A chit fund begins with the formation of a group of individuals who agree to contribute a fixed amount regularly, such as monthly.
Each member's contribution is collected and pooled together to form the total chit amount.
A buyer identifies a need for goods or services and invites multiple sellers to participate in the auction.
The buyer provides detailed specifications of the products or services required, including quality standards, delivery timelines, and other pertinent details.
Keeping track of daily transactions such as sales, purchases, payments, and receipts.
Ensuring that bank statements and financial records match, identifying and resolving discrepancies.
Regulatory bodies are continually updating rules to ensure the safety and reliability of chit fund operations. These changes aim to protect investors and ensure fair practices.
The expanding middle class with higher disposable incomes is likely to invest in chit funds for savings and emergency credit needs.
