Final Project (Gayatri) PDF
Final Project (Gayatri) PDF
Final Project (Gayatri) PDF
INTRODUCTION
Chit
It is a contract between the foreman, as the promoter is called, and the
subscribers, who join voluntarily. It is a financial system under which the periodical
and regular savings of a group of subscribers are made available to each subscriber,
a specified amount every month (installment) for a specified period.
The pooled funds every month are offered to the subscribers at monthly
auctions and the subscribers who bids for the highest discount is declared the prize
winner and given the prize amount a proper security. A prized subscriber also should
continue to pay the subscriptions till the termination of the chit. The amount foregone
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Chit group
A chit group refers to a specified number of members agreeing to subscribe a
specified amount for a specified period. For example, 40 members, 40 months,
Rs.500/- a month. The number of members and the number of months to be same.
Foreman
Any person under the act responsible for the conduct of the chit and includes
any person, such as branch manager, discharging his functions.
Chit agreement
The chit agreement is a contract between the foreman and the individual
subscribers to a chit group. It is a set bye-laws or regulations dealing with procedure
for the conduct of chits. It will be signed in duplicate, duly witnessed. The chit
agreements shall contain the name and address of the subscriber, the number of
installments and the installment amount payable, the interest/penalty for delayed
payment, the probable date of commencement of chit and its duration, the manner of
deciding the prize winner at each installement, the maximum discount to be foregone
at each installment, the mode and proportion of dividend and foremans commission,
the date, time and place of auction, the installement at which the foreman is to get the
chit amount, the name of the bank, the security to be furnished by prized subscriber
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etc., though each subscriber sign a declaration in the application from that he has read
and understood the terms and conditions of the chit agreement, the declaration of all
the subscribers are detached from the application form, pasted in a piece of paper and
filed with the registrar.
To assess the level of satisfaction with Neeladri chit funds and so that corrective
action can be taken needed.
accommodation of small capital and the availability of loans on easy terms. The
dominant feature of the transaction
The chit funds show a great deal of adaptability to the conditions that prevail
in the area in which they have to operate. The indebted landlord, the needy trader, the
improvident weavers and other artisans, the hard working daily labourers and factory
workers and the helpless vegetable vendors all derive benefit from the transaction.
There are importantly three types of chits, (1) The Thattu chit, (2) The Auction chit, (3)
The Prize or the lottery chit. It is inevitable that there are a variety of malpractices in
the system. If such malpractices are only lapses that are bound to exist in any
institution then efforts should be taken to bring the working of such institution under
rigid control to reduce malpractices to the minimum.
Srinivas and Higuchi Observed that Chit funds have been grouped under the
category Mutual Credit Suppliers, because the demand and supply of credit is mutualthat there is a give and take process involved. Participants typically support each other
for credit needs in mutuality. The money supplied or saved by some participants is lent
and borrowed by some other participants. Thus the benefits of the operation are
mutual to all participants and equally distributed. The central idea of mutual credit
suppliers is that they encourage savings from the participants. According to the
information given by The Banking Commission nine banks in Andhra Pradesh,
Kerala, Mysore and Tamil Nadu were conducting chit funds in 1968.
Dr. C.P.S. Nayar had tried to place the role of Chit Funds in the proper financial
perspective. The study emphasized the need to regulate the activities of Chit Funds,
and at the same time, perceived their role as active mobilisers of savings of the
community and as a useful complement to other financial institutions. The work was
an attempt to study all the known types of chit funds, classifying, naming and defining
them wherever necessary. The study also attempted to examine the economic aspects
of chit funds on an empirical and analytical basis. The analysis covered all the patterns
of business of chit funds working throughout the country.
