The document summarizes a study on the saving and investment patterns of people in small towns in India. Researchers surveyed over 3,800 people across 24 small towns to understand their demographics, what drives their investments, sources of information, and awareness and use of different financial investment options. The study targeted emerging and nascent cities across four regions of India. Most respondents were male, between 21-45 years old, married, and lived in a nuclear family setting. The research aimed to provide insight into how consumers in small towns save and invest their money.

1. A STUDY ON
SAVING & INVESTMENT PATTERN OF
PEOPLE IN INDIA
A Presentation By: Market Xcel Data Matrix Pvt Ltd
16, Sant Nagar, Delhi-110065
1

2. 2
Research Background…
 The Indian consumer is changing and evolving. And, so are his consumption and investment patterns. As
Indian buyers loosen their purse-strings and are less reluctant to investing in unconventional investment
options, the entire investment story is getting redefined
 The familiarity and usage of investment options in metros and high growth towns is high. People are
increasingly investing and multiplying money through various investment options. We at Market Xcel
targeted small towns to see how the current and potential investors think and act there
 We covered 24 towns in total. The characteristics that make these cities lucrative for our study are:
 Rising per capita income among the masses
 High degree of quest for status and economic advancement
 Includes major tourism destinations thereby uplifting the economy
 Strategic location to set up manufacturing units – exemplified by Government initiatives
 Highly price sensitive markets although have a good amount of propensity to spend
 Not an early adopter of new things but have high desire of owning established brands, high potential
as the expansion activities, specific industry set ups etc. are taking place in these cities, having a
multiplier effect on growth and revenue flow

3. Research Objective & Process…
The key research objective can be defined as :
To understand the saving and investment pattern of small town consumers. Key Information Areas being:
• Demographics- Personal and household incomes, residing pattern
A
• What drives investors to use different investment options available and what could be
the motivators- reasons for saving money/making long term investments
B
• Sources of information/key Influencers
C
• Financial investment options aware of, ever instead in, future potential
D
3

4. Sample Design… 4
• To achieve the study objectives we specifically targeted Emerging and nascent cities across four geographical
zones of India. 6 cities in each zone was covered in the survey.
Targeted Achieved
Amritsar 160 160
Jalandhar 160 163
Agra 160 162
NORTH
Varanasi 160 162
Panipat 160 163
Srinagar 160 161
Asansol 160 160
Bhubneshwar 160 160
Guwahati 160 160
EAST
Jamshedpur 160 161
Patna 160 161
Ranchi 160 169
Indore 160 160
Nasik 160 163
Goa 160 162
WEST
Rajkot 160 162
Aurangabad 160 163
Bhopal 160 163
Mangalore 160 160
Coimbatore 160 164
Thiruvananthapuram 160 160
SOUTH
Madurai 160 160
Mysore 160 160
Vizag 160 160
Total 3840 3879
Definition:
Emerging cities: - These cities are characterized by factors like growing income, rising aspirations, scarcity of branded stores and growing corporate
activities.
Nascent cities: - These cities reflect low per capita incomes and limited corporate activity. The consumers of these cities are more price conscious and
have a very low propensity to experiment new brands.

5. Demographic
Profiling…
5

6. 6
Profiling…
N=3879
12% 10%
32%
Gender SEC 27%
88% 31%
Male Female SEC A1 SEC A2 SEC B1 SEC B2
21yrs - 34yrs 35yrs - 45yrs 46yrs - 55 yrs Never Married Married
14%
29%
Marital
Age
30% 56% Status
71%
• No specific quota was followed in terms of age, SEC, Gender and Marital status. Higher participation of male audience was a natural outcome.
• More than 50% of the audience belong to 21 – 34 years

7. 7
Profiling Cont…
N=3879 Staying
Family
Structure 1% 1% 2% Pattern
9%
40% 45%
A significantly high
number of
respondents stay with
14% the family
88%
Staying alone/ with friends at a different location
Nuclear Family Nuclear family with elders Staying with entire family
Joint family Single person/ sibling/ other Staying with some members of family
Staying alone/ no shared accomodation
Family
Members 50% The number of family
members is 4 or more
in maximum of our
32% cases
15%
3%
1-2 3 4 5 or more
• To achieve the study objective it was imperative to understand the residing pattern of the people as the lifestyle directly impacts expenses, saving and
investment pattern
• The living pattern implies the commitments related to family. Hence, the respondent would first meet family‟s expenses, then save and invest.

