In India, chit fund scheme has become very popular in recent days. To the delight, it has become the main parts of the unorganised money market industry. A chit fund company provides the users with access to both the savings and borrowings. Chit fund companies with a great story has been paved its pathway right in the chit fund track. Here, we are going to look at the chit fund companies functions, business model and the chit fund business registration in India.
What actually is a chit fund company?
You might have heard the answer for this question in different versions. Any entity that ought to manage a chit fund schemes is a chit fund company. Such companies ought to manage different schemes. Each of the schemes has a set of members with a limited duration. At first, the chit fund companies have to be registered to start a chit fund scheme in their organisation.
In India, chit fund has been an on-growing industry that comes under a valuable saving scheme. According to the Chit Funds Act of 1982, the chit fund companies have been managed, conducted, and regulated.
Though the chit fund companies in India comes under central legislation governance, state government is responsible for their administration. In particular, Tamil Nadu funds were guided by Tamil Nadu Chit funds Act of 1961, Maharashtra Chit Funds Act of 1975 in Maharashtra and in Kerala, Kerala Chitties Act 1975.
In the registration operation, there are processes like floating of chit fund schemes, finding the potential members, enrolling the members into the chit, contribution management, chit auctions, fund distribution and book maintenance. To start with a chit fund company, registration is the prior thing. After registration, try to understand the business model of the chit fund.
All the chit schemes have a time period, contribution, and a set of members. The number of members in the chit will be equal to the time period of the chit scheme. Each member will contribute a fixed amount during every monthly auction.
Chit fund business model
Let us assume a chit fund operation with around 12 members for 12 months with a monthly contribution of 10,000 each. Every month the chit company will collect 1,20,000 rupees from the chit auction. After collecting the amount, less the chit company’s fee and the discount, the remaining will be distributed to the 12 members.
If any person is interested in receiving the auction amount, then he/she is allowed to receive the entire chit amount. If more than one individual needs money at the same month, the one with the lowest bid will be given the amount. Then, the chit discount is evenly spread among the remaining members.
This is the business model of the chit fund company. Many people may not have an idea or out figure relating to the chit funds. Few wish to start a chit fund scheme with their friends and closed ones. It also goes well and good. While going for the chit fund company, know whether the company has been registered properly in order to have a safe chit fund scheme.
For Free demo chit fund software Visit: Chit Fund Software Live Demo or Contact us at Toll Free: 1800–200–1766 or 7397723052.
Check out our client testimonial before taking an action: https://youtu.be/uGMToDS40Z0
No comments:
Post a Comment