The Author also pointed out that the basic principle underlying a chitty is
accumulation of savings. The unique feature of savings in a chitty as against the
savings in other types of financial institutions such as commercial bank, the post office
savings bank, etc. is that there is a sort of compulsion in effective savings. While
examining the history of chit funds, Nayar has also discussed different stages of their
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evolution. Stated that the original home of chit funds is South India, in the last three
decades there has taken place a growth of chit funds in several parts of India. He has
mentioned the growth of chit funds in the Union Territory of Delhi and in the state of
Maharashtra. He estimated the annual turnover of business of 125 chit companies at
.217 lakh, in Maharashtra and in Delhi, 109 registered companies with annual
turnover of 1.6 Crore, by the end of 1968-69.
The study of Dr. C.P.S Nayar, highlighted that the chit funds is different from
others Savings and credit institutions in that it is more than a savings bank to the saver
and more than a lender to the borrower. The chitty offers many facilities to the
borrowers. (1) The loans in most cases are unconditional. (2) They are clean loans.
Tangible assets are rarely used as security. (3) They can be rapid in easy installments.
(4) The borrower need not keep a margin for the loan. The increasing popularity of
chit funds even in those areas where the banking habit of the people is wide spread
shows that the scheme is basically sound and cannot be brushed aside as an
irrelevant or anachronistic business practice. It becomes easy when the chit funds are
operated by disciplined institutions such as the commercial bank, a Government
owned company or a public limited company.
Shri K.M. Balavenkataramana studied about progenitor Moyy Murai. Moyy
means call money pooled and Murai means custom. It was a sahaya-nidhi, with a
strong element of co-operative spirit. The principle of chit fund was known to rural
India for a fairly long time. For years, women in villages had formed the habit of saving
a handful of rice or other grains for a rainy day, and this became very useful to face
unexpected guests and unforeseen expenditure. A chit fund is a financial arrangement
or institution based on mutual trust and confidence. A chit fund is primarily a mutual
benefit society in which some people join to save and others to borrow. A financial
intermediary gathers the savings of the people and distributes the funds to numerous
borrowers, thus affecting the allocation of real resources. The difference of a financial
intermediary and a chit fund is, chit fund collects the savings of the members by
periodical subscriptions for a definite period of time, and it connects the borrowing
class directly with the lending class and the pooled saving is lent out to the same group
of savers.
In so far as the chit funds have no control over the end-use of the funds, the
intermediation does not necessarily result in an efficient use of resources. The efficient
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use of resources takes place only in the case of those members who utilize the prize
amount in acquiring income-earning assets, which directly or indirectly promote capital
formation. It is therefore; better to consider chit funds as a co-operative endeavour.
G. jagadisan indicated that, some measures of regulation of chit funds. Chit
funds like any other non-banking financial institution are treated as Para-banking
institution. It has been recognized that chit funds arose at a time when banking facilities
had not developed and thus they filled an important credit gap in the economy. Another
important aspect is that many companies are coming to rely upon chit funds as a
source of finance. The fact that the strength to a chit fund company is the foreman and
his reputation for promptness, straight forwardness and honesty. It is very essential
that the number of chit companies in each state is reduced over a period of time so
that supervision and control become effective. Every chit company should obtain a
license before commencing its business. And also the company should be issued the
license only if it furnishes the bank guarantee. Government should use the banks as
agents to supervise the working of chit funds. Besides it will make the Reserve Bank
to exercise some control over chit funds.
S. Narayanaswamy addressed that chit fund was attractive in so far as it
proved a ready-money bank for the subscriber, what time it was equally attractive for
the enterprising foreman, who got the feel of the subscribers monthly contribution on
which he paid no interest, though he was free to earn it himself by sagacious and
shrewd investment. The five per cent commission is the wage for his organizing the
outfit. Chit fund was born and has stayed to serve the needs of a closely knit
community of people living very near each other often in the same village, each of
whom was keenly conscious of the rainy day that might call abruptly for a large sum
of money. Communications were tenuous or did not exist. Perhaps, the close proximity
of all subscribers made for smooth and successful conduct of the chit operations.
