How chit fund works?

Unlocking the Mystery: A Comprehensive Guide on how Chit Fund Works

Step-1
How chit works
Step-1

How can you get started it?

How chit fund works: Subscribers are clubbed together into groups according to the chit schemes they have chosen. They pay a monthly subscription to create the 'Pot' regularly from which the first month installment made as a deposit to obtain PSO and agreement number. A group will start its functioning as soon as all the slots in a group are filled in.

Step-2
Importance of Chits
Step-2

The Auction

The auction process allows the members to place their bids following the amount they wish to borrow from the Pot.

Step-3
Importance of Chits
Step-3

The Successful Bidder

Once the members have placed their bids, the lowest bidder merits the chance to win the amount they have bid for. A lucky draw is conducted in case of multiple bidders bid the same lowest amount and therefore the winner shall be announced.

Step-4
Importance of Chits
Step-4

Due diligence - Document verification of chit fund

The documents due diligence shall be carried out to make sure the future receivables before the disbursal of the prize money as a part of credit policy. Kopuram collects fewer documents comparing to the other players in the market.

Step-5
Importance of Chits
Step-5

Defrayment

The prize money is paid to the successful bidder after all the required assessment is completed.

Step-6
Importance of Chits
Step-6

Distribution of Dividend Amount

Subscribers including a successful bidder enjoy the left out amount in the pot as a form of dividend which shall be distributed equally among the subscribers in the group.

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