What is chit fund in simple words?

A chit fund is a rotating saving scheme that has been a part of India’s financial system for more than a century now. It is also known as chit, chitty or kuree. Chit fund is an excellent financial instrument for both – saving and borrowing.

How do you use chit?

Chit sentence example When I was a chit of an officer no one would have dared to mock me so… and now! Most of the chit chat is superficial and adds little to this game. He tried to make chit chat during the ride, but she wouldn’t say a word.

Why is it called a chit?

chit (n. 1) “small child,” 1620s, originally “young of an animal” (late 14c.), of uncertain origin; perhaps a playful deformation of kitten, but The Middle English Compendium compares Old High German kizzin “kid” and Century Dictionary mentions Old English cið “a shoot, sprout, sprig.”

How do chit funds work?

In a chit fund scheme, a group of people contribute from time to time the value of a chit for a period equal to the number of investors (members or subscribers). The collected amount is given to the person, who is randomly selected (lottery system) or auction. In an auction program, the lowest bidder (agree to claim the lowest price) earns money.

Who is the foreman of a chit fund?

The person who run the chit fund scheme is known as foreman, around whom other members of the group are depended and confident. The chit fund is regulated under different acts in India like the Central Act called Chit Fund Act, 1982.

What is a chit funs?

Chit is a mutually beneficial scheme where in a group of people contributes monthly money towards the chit value and one member from the group is given the prize amount and the dividends are shared with all other members. 2. Who can become the member of a Chit Funs?

What is a chit scheme?

Each chit admits a particular number of members, equal to the duration of the scheme 3. Prize Chits- It is also known as the lottery chit. The foreman enrols more members than the number of instalments at a regular interval, and through a draw of lots, the member whose name appeared is eligible for the chit amount.