8. 8
Profiling Cont… - CWE
Occupation Education
N=3879
2%
Shopowner 33% 6%
Clerical / Salesman 17%
Businessman/Industrialist
with no employees 11%
26%
Supervisory Level 10%
56%
Officer/Executive - Junior 9%
Businessman/Industrialist
with 1-9 employees 6% 10%
Officer/Executive - Middle
/ Senior 5%
Self-Employed School 5-9 years
Professional 4%
SSC / HSC
Skilled worker 3%
Some college but not Graduate (Incl. Diploma)
Petty trader 3%
Graduate / Post graduate
Businessman/Industrialist
with 10+ employees 1% Graduate / Post graduate - Professional
• Chief wage earner‟s occupation and education were measured primarily to confirm the Socio Economic Class

9. 9
Profiling Cont…- Respondent
N=3879
Occupation
31%
20%
13% 12%
8% 9%
6%
1%
Business in a private Indian company
Salaried Student Government job Housewife Self -employed (e.g.Salaried in a private foreign compa
Trader Lawyer, doctor, consultant)
• We achieved a fair representation of different occupational profiles. 31% of our respondents were businessmen, 20% were private employees, 12%
were into government job and so on

10. 10
Profiling Cont… - Income
N=3879
32%
28%
25%
22%
19%
17%
15% 16%
8% 8%
3% 4% 2%
1%
Upto Rs 10000 Rs 10001-Rs Rs 15001 Rs Rs 20001 - Rs Rs 25001 - Rs Rs 30001+ Refused
15000 20000 25000 30000
Household Self
• The incomes were in line with city profile. We did not happen to meet people that belong to high income group

11. 11
Concept
Testing
Savings And Investments

12. 12
Investment Options…
Q1. What is the common tenure you make investments for?
60%
54% 56% 56%
44%
38%
25% 25% 25%
21% 19% 21% 19%
18% 18%
Overall North East West South
(n=3879) (n=971) (n=971) (n=973) (n=964)
Long Term investment purpose Short Term investment purpose Both long and short term investment purpose (blend of investment plans)
• 54% of the audience have cited to have made investment in long term options
• East has got the highest percent of audience (60%) – who have cited to have made investment in long term options
• People from North show a slightly different investment pattern. More number of people invest in short term investment options than any other center

13. 13
Reasons for saving money… Unaided Aided
Base: Those who invest in Long term options
OR both Long and Short Term options
Q2. Please tell what are your reasons for saving money?
Q3. I will now read out to you some of the reasons that people like you have mentioned as the reasons for saving money. Which of these is applicable to you?
Parameters Overall North East West South
Base 2890 602 787 788 713
To arrange for inflation 28% 54% 13% 24% 19%
in the future 52% 36% 74% 38% 59%
To maintain the 33% 51%
24% 42% 16%
standard of living even 37% 34%
68% 9% 37%
when at old age
To make provisions for 58% 47% 85% 51% 48%
my future 34% 52% 12% 18% 54%
12% 12% 14% 10% 12%
Tax Savings
51% 67% 49% 42% 47%
Insurance 22% 32% 24% 12% 19%
56% 59% 63% 47% 56%
Investment (for growth 15% 33%
26% 21% 34%
of money) 74% 59%
67% 74% 61%
Good rate of return
32% 17% 30% 49% 32%
(high rate of return)
62% 79% 61% 51% 56%
Safety of my money
(Principal amount is 25% 16% 21% 44% 18%
safe) 63% 74% 62% 56% 61%
Stability of the returns 2% 14%
(Regular return on 11% 7% 21%
56% 44%
investment) 53% 56% 55%
• Investments has emerged as the largest reason at Aided level (67%). However, at an overall level it is “Making provisions for future” is the most
common reason. A major chunk of Northern people make savings to save tax.
• The graph reflects that savings are led by a number factors- inflations, safety, growth, insurance, tax saving, control future etc.
Sum of percentages may exceed 100 on account of multiple responses

