Simple. Transparent. Empowering.
A chit fund is a time-tested financial tool that blends the benefits of savings and borrowing allowing members to contribute monthly and access a lump sum when they need it most. At Sri Iswarya Balaji Chits Private Limited, we follow a structured and transparent process to ensure every member feels secure and confident.
1. Formation of a Chit Group
A group of individuals come together to form a chit group. Each member agrees to contribute a fixed amount every month for a specific tenure.
2. Monthly Contributions
Every member pays the fixed monthly subscription amount to the chit fund.
3. Monthly Auction / Draw
Each month, one member receives the pooled amount (called the “Prize Amount”).
This happens in two ways:
Auction: Members can bid by offering a discount (called the foreman’s commission).
Draw: If no auction is held, the winner is selected by lot.
4. Disbursement of Funds
The winner of the month’s auction or draw receives the chit amount minus the auction discount and service charges. A detailed receipt is issued.
5. Continued Participation
The winner continues contributing every month until the end of the tenure — ensuring fairness and equal opportunity for all members.
Illustrative Example
Chit Value: ₹5,00,000
Members: 25
Monthly Contribution: ₹20,000
Tenure: 25 months
Each month, one member gets the pooled amount through auction or draw. All members get the chit amount once by the end of 25 months.
