A STUDY ON RURAL INVESTORS AWARENESS AND PATTERN OF INVESTMENT BY RURAL BANGALORE

R.Esther Vilji(M.Com)Kristu Jayanti College,

Bangalore

Introduction

The word “Awareness” refers to a consciousness of the

existence of a particular truth, event or thing.

The sense of awareness of an investor towards savings and

investment is created modified and shaped up by various

external sources.

The print and electronic media such as the dailies, weeklies,

television, radio etc., and personal contact with friends,

relatives, investment consultants etc., contribute a lot in

creating awareness among investors.

As the awareness of investors is considered to be indispensable

while studying one’s savings and investment pattern, an

attempt was made to measure the awareness level of investors.

RESEARCH DESIGNSTATEMENT OF THE PROBLEM

Rural literacy rates have increased, but financial literacy levels are very poor.

Rural people are very much familiar with saving, but still, a large section of the

rural population of our country has no access to banking and postal network. In

this context, the study intends to investigate the awareness levels and the

investment pattern of the rural investors.

OBJECTIVES OF THE STUDY

To study the investments awareness level of the rural investors.

To study the investors preference towards various types of investment avenues.

To study the investment pattern of the rural investors

RESEARCH METHODOLOGY

Scope and period of the study

The study is confined to rural investors residing in a village that is in Kannur. The study

covers the period from January to Feb 2016.

Data Sources

The present study is basically based on primary and secondary data. The primary data is

collected with the help of well-constructed questionnaire and interviews. Secondary data

tapped from books, research journals, newspapers, and study reports related to the topic.

Tools for Analysis

The data analysis tools are simple percentage, chi square, and factor analysis.

Sample size

80 sample respondents are selected on the basis of convenience sampling.

Chi-square

Hypothesis 1

H0: There is no relationship between annual investment and annual income

H1: There is a relationship between annual investment and annual income

Table value= 7.8. Since the calculated value is more than the table value null hypothesis is

rejected. Therefore there is a relation between annual income and annual investment.

ANNUAL INCOME *ANNUAL INVESTMENT ANNUAL INCOME ANNUAL INVESTMENT

Chi-Square 19.600a 36.400a

Df 3 3

Asymp. Sig. .000 .000

Monte Carlo Sig.

Sig. .000b .000b

99%Confidence

Interval

Lower Bound .000 .000

Upper Bound .001 .000

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell frequency is 20.0.

b. Based on 10000 sampled tables with starting seed 2000000.

Hypothesis 2

H0: There is no relationship between annual investment and purpose of investment

H1: There is a relationship between annual investment and purpose of investment

Table value= 7.8. Since the calculated value is more than the table value null hypothesis is

rejected. Therefore there is a relation between annual investment and purpose of investment

investment.

ANNUAL INVEATMENT*PURPOSE OF INVESTMENT ANNUAL INVESTMENT PURPOSE OF INVESTMENT

Chi-Square 36.400a 20.800a

Df 3 3

Asymp. Sig. .000 .000

Monte Carlo Sig.

Sig. .000b .000b

99%

Confidence

Interval

Lower Bound .000 .000

Upper Bound.056 .056

FACTOR ANALYSISOpinion about different investment avenues

Interpretation: The table shows investors different opinion about various avenues with reference

to rural Bangalore city. The result shows that most of the rural investors have a good opinion

about insurance. Secondly, the investors have a favorable opinion towards real estate, post office

saving, and bank deposits and finally the investors having negative opinion about mutual fund and

gold.

Component Matrixa

Component

1 2 3

SHARES .374 .533 .321

MUTUAL FUND -.695 .102 .136

BANK DEPOSITS .261 .140 -.862

POST OFFICE SAVINGS .407 .685 -.208

INSURANCE .662 -.182 .101

GOLD -.235 .716 .303

REAL ESTATE .610 -.254 .474

Extraction Method: Principal Component Analysis.

a. 3 components extracted.

FINDINGS FROM THE STUDY

The majority of the respondents fall under the age of 31-40 years and the maximum

number of respondents are male.

The majority 52% of investors are educated PUC and the majority investors are

self-employed.

Majority 43% of the respondents earn an annual income of Rs100000-200000.

From the above study it is very clear that all the 100% of the respondents are aware

of investment among them 46% of the rural people are aware about bank deposits.

From the survey it was found that 100% of the respondents invest their money in

different investment avenues among them majority 40% of rural investors are

investing in bank deposits.

53% of the investors invest monthly in different types of alternatives.

30% of investment decision is influenced by their opinion of the investment tool.

50% of the investors want their investment to grow at an average rate.

Cont…

It was founded that majority 37% of investors consider return on investment as an

important factor while investing

Majority 40% of rural investor’s investment purpose is to meet their future needs.

From the study it is very clear that none of the rural investors invest in securities.

50% of investor’s investment decision is based on future growth of the investment.

Majority of the respondents have good opinion about investing in bank deposits.

It has been found that there is a relation between education level and occupation

There is a relation between education level and annual income.

There is a relation between annual income and annual investment.

There is a relation between annual investment and purpose of investment.

SUGGESTIONS

The various investment tools which are mostly preferred by the investors are bank

deposits, insurance. So there should be various other means to create awareness

regarding the potential of other instruments and the tools which can be more

beneficial to the investors.

The investors consider various factors while making investment like return, safety

of principal etc. there should be rational thinking of that the investor should able to

know that at what point of time they need capital appreciation instead the return and

when the need return instead of maturity period.

There is a need for initiating awareness programs disseminating information about

shares, debentures, bonds and mutual fund.

Investors should have the complete knowledge of all the alternatives.

There is a need of awareness program have to be conducted about investing in

securities because none of the rural investors are aware about securities market.

CONCLUSION

The study disclosed that the majority of the rural investors given first preference to the

bank deposits and second preference for gold .The third preference were given to real

estate (land), which signals towards the traditional attitude of the rural investors. the

study conclude that majority of the rural investors are aware about investment but there

is a need for initiating awareness programs disseminating information about shares,

debentures, bonds, mutual funds and about securities market .

BIBLIOGRAPHY

Murlidhar A. Lokhande, (2015), A study of investment awareness and pattern of

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investors-on-different-products-conducted-at-asit-c-mehta-investment-

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Sarangapani,A. and Mamatha,T.2011. Investment pattern of Indian investors An

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