14. Reasons for Long Term Investments… 14
Base: Those who invest in Long term options
OR both Long and Short Term options
Unaided Aided
Q4. What are your reasons for investing in long term investment options? UNAIDED.
Q5. I will now read out to you some of the reasons that people like you have mentioned as the reasons for making long term investments. Which of these is applicable to
you?
Parameters Overall North East West South
Base 2890 602 787 788 713
To arrange for inflation 58% 58% 54% 58% 61%
in the future 28% 37% 34% 24% 18%
To maintain the 38% 42%
37% 42% 31%
standard of living even 32% 35%
36% 29% 26%
when at old age
To make provisions for 53% 47% 61% 51% 54%
my future 43% 51% 49% 38% 34%
44% 43% 38% 54% 42%
Tax Savings
54% 56% 51% 56% 52%
Insurance 18% 30% 13% 12% 17%
20% 24% 18% 17% 19%
For growth of money 58% 74% 57% 50% 52%
19% 16% 14% 22% 23%
Good rate of return
16% 19% 14% 18% 12%
(high rate of return)
59% 78% 56% 42% 58%
Safety of my money
(Principal amount is 16% 17% 11% 18% 19%
safe) 61% 72% 65% 48% 58%
Stability of the returns 3% 5%
(Regular return on 3% 3% 2%
59% 61%
investment) 55% 42% 57%
• We asked the same question for long term investments to find out the relationship between savings and long term investments. The reasons for
making long terms investment and savings are on similar lines. “Growth of money “and “ To fight inflations” are the most prevalent reasons for making
long term investments. At an aided level “Provisions for future has emerged as the largest reason for making long term investments

15. Reasons for Making Investments – Top 3 15
Q6. Please rank the top 3 reasons which are the most important ones for you.
n = 2890
* BASE is of all those respondents who have stated these options at Unaided or Aided level
Parameters
BASE* Rank – 1 Rank – 2 Rank – 3
(Figures in %)
To arrange for inflation in the future 2502 23% 6% 10%
To maintain my standard of living even when I am not working in
2022 20% 21% 16%
the old age
To make provisions for my future 2800 45% 18% 13%
Tax Savings 3142 12% 16% 9%
Insurance 1091 12% 21% 16%
Investment (for growth of money) 2240 12% 23% 23%
Good rate of return (high rate of return) 2160 8% 19% 24%
Safety of my money (Principal amount is safe) 2240 10% 16% 24%
Stability of the returns (Regular return on investment) 1687 3% 5% 16%
• “To make provisions for my future” (45%) is stated as the key reason for investment followed by “To arrange for inflation in the future” (23%)

16. Influencers for final Investment options… 16
Q7. For making decision about investing money in various investment options, who are the people/ sources around you which you consult in order to seek more
information before taking the final investment decision?
Key Influencers
Overall 80% 27% 3% 2% 30% 22% 3%1% 27%
North 93% 17% 5% 2% 48% 31% 2% 1% 32%
East 63% 47% 1% 28% 8% 4% 24%
West 86% 21% 4%3% 18% 25% 3% 1% 27%
South 78% 23% 1%1% 26% 23% 2% 23%
Use own knowledge Spouse Parents
Children Relatives Friends
Investment / Insurance Advisors Financial consultant Expert views
• 80% of the audience use their own knowledge for decision making on financial investments. Spouse‟s opinion has a huge role in decision making
• North has shown a higher percentage with 93% of the audience use their own knowledge. Expert opinion also matters a lot

