What Pakistan Can Learn from the Rapid Growth of India's Mutual Fund Industry

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The Indian mutual fund industry has experienced extraordinary growth over the past two decades—growth that far outpaces the mutual fund industry in Pakistan.

As of the latest data, the Indian mutual fund market is valued at over ₹60.7 trillion (INR), whereas the Pakistani mutual fund industry stands at approximately PKR 353 billion (~₹35 crore when converted). The difference is not just in size, but also in public participation, regulatory support, and awareness.

Why Is India's Mutual Fund Industry So Much Bigger?

There are two key advantages that give India’s mutual fund ecosystem a significant edge over Pakistan’s:

1. Stronger Saving Culture Among the Public
   Indian investors show a higher tendency to save and seek better returns compared to Pakistani investors, who largely rely on traditional savings methods like fixed deposits or gold.

2. Government Support & Proactive Regulation
   India’s policies have consistently encouraged long-term savings through mutual funds. Tax incentives, public campaigns like Mutual Funds Sahi Hai, and regulatory support from SEBI (Securities and Exchange Board of India) have fostered a healthy environment for mutual fund investments.

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The Urgent Need for Mutual Fund Awareness in Pakistan

What India initiated years ago, Pakistan must act on today—and that is creating widespread awareness about the benefits of investing in mutual funds.

There is an urgent need to:

• Promote the concept of long-term wealth creation through mutual funds

• Encourage a culture of saving and investing, especially among the youth

• Educate the public that returns from mutual funds can outperform traditional bank deposits

Mutual funds are one of the most accessible, regulated, and diversified investment options available in the market. Yet, public knowledge about these benefits in Pakistan remains limited.

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Asset Management Companies: India vs. Pakistan

India currently has over 43 Asset Management Companies (AMCs), including subsidiaries of multinational banks and public sector institutions. These institutions are trusted, visible, and have a wide network to distribute their mutual fund products.

In contrast, Pakistan has only 22 AMCs, mostly privately owned. The lack of participation from state-owned banks in launching their own mutual funds is a missed opportunity. Public-sector banks in Pakistan enjoy higher trust and deeper outreach, especially in semi-urban and rural areas. Their involvement could dramatically increase investor confidence.

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Role of MUFAP and Marketing Strategy Overhaul

Organizations like MUFAP (Mutual Funds Association of Pakistan) can play a pivotal role by:

• Launching mass awareness campaigns

• Partnering with government and educational institutions

• Promoting financial literacy around investment options, particularly mutual funds

Additionally, asset management companies need to revisit their marketing and distribution strategies. Relying solely on the reputation of their parent companies or one standout product (like an Islamic fund) is no longer enough. The focus must shift to educating the investor, simplifying the investment process, and reaching untapped markets through digital and traditional channels.

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The Path Forward: Tapping into Pakistan's Untapped Potential

There is enormous untapped potential in the Pakistani mutual fund space. While progress is being made, we must accelerate our efforts.

• Regulators, fund houses, and banks need to collaborate

• Public trust must be earned through transparency and education

• Government-backed campaigns can help normalize mutual fund investing

By learning from India’s successful playbook, Pakistan can build a strong, inclusive, and sustainable mutual fund industry that empowers people to take control of their financial futures.