Chit History

The concept of chit funds originated more than 1000 years ago. Initially it was in the form of an informal association of traders and households within communities, wherein the members contributed some money in return for an accumulated sum at the end of the tenure. Participation in chit funds were mainly for the purpose of purchasing some property or, in other words, for consumption purposes. However, in recent times. There has been tremendous alteration in the constitution and functioning of chit funds.

With the advent of the Chit Funds Act, initially in the year 1961 (Madras Act) and amended subsequently in the year 1982 (Central Act), chit funds have been highly regulated and governed by stringent rules.

Chit funds are also, more importantly, a means of easy and profitable access to finance for the Small and Medium Enterprises (SMEs). Approximately Rs.35 Lakhs crores is in circulation in chit system. Nearly 15000 chit firms are in existence in India.

Chanakya_artistic_depiction

The limited access to funds of SMEs from banks and the formal financial domain had begun to strangle the growth prospects of these enterprises. Thus, the advent of chit funds is really a boon to these businesses.

  • Innovative access to finance
  • A good way of investment / finance
  • Chit funds are people friendly
  • Simple formalities

In view of lot of flexibility of this financial product the chit industry gas grown by leaps and bound, in the recent past.
Chit funds are more remunerative of the members who invest in it, as it is “People friendly”.

Online Application