17. Intention to continue with long term investments… 17
Q8. You have mentioned that you invest in long term financial investment options. Will you continue investing in the long term investment options in future?
Future Intention
Yes
100%
99%
97%
96%
89%
Overall North East West South
(n=2890) (n=602) (n=787) (n=788) (n=713)
• Almost everyone would continue investing in long term investment options

18. Awareness for Financial Investment options – Aided 18
Q9. What are the financial investment options you are aware of?
Financial Investment
Overall North East West South
Options
BASE 2774 602 700 780 692
57% 65% 54% 52%
PPF (Bank or Post Office) 56%
79% 69% 91% 68%
Indira Vikas Patra 87%
National Saving Certificate 85% 88% 78% 78%
96%
Post Office Monthly Income 48%
52% 56% 58% 46%
Scheme
Bank Fixed deposit 100% 100% 99% 100% 100%
Company Fixed Deposits 32% 44% 38% 19% 27%
Fixed Deposit (Post Office) 82% 70% 86% 81% 91%
Mutual Fund 89% 85% 88% 89% 93%
Unit Linked Insurance Plan (for 29%
investment and insurance) 39% 44% 48% 34%
Traditional Life Insurance 89% 86% 89% 90% 89%
Policy (for guaranteed returns )
17% 13% 22% 16% 18%
Infrastructure Bonds
Stocks and shares 61% 63% 54% 61% 65%
Gold ETF 29% 22% 18% 53% 21%
Exchange Traded Funds
5% 10% 8% 2%
(ETFs)
• Bank fixed deposits, National saving certificates, life insurance plans, mutual funds and post office deposits are popular modes of investments
• People are quite aware of long term investment options available
* BASE is of all those respondents who have shown their intention to invest in long term options in future

19. 19
Financial Investment Options-Ever Invested
Q10. Which of these have you ever invested in
Financial Investment
Overall North East West South
Options
BASE 2774 602 700 780 692
27% 40% 22% 24% 21%
PPF (Bank or Post Office)
8% 20% 5% 5% 2%
Indira Vikas Patra
National Saving Certificate 25% 24% 27% 28% 22%
Post Office Monthly Income 19%
18% 18% 21% 12%
Scheme
Bank Fixed deposit 93% 98% 89% 91% 95%
Company Fixed Deposits 4% 5% 6% 3% 1%
Fixed Deposit (Post Office) 29% 32% 25% 24% 34%
Mutual Fund 26% 25% 23% 27% 30%
Unit Linked Insurance Plan (for 17%
investment and insurance) 13% 16% 8% 12%
Traditional Life Insurance 44%
49% 54% 42% 55%
Policy (for guaranteed return )
13% 12% 16%
Infrastructure Bonds 12% 13%
Stocks and shares 26% 34% 25%
22% 24%
Gold ETF 2% 2% 5% 1%
Exchange Traded Funds
(ETFs) 1%
• Bank fixed deposits are the most prevalent option among target audience. 93% have stocked money in Fixed deposits at some point of time
• Close to half of interacted audience have invested in life insurance policy as well. This indicates safety and secure future derive investment decisions
* BASE is of all those respondents who have shown their intention to invest in long term options in future

20. Financial Investment Options – Invested in Last 1 Year 20
Q11. In which of the following options have you invested in the last one year?
Financial Investment
Overall North East West South
Options
BASE 2774 602 700 780 692
PPF (Bank or Post Office) 14% 22% 12% 11% 10%
Indira Vikas Patra
National Saving Certificate 8% 10% 9% 8% 5%
Post Office Monthly Income 8% 9% 4%
9% 10%
Scheme
Bank Fixed deposit 33% 23% 29% 34% 45%
Company Fixed Deposits 1% 1% 2% 1%
Fixed Deposit (Post Office) 9% 17% 7% 9% 4%
Mutual Fund 15% 17% 16% 12% 14%
ULIP
4% 6% 4% 2% 4%
Traditional Life Insurance
Policy (for guaranteed return ) 24% 23% 22% 16% 34%
Infrastructure Bonds 4% 4% 3%
6% 4%
Stocks and shares 11% 12% 11% 10% 11%
Gold ETF 2%
2% 4% 1%
Exchange Traded Funds
(ETFs)
• The investment pattern has remained similar for last year too. Stocks and shares and mutual funds have generated more interest as a good number of people have
invested in these instruments during last one year
* BASE is of all those respondents who have shown their intention to invest in long term options in future

