How It Works ?
A chit fund is a financial arrangement that combines savings and borrowing within a group of participants. Here’s a step-by-step explanation of how chit funds operate
Key Points to Note
The foreman manages the fund, ensuring smooth operations. A small fee is charged for their service.
Auctions or draws are conducted publicly to maintain trust.
Safeguards, such as collateral or guarantors, are often in place to prevent defaults.
