Comati (Chit fund)

Among middle class families, especially the residents in relatively small towns are quite commonly
used Comati system.

Description of Comati:
In simple words Comati means a “Group saving scheme”. A group of people agreed to save fixed
amount of money mostly on monthly basis, choose one person among them as trustee to deposit
agreed amount on daily basis. Trustee is responsible to collect the money from the group members
and pay accumulated amount to the members at the end of the month.
The concept of Comati is very widely known and practicing by a very sizable part of the population in
Pakistan. Comati is widely understood by 87.9 percent of the population in Pakistan. Comati rank
only as the third savings channel, far behind home saving and saving in assets. While perceptions
expressed on the service of Comati are very positive and involve trust, good service and ease of use
and last but not the least a positive social aspect. Women especially house wives are very commonly
involved and even better perception of Comati then men.
This is surprising, especially compared with previous studies of limited sample sizes that suggest the
majority of Pakistanis are involved in such group schemes. They are also only the third most popular
borrowing / saving channel, behind shopkeeper loans and family/friends.
Most users participate in only one Comati (84.1 percent). Contributions to Comati are made monthly
or 15 days. Change in income has the highest impact on changes in payments to Comati, with the
exception of Baluchistan, where family reasons have the highest impact on amounts paid to Comati.

Reasons for Participating in Comati

Few participate in Comati to purchase fixed assets (7.3 percent) or invest into business (12.1
percent), although a slightly larger share than overall formal or informal savers (10.76 percent) list
business investment as savings motive. Following are the reasons to save money:

Types of Comati
There are three types of Comati:

9. des. 2010 Created by: Waqar Zahid

 1. Lottery Comati
2. Bid Comati ( Boli wali Comati)
3. Comati fixed by time

1. Lottery Comati:
Lottery Comati means “The sharing out of money won by chance, through drawing lots”
In this type of Comati trustee write down the names of all the members on small pieces of paper
and put these in a box. One shakes the box before he asks a child or a woman to pick one piece
of paper from the box. The lucky person gets the accumulated money from the trustee.
All the Comati members suppose to be at place during this process. Usually it happens at the end
of month or every 15 days. It is also common that person winning the Comati serves sweets and
drinks etc to other Comati members.

Example:
It’s normal routine in Pakistan that a group of 10 persons for example decides to save money by
giving Rs. 1000 to trustee each month. It means that each member has to pay Rs. 1000 for 10
months. At the end of each month trustee pay accumulated amount Rs. 10,000 to winning
member. Next month the name of this winning person will be excluded from the pool box
because he has got his money, but he still has to pay every month till all the members get their
money.
Note: Trustee should be the member of Comati.
Trustee has the right to keep and use the money for whole month.
He is responsible if somebody stops paying or not paying in time.

2. Bid Comati (Boli wali Comati):

There are two subcategories of bid Comati:

i) Bid Comati (The Longer you wait, the less you pay each month)
ii) Bid Comati (Trustee gets the advantage)

i) Bid Comati (The Longer you wait, the less you pay each month)
Example:
A group of 10 people agrees to save Rs. 1000 each month. Usually trustee takes the
accumulated money (Rs. 10000) 1st month in this type of chit fund.
2nd month in a bid round members decide who is going to get the money this month.
For instance Mr. A is saying that I need money this month so just give me Rs. 9000/-
instead of Rs. 10000/-. Then trustee calculates the amount which other 9 members have to
pay this month.
Calculation:
Total amount in chit fund = Rs. 10000
Mr. A decided to take = Rs. 9000
Difference = Rs. 1000

Difference should be divided to rest of members like:

9. des. 2010 Created by: Waqar Zahid

 Difference divided = Rs. 1000 / 9 = 111
each member will pay this month = Rs. 1000 – 111 = Rs. 889 in chit fund

So in this type of Comati the longer you wait to get the money, the less you pay each month.

ii) Bid Comati (Trustee gets the advantage)

The difference between this type of Comati and Bid Comati (The Longer you wait, the less you
pay each month) is that, trustee gets the advantage of difference (difference = Rs. 1000 as I
explained earlier in calculation) instead of other members. Other difference is that the members
have to pay Rs. 1000 every month till all the members get their money back.
Calculation:
Total amount in chit fund = Rs. 10000
Mr. A decided to take = Rs. 9000
Difference goes to trustee = Rs. 1000

NB: This type of bid Comati is not very popular and not reliable now.

3. Secluded Comati or Comati fixed by time

In this type of Comati trustee always has the right to get first month accumulated amount while
all member know that in which month one will get his savings.

Example:
In this example Mr. A is the trustee. He/she gets his money first and gives a plan to other group
members that, who is going to get his/her money in which dates.
Payment plan sample:
Mr. A gets his/her savings = 1st month
Mr. B gets his/her savings = 2nd month
Mr. C gets his/her savings = 3rd month and so on…

Sources:
1. http://books.google.com/books?
id=MYtt4m3XCqoC&pg=PA4&lpg=PA4&dq=Pakistan+a2f+household+survey&source=bl&ots=
aUlne3xb9g&sig=D3Pn5FIPFLij1HgXy6FdMIknitI&hl=en&ei=ufP_TL3oBoifOpGRwaUM&sa=X&
oi=book_result&ct=result&resnum=1&sqi=2&ved=0CBYQ6AEwAA#v=onepage&q=Comati&f=
false
2. Bringing finance to Pakistan's poor: access to finance for small enterprises.

9. des. 2010 Created by: Waqar Zahid