Mohandas attempted to evaluate the Central Chit Funds Act 1982 as a
regulatory measure for chit business. And also deal with the features of Chit finance,
conceptual issues involved in chit fund regulation and also with the economic
implications of the major provisions of the Act. The study suggested a graduated
ceiling on discount ranging from thirty to fifty per cent for chits of different durations.
To eliminate unnecessary competitive bidding, the study recommended restriction on
open bidding up to twenty five or thirty per cent of the chit amount and allow further
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bidding up to fifty or sixty per cent only on the production of cash deposits above the
initial limit. The study also analysed the economic gain to the saver and cost of
borrowing in terms of effective annual interest yield and effective annual interest cost.
Itoop M.L has identified the factors leading to the growth of Chit Funds in
Kerala especially in the 1980s. He also examined its utility as a saving instrument and
supplier of easy credit and thus employment potential. The findings of the research
revealed that quries help industry, agriculture and even house construction. The only
unproductive expenditure related to the money spent on marriages and on durable
consumer goods. The study also found that the cost of credit is cheaper compared to
the cost of credit with reference to the commercial banks other financial institutions.
Joseph M A evaluated various savings / investment schemes available in
comparison to the chit schemes. It showed that chit schemes can be treated as the
best investment alternative available. The rate of return on chit was calculated by
dividing the annual dividend by the annual net subscription. The study showed that the
rate of return calculated for a chit was much more than the rate of return applicable to
the various investment alternatives. It also presented the various characteristics of
chit schemes and concluded that unauthorized chit business was in the ruins due to
hard and stringent provisions of the enactments and KSFE was far away from the
reach of the common people.
S. Radhakrishnan argued that Chit Funds and Nidhis have not received the
attention they deserved in the scheme of reforms. The paper included certain
measures of reforms to enable Chit Funds to grow on sound and healthy lines,
including the introduction of credit rating for all incorporated Chit Fund companies.
Indira Raja Raman tried to explain Rotating Savings and Credit Associations
and their similarities with Chit Funds in India. The article showed that these
associations are functional in various parts of the world including highly developed
countries. Random ROSCAs are similar to Prize chits in India, while bidding ROSCAs
are similar to our Auction chits.
Rajendran attempted to provide a brief resume of the evolution of credit in
Kerala, the different practices and the institutions concerned, since the beginning of
the 19th century. The role of chitties in terms of their number, extent and volume of
operation up to 1936 has been included in the study. The study pointed out that the
vital links between the preinstitutional and the institutional phases were provided by
Chit Funds which gradually emerged into banking institutions.
Namrata Acharya mentioned that chit funds are looking down in terms of
number and are growing in terms of value. The registered chit funds find it less
lucrative to fund the poor due to the rising operating costs. According to AIACF,
running chit funds is no longer viable. Though the money circulated has increased, the
number is going down. It may come down further in the years to come. On the other
hand, unregistered chit funds have found a utility in evading tax and access to large
deposits. The clout of unregistered chit funds is tremendous. The number of
unregistered companies is almost 100 times than the registered companies.
Prof. Mudit Kapoor opined strongly that the chit funds are an important source
of finance for small businesses and low-income households in India. Registered chit
funds are away from low value chit schemes due to increased operational costs and
strict rules imposed by Government. Chit funds are very safe mode of financing and
saving. They offer loans at lower interest rates than money lenders and sometimes
than banks also. The size of the unregistered chit funds is stated about 67 times of the
registered industry in Delhi and 3.2 times in Chennai. On an average 50% of chit fund
clients are poor households and most of them save for particular target events like
marriage, education etc., and also they value the flexible provision of credit.
Customers feel comfortable with the bidding process and 96% of them perceiving
registered chit industry as safe or very safe. Most funds have moved away from
smaller chit schemes due to strict regulatory norms imposed by the Government and
increasing wealth levels in India.
