Chit is a mutually beneficial scheme where in a group of people contributes towards the chit value and one member from the group is given the prize amount and the dividends are distributed to all the other members.
Every month, one subscriber can get the collected quantity supported a bidding system. Generally, those that area unit in would like of cash in an exceedingly explicit month participate within the bidding,
Bidding : Subscriber with the bottom bid (also referred to as as highest discount) is allowed to require the quantity. Typically there’s a limit on most bidding quantity. Once a subscriber wins the bit, he’s not allowed to participate within the bidding once more however he needs to continue paying the monthly subscription quantity.
Foreman’s fee: The account fund scheme is managed by one among the members/chit fund, WHO is understood because the Foreman. The Foreman’s fee is reduced from the quantity paid to the subscriber WHO wins the bid.
Payout: the quantity left from the monthly collections is distributed equally among all the subscribers. This can be adjusted in next month contribution.