How does a Chit Fund Operate?

Chit Funds

A powerful financial tool with a rich history and unique advantages combines saving, borrowing, and community spirit all in one. Whether you're building your dream home, planning a wedding, or simply want a secure savings plan, Chit Funds can be your key to financial success.

How does it work?

Chit Funds are a rotating savings and credit association where members contribute regularly to a common pool, and each month, one lucky member receives the entire amount for their needs.

Join the Circle

Choose a chit fund with a fixed duration (e.g., 1 year) and monthly contribution amount. The number of members determines the total lump sum each month.

Bid for Your Big Break

Every month, a reverse auction takes place. Members compete by lowering their bids for the chance to win the full amount.

The Winner Takes the fund

The member with the lowest acceptable bid wins the pot! They pay a small discount, which gets shared among the other members as a bonus.

Reverse Auction

In chit funds, a reverse auction determines who gets the lump sum each month. Instead of bidding upwards, members bid downwards, lowering their own bids to win.

The member with the lowest acceptable bid wins the pot.
They pay a small amount, which gets shared among other members as a dividend.

This unique system allows for:

Competitive borrowing rates
Potential early access to the lump sum
Benefitting all members through bonus dividends

Key points to consider

Research thoroughly:

Understand the terms, conditions, and organizer's background.

Choose a registered fund:

Opt for chit funds regulated by authorities for added security.

Start small:

Begin with a smaller chit fund with trusted members for a smoother experience.

Join Chit Market today and connect with reliable chit fund opportunities near you. Let's empower your financial journey, together.