital markets continue to evolve, it is likely that they will play an increasingly important role in providing credit and driving economic development in India.