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Chit Funds

Chit Funds

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Published by mkpatidar

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Categories:Types, Brochures
Published by: mkpatidar on Dec 15, 2010
Copyright:Attribution Non-commercial

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05/12/2014

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C
HIT FUNDS
MAHENDRA K PATIDAR PGDMBIFInstitute of Public Enterprise, Hyderabad
 
H
ISTORY
Chit is a 3-millennia old financial instrument, intimatelyconnected with India¶s rural and urban economic life for centuries
It is a dual-purpose instrument of both borrowing andsaving
Each Chit Group is a Self-Help Group
Chit funds are the nearest thing to a Bank in many parts of India. They mobilize huge amounts of small savings andoffer the same as some sort of microfinance
 
INTRODUCTION
A
ccording to Chit Fund
A
ct, 1982, "Chit" means a transaction bywhich the foreman (promoter) enters into an agreement with anumber of subscribers that everyone of them shall subscribe acertain sum for a certain period and each subscriber in his turn asdetermined by lot or by auction, shall be entitled to a prizedamount
A
conventional chit is a financial institution involving periodicalsubscription by a group of people
Chit funds provide an opportunity for members to save their excess cash on a daily or monthly basis and, at the same time, tohave access to easy finance in case of emergency or other requirement
They are a means of easy and profitable access to finance for theSmall and Medium Enterprises (SMEs)

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