Preethi Rao suggested that chit funds are good financial sources to small
businesses, which has been suffered from the money lenders with their high cost of
loans and banks with their stringent procedures. They can save the money with chit
funds and when in any emergency need of capital they can take loan out of the money
saved. The Author has mentioned the reasons of failures of chit funds, like the
regulatory hurdles due to the stringent rules proposed by the Government and the
increased costs of operations for the registered companies are the setbacks of the
industry. Because of these reasons, the registered companies are shifting their
operations to unregistered companies.
Chapter - 2
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Lorries services
Fund services
NCFPL Objects
This chit is aimed to encourage saving habit among members and help them to meet
their financial needs on the principles of cooperation, good faith and trusteeship
among the members and the company as the foreman, who conducts auction or
drawing chits.
NCFPL Enrolment
Members who intending to become subscribers shall be enrolled on receipt of
application in prescribed form mentioning the group number and details of the chit
along with the 1st installement. The foreman reserve the right to refuse admission to
any applicant without assigning any reason what so ever. On admission, every
subscriber shall be given an enrolment number and a chit pass book with all details.
In case of loss/torn of pass-book, a duplicate pass book will be issued against a
payment of Rs. 100/11
Mode of payments
The Forman/company shall not responsible for any payment made to an unauthorised person. Subscriber shall pay the instalments wide account payee
cheques/pay-orders/DDS. In case of cash payment it is the responsibility of the
subscriber to get a proper receipt for the same. Outstation cheques are not accepted.
A sum of Rs. 200/- will be charged as bank charges in case of return of cheques by
the bankers (dishonour of cheques).
Additional Sureties:
The Foreman shall be at liberty to call for the further or fresh security/surety or
both from prized subscribers who have drawn chit amount when he finds that what is
furnished is insufficient, inadequate or defective.
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Amendment of Rules:
The Company reserve to itself the right to amend or decide rules on any matter
that is necessary for the smooth and proper conduct of the chit and the same shall be
binding for all existing as well as future subscribers.
NCFPL advantages
Why with us
This chit scheme is aimed to encourage saving habit among members.
Members who intending to become subscribers shall be enrolled on receipt of
application.
Auction shall start with a discount of 2.5%. Chit auctions for all groups are
conducted.
For the convenient of the subscribers collection for the chit monthly
subscription can be made at their door steps.
Chit amount will be paid to a successful bidder.
Who we are
Neeladri chit fund private limited has exhibited expertise in the financial area
and solid operational excellence ever-since 1988 its incorporation. Neeladri provides
good source of finance not only savings to house holders, employees, business people
and also different types of people Viz., small investors, businessmen, women
entrepreneurs small scale industrialists etc. It also provides a means of savings for
contingencies.
Payment options
1. Quick pay by NEFT/RTGS fund transfer:
On receipt of intimation card you can do a fund transfer to our bank A/C by
logging into your own banks online banking system and transfer money by
using the NEFT/RTGS option there.
2. Collection Agent
3. Payment at Branch
4. Debit and Credit Card (coming soon).
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the evolution of banking, had its origin in Southern of India, when the transactions
were in the Barter System.
From a humble beginning to its present gigantic growth, the chit fund Institution
has now attained the status of a quasi-banking system, and has turned out to be a
boon to the aggressively growing economy of the nation. According to a report of Asian
Development Bank, the turnover of some 1066 chit fund companies, as far back as
1986 was, an astounding Rs.81.6 billion. The estimated turnover of Registered Chit
companies all over India as of now is exceeding Rs 35,000 crores per annum. Under
the aegis of M/s Bill & Melinda Gates Foundation, we are on the process of reaching
the Lower and Middle income household, in the Micro Finance model. Institute of
Financial Management and Research, Chennai , who were engaged for the first ever
study of this Industry on an all India basis is now on the process of launching different
Pilot Projects in this regard.
hour is have a user-friendly legislations, in tune with the ongoing Government policies
Though the total number of members in the Association through the State and District
Associations are exceeding 30,000 in number, the immediate challenge before the
Association is to cover the unregistered segment expected to be at least 100 times of
the registered ones to the mainstream in the overall interest of every one.
