Importance of Chit Fund

[abhishreshthaa]

Chit Fund is very valuable to those sections of the business community, which finds it difficult to get their credit needs met by commercial banks that are reluctant to lend to this segment, mainly due to the administrative burden and cost involved in them. Chit Fund companies also provide employment to a large group of people.


E.g. In the state of Tamil Nadu, the Chit Fund business has provided direct employment opportunities to over 30,000 people and indirect but full-time employment to another one lakh people working as agents.


If proper legislative environment could be created that would encourage the entry of large and medium sized industrial houses into the business of chit funds, job creation in next ten years could be in the region of 10 lakh new jobs, without the government having to make any capital investment.

 

[rosemarry2]

Chit Fund is very valuable to those sections of the business community, which finds it difficult to get their credit needs met by commercial banks that are reluctant to lend to this segment, mainly due to the administrative burden and cost involved in them. Chit Fund companies also provide employment to a large group of people.


E.g. In the state of Tamil Nadu, the Chit Fund business has provided direct employment opportunities to over 30,000 people and indirect but full-time employment to another one lakh people working as agents.


If proper legislative environment could be created that would encourage the entry of large and medium sized industrial houses into the business of chit funds, job creation in next ten years could be in the region of 10 lakh new jobs, without the government having to make any capital investment.

Hi abhi,

Here I am sharing Understanding Chit Funds - Price Determination and the Role of Auction Formats in Rotating Savings, so please download and check it.