SDG 4: Quality Education | SDG 8: Decent Work and Economic Growth
Securities and Exchange Board of India (SEBI) | Ministry of Finance
The SEBI Investor Survey 2025, covering over 90,000 households, reveals a significant “conversion gap” in India’s financial landscape: while 63% of households are aware of securities market products, only 9.5% (approx. 3.21 crore households) actively participate. The data underscores a deep-rooted risk-averse culture, with 80% of households prioritizing capital preservation over growth. Regional disparities remain stark, as urban penetration (15%) more than doubles rural engagement (6%), though a promising 22% of non-investors—largely from affluent rural segments and Gen Z—express a clear intent to enter the market within the next year.
Critical Barriers and Information Dynamics
Primary Roadblocks: Non-investors cite product complexity and information gaps (74%), risk/return concerns (73%), and trust issues (51%) as the top deterrents to entry.
Trust in Finfluencers: Investors increasingly rely on digital peer groups and Financial Influencers, with 62% making decisions based on their recommendations.
Regulatory Awareness: Public recognition of SEBI as a regulator stands at 21%, significantly trailing the RBI at 73%. However, awareness of SEBI strongly correlates with higher confidence in market accessibility and wealth creation.
The Disengagement Puzzle: Approximately 40% of investors are dormant, primarily due to poor performance (87%) and external influences like negative peer experiences (75%).
Investor Education (IEP): Participation in formal programs is critically low at under 1%, yet 91% of attendees find them highly useful, signaling a massive opportunity for scalable, digital-first outreach.
What is the ‘Awareness-Incidence Gap’ and why is it central to India’s financialization? The awareness-incidence gap refers to the disparity between the number of households that know about financial products and those that actually invest in them. In India, this gap is most pronounced in specialized products like Futures & Options or REITs, where awareness is near 10-13% but participation is below 1%. Bridging this gap is essential for financialization because it ensures that household savings are channeled into productive capital markets rather than remaining locked in traditional, low-yield assets like physical gold or idle bank deposits, thereby fueling broader macroeconomic growth.
Policy Relevance
The survey serves as a data-backed compass for SEBI to transition from broad-based awareness to targeted, behavioral interventions.
Vernacular-First Education: With 94% of respondents preferring Hindi or regional languages over English, policy must pivot toward localized, short-form video content to drive literacy.
Formalizing ‘Finfluencers’: The high trust in digital influencers necessitates a robust regulatory framework for registered investment advisors to prevent mis-selling and fraud.
Simplifying Onboarding: Addressing the 73% demand for easier processes through continued DPI upgrades like Video KYC will be key to converting “intenders” into active participants.
Strengthening GRMs: Increasing awareness of SCORES 2.0 and the SMART ODR Portal is critical to building the institutional trust required for long-term commitment to volatile markets.
Follow the full update here: SEBI Investor Survey 2025