An intelligent investor is one who diversifies his risk portfolio. Entire disposable
income or surplus income should not be invested in any one single financial product
alone. Investments must be spread across various financial products like Insurance,
Stocks, Mutual Funds, Bank Deposits and Chits.
The individual investor should act consistently as an investor and not as a
speculator. This means that he should be able to justify every purchase he makes and
each price he pays by impersonal, objective reasoning that satisfies him that he is
getting more than his moneys worth for his purchase Mark Cuban.
Chit as a loan:
Small and Medium Enterprises (SMEs)
Cash flows are the lifeline of business - big or small. Usually big businesses
manage to meet their capital requirements with the help of banks and other formal
financial channels. Banks extend timely support to big enterprises and it is a win-win
situation for both parties. Small businesses are traditionally avoided by banks and
formal nancial institutions because of their accounting procedures, lack of proper
recordkeeping and are unable to provide satisfactory security. They have been
historically wedged between the money lenders, with their exorbitant cost of loans,
and banks, with their stringent procedures. Chit funds are a more suitable nancing
model for small businesses mainly because they do not require rigorous
documentation. Chit funds have been helping small businesses overcome their
nancial constraints. As and when the need arises, SMEs bid in the auction and
receive the loan out of their own funds. Once they receive the loan, they continue to
pay the monthly contributions, and this accounts for payment towards both the interest
and principal which makes the repayment easier and less arduous. Also, in chit funds,
small traders can decide their own interest rates depending on their need. Chit fund
interest rates are in effect the market determined interest rates. Thus a small
enterprise, with prudent planning can meet their capital requirements with the help of
a Chit Fund.
Individual / Family
All of us would like to own a Car, a Home, Land, a Personal Computer an LCD
TV and myriad other possessions to make our life worth living. It is possible to own
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every conceivable luxury with proper financial planning. In short you can fulfil every
dream with proper financial discipline. Investing a portion of your income in chits would
help you own any gadget or vehicle land and other assets etc you have been keen on
possessing. An equated monthly installment (EMI) offered by a retail outlet would
include hidden charges and interest costs. Most importantly, the asset itself is
mortgaged/hypothecated to the finance company or retail outlet offering such EMI.
Planning via a chit fund would not entail any such hypothecation and the interest cost
would be equal or less than what is offered by the retail outlet or finance company.
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cumulative interest group, the entire amount is returned only on maturity of the fixed
deposit.
A chit on the other hand can help an investor by paying him an competitive
interest rate than banks. The interest is paid in the form of dividend. If an investor has
lump sum amount, he can invest the same in a vacant chit. By investing in a vacant
chit, the waiting period is shorter; the investor can participate in an auction and use
those funds for any planned or unplanned expenditure or wait until the end of the chit
and enjoy higher dividends.
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using a chit. The interest cost, paperwork and sureties required are much lesser in
comparison with a personal loan.
Chits (vs) Mutual Funds
Systematic Investment Plans or SIPs as they are popularly known are
marketed aggressively to the younger generation, high net worth individuals and the
like. A SIP is a financial scheme where investments are made daily, monthly or
quarterly. These investments are invested by the fund company in the stock markets.
Every fund has a Net Asset Value (NAV). The fund issues shares. The number of units
allotted to the investor would depend on the amount he invests and the NAV of the
fund at that particular point in time. So the number of units issued would vary
depending on the NAV. It is important to note that the NAV is entirely dependent on
the market conditions prevailing at that time. There are chances where the current
value of investment is less than the actual cost of investment. There are entry and exit
loads i.e. charges which have to be paid by the investor to join or exit the fund. To sum
up investing in a mutual fund carries moderate to high risk depending on the market.
