Query on chit fund

Others 467 views 5 replies

Hello everyone...

Can some please explain me the meaning of chit fund company?

Thanks in advance..:-) :-) 

Replies (5)

Dear Krina,

A collection of members called a chit group makes their contribution in the form of money to collect a chit amount and they bid in an auction and are awarded with the prize money which is equal to the chit amount minus the discount and the foreman's commission.

so say there are 10 people and they contribute Rs. 100 each evry month. so the total collection will be Rs. 1000 per month. now, every month they will take out a prize and the winner gets Rs. 1000.

here, there is an assured prize of 1000 to every contributor since the duration of the fund is such that it matches with the no of contributors. so, in this case, the fund willl run for 10 months so that each one gets a prize.

 

the logic is, that you contribute 100 per month and get 1000 in one go...it is a kind of savings...but there jhave been fraudulant schemes also..

in simple terms, it is somewhat like ladies' kitty parties which has somewhat the same logic....

 

- Ankit 

 

hope you got it!!

Thanks a lot ANKIT sir,  really nice explanation thank you so much ...:-) :-) :-) 

you are welcome!!

Yes I got it sir , thanks


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register