21. Financial Investment Options – Proportion of Investment 21
Q12. What proportion of the total investment that you made in the last 1 year goes to the various investment options?
Financial Investment
Overall North East West South
Options
BASE 2774 602 700 780 692
15% 10% 19% 21% 10%
PPF (Bank or Post Office)
Indira Vikas Patra
National Saving Certificate 14% 19% 9% 8% 19%
Post Office Monthly Income 6% 10% 3% 1%
Scheme
11%
Bank Fixed deposit 28% 50% 17% 24% 19%
Company Fixed Deposits
Fixed Deposit (Post Office) 18% 18% 10% 26% 16%
Mutual Fund 4% 7% 5% 4% 1%
ULIP 4%
3% 4% 3% 1%
Traditional Life Insurance
7% 5% 9% 3%
Policy (for guaranteed return ) 10%
Infrastructure Bonds 13% 19% 18% 8% 5%
Stocks and shares 9% 8% 10% 7% 10%
Gold ETF 1% 2% 1%
Exchange Traded Funds
(ETFs)
• People seem to have tendency to put the surplus money in fixed deposits
• A significant amount was also invested in PPF, NSC, infrastructure bonds and stocks
* BASE is of all those respondents who have shown their intention to invest in long term options in future

22. Financial Investment Options – Future Intentions 22
Q13. Which of these do you plan to invest in the current financial year?
Financial Investment
Overall North East West South
Options
BASE 2774 602 700 780 692
17% 32% 12% 15% 10%
PPF (Bank or Post Office)
Indira Vikas Patra
National Saving Certificate 4% 4% 3% 2% 5%
Post Office Monthly Income 6% 8% 4% 5%
Scheme
6%
Bank Fixed deposit 84% 80% 78% 88% 89%
Company Fixed Deposits 1% 1% 2%
Fixed Deposit (Post Office) 10% 8% 9% 11% 12%
Mutual Fund 45% 45% 34% 56% 45%
ULIP 6%
6% 10% 4% 5%
Traditional Life Insurance
48% 56% 38% 43%
Policy (for guaranteed return ) 55%
Infrastructure Bonds 37% 45% 44% 21% 38%
Stocks and shares 64% 55% 67% 55% 78%
Gold ETF 5% 4% 6%
9% 1%
Exchange Traded Funds 5% 6% 4%
(ETFs) 6%
• The new modes of investments- Stocks and shares, Infrastructure bonds, mutual funds seem to be attracting a lot of attention. A major proportion of respondents
indicated their intentions to invest in the specified modes in near future
• Bank fixed deposits are still most desired
• Rest of the options are losing sheen
* BASE is of all those respondents who have shown their intention to invest in long term options in future

23. Amount invested in last 1 year… 23
Q14. How much money have you invested in the last one year (in Rupees)?
Upto Rs 25,000 Rs 25,001 – Rs 50,000 Rs 50,001 – Rs 75,000 Rs 75,001 – Rs 1,00,000 More than 1,00,000
Overall (n=2774) 33% 33% 13% 5% 17%
North (n=602) 9% 37% 17% 37%
East (n=700) 71% 5% 11% 10% 3%
West (n=780) 34% 44% 7% 15%
South (n=692) 19% 45% 17% 8% 11%
• Though, people have strong desire to try out different investment options, the current level of investment is little small. People like to make small
investments particularly in East
• People from North have invested comparatively higher amount in long term investment options
* BASE is of all those respondents who have shown their intention to invest in long term options in future

