In a chit fund, all the members are bound to contribute a fixed amount on a monthly basis. For example, if a chit group has 10 members, one among them stands as a member and a foreman too.
Foreman or chit manager is the one who manages several chit operations and thereby conducts auctions too. He is responsible for the amount paid by the other members. He needs to keep track of the auctions and the members’ who have won the particular auction. The benefit of chit manager is that in every auction, 5% of the winning amount will be given to him/her.
As we all aware of the fact that chit funds are bringing a major revolution in the saving and borrowing realm. Compared to the savings account, chit funds are way better to help people in hectic situations. Chit funds help an individual to save money and at the same time, he/she can borrow money which when needed at the auction time.
Which is better in chit funds? Saving or borrowing?
According to the report, around 58% of the households employ chit as it results in saving bulk money. Let us see it in detail.
Chit as a saving vehicle
Usually, chit fund participants are more likely to join chit funds in order to save money. As per research, only 6% of households wish to borrow money through chit funds.
Chit funds are the great savoir in the money-saving field. Many individuals are searching for a way to save money. In that case, chit funds bring bliss in the saving realm.
Another added advantage is that the chit members can withdraw their savings amount at any time by bidding in any auctions.
Chit as a borrowing vehicle
In chit funds, the amount can be borrowed at any auctions by bidding the amount in need. Through borrowing, the individuals experience repayment flexibility. Unlike many conventional bank loans, the amount borrowed from chit funds can be paid off like amortising loan.
For more details regarding Chit Software visit: Chit Fund Software Live Demo or contact us at toll free: 1800-200-1766 / 7397723052.
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