24. Way Forward
24

25. 25
Summary
• Amid the worsening economic scenario during 2011-2012, Indian investors from smaller cities showed confidence in
investing. Small town investors understand the significance of making investments as much as large town dwellers. The
definition of savings and investments seems identical and led by factors that revolve around:
– Secure future
– Way to fight inflation
– Safety of money
– High rate of return and
– Insurance
– Maintaining a particular level of lifestyle is not among the drivers
• According to Association of Mutual Funds in India (Amfi), between September 2011 and March 2012, proportion of assets
contributed by Tier-I, II & III cities and smaller towns in assets under management (AUM) of the Indian mutual fund industry
increased 3.63 per cent to 28.88 per cent. In absolute terms, these regions contributed Rs 7,500 crore more to the industry's
AUM.
• On BSE, the share of investors from cities such as Rajkot, Ahmedabad, Bangalore, Indore, Jaipur, Patna and Ludhiana has
grown more than three-fold, although on a smaller base
• Churn in investment from small towns is lower and they invest for a longer term. In bigger cities there are more
distributors, independent financial advisors and banks, which eventually lead to lot of churning. However, in small towns
people rely less on other‟s advise.
• Life is stable and family is key to investment decision. The amount spent is generally the surplus out of meeting family
expenses and commitments

26. 26
…Summary…
• Deposits at banks and post offices have been major investment avenues so far and continue to remain so in near future
• However, non-conventional modes are picking up fast. 64% of survey participants said they intend to invest in stocks and
shares, 37% would like to invest in infrastructure bonds. This indicates a huge scope for financial companies and
advisors
• Compared to large towns the respondents look confident. They take their own investment decisions. Multiple sources of
information are generally not referred to. However, the experts opinions are given due importance. Though, the tendency to
consult financial investors is low, the expert opinions are sought through television, newspapers etc.
• The major investment portfolio is undertaken by larger audience include Traditional Life Insurance & Bank Fixed Deposits
• The idea is to increase the awareness level and promote the gamut of offerings
• Key motivators to invest would be the credibility of the brand and the confidence in assured return on investment with safety
of money
• Low awareness hence low off take thus need to take up promotional activities to increase visibility
• The platform is missing hence we advocate disseminating clear information and benefits…market competitiveness in no
way discourages players from entering as the segment is seen to be offering huge potential in future
• People from small towns are more than willing to invest if one makes products available to them with good advice. The

27. 27
…Summary
• People from small towns are more than willing to invest if one makes products available to them with good advice. The fact
is reiterated from the fact that:
– Top five brokers in the country have over 50% of their Clients outside the six metros
– Nearly 51% of all IPO applications now come from outside the big cities
– About 40% of the equity-based mutual fund applications are from the non-metros
– Active demat accounts are being operated in 73% of all pin code areas
– Purulia and Hamirpur have more demat accounts than Gurgaon
• The risk-averse middle class is slowing shifting from fixed income avenues such as fixed deposits and small saving
instruments as fallen returns are looking too low to take care of retirement needs. The same growth can be fuelled if the
investors are reached through proper medium and due guidance is provided

28. 28
What Do Financial Institutions Need To Have ?
• It is evident that audience look for ….
– A „popular‟,..‟around‟…. product in which they can trust
– Reliable products with consistent returns
• A trustworthy…Reliable name
• The task is to:
• Build Awareness- Should make general public aware of the various products via different communication media with
higher listenership/viewership
• Provide Rational Offering + Emotional Connect
• Rational : Secure and offering consistent returns
– Move the focus towards small investors
• Based on the insight that today‟s consumer are opting for Mutual Fund, Stocks & Shares - hence does
require strong reassurance here
– Decode “The product offerings to make it a real smart choice for the small town investors”
• “Product uniqueness” and “Brand Assurance” makes it easier for the channel to „sell‟ it to the end
consumer
– This could also effectively use „Security of investment‟ & “Credibility of institution”

29. Thank You
29