Investing in a chit is similar to a SIP, where the investor would invest money monthly
into a chit fund group he chooses. The monthly installment would vary depending on
the competition in the group. There is no entry or exit fee charged and the risk involved
in investing here would be very low in comparison to a mutual fund.
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Chapter 3
RESEARCH METHODOLOGY
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Research methodology
Marketing research is the systematic and objective process identifying,
formulating and objective stating of a marketing problem and collecting, processing
analysing, interpreting and presenting data in order to find a justified solution for a
problem that guides the data collection and analyse phases of a research projects.
This research implies the identification of present trends in their fields of marketing
and also identify for alternative courses of action.
There is never a single standard and correct method of carrying out a piece of
research. Because there are many ways to tackle a problem - some good, some bad,
but probably several good ways. There is no single perfect design. A research design
is not like the solution to a problem in algebra. There are three basic types of
research designs, viz., (i) Exploratory, (ii) Descriptive, and (iii) Casual, which are
discussed in the ensuing text.
Fundamental to the success of any formal research project is a sound research
design. A good research design has the characteristics, viz., problem definition,
specific methods of data collection and analysis, time required for research project,
and estimate of expenses to be incurred. The function of a research design is to ensure
that the required data are collected and they are collected accurately and
economically.
A research design is purely and simply the framework or plan for a study that
guides the collection and analysis of data. It is a blueprint that is followed in completing
a study. It may be worthwhile to mention here that a research design is nothing more
than the framework for the study ensures that: (1) the study will be relevant to the
problem, and (2) the study will employ economical procedures.
All marketing research projects must start with exploratory design. This is a
preliminary phase and is absolutely essential in order to obtain a proper definition of
problem at hand. The major emphasis is on the discovery of ideas and insights.
Exploratory study is characterized by flexibility and informality; Formal design is
conspicuous by its absence in exploratory studies. Exploratory studies rarely uses
detailed (structured) questionnaires. These do not involve probability-sampling plans.
Ingenuity, judgment and good luck play a part in such studies. Notwithstanding the
flexibility, the research experience has demonstrated that (i) literature surveys, (ii)
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experience surveys, and (iii) analysis of selected cases, are particularly productive in
exploratory research design.
Descriptive research design is also called explanatory design. This is the one
that simply describes something such as demographic characteristics of individuals
who use the product. The descriptive study is typically concerned with determining
frequency with which something occurs or how two variables vary together. This study
is typically guided by an initial hypothesis.
As exploratory study is characterized by its flexibility and informality, a
descriptive study can be considered usually rigid and formal. A descriptive study
requires a clear specifications of what, who, when, where, why and how aspects of the
research. It requires formulation of more specific hypothesis and testing these through
statistical Inference techniques. Despite its merits, the important fundamental
weakness is that descriptive research does not find the cause and effect relationships
among variables.
Studies that establish casual relationships between variables may be termed as
explanatory studies. The emphasis is on studying a situation or a problem in order to
explain the relationships between variables. Experimental or casual is a classical form
of research, which owes much to the natural sciences, although it features strongly in
much social science research, particularly psychology.
The methodology regarding the study on investor awareness & preferences
towards chit funds with reference to Neeladri chit funds private limited Hyderabad is
discussed as below.
25
The same
No of respondents favourable
Percentage =
______________________________
Total respondents
27
Chapter - 4
28
Part 1
The 1st part of this presents the economic factors of the respondents by taking
variables such as gender, age, employment, monthly income etc.
Factors
Category
Gender
Male
84
84%
Female
16
16%
18-25
8%
25-40
20
20%
40-60
36
36%
Above 60
36
36%
Govt. Employee
12
12%
Professional
12
12%
Private firm
16
16%
Self Employed
20
20%
Business person
4%
Agriculturist
20
20%
Others
16
16%
68
68%
Between 1 lakh to
12
12%
Age
Employment
Frequency Percentage
Employee
Income
2 lakh
29
Between 2 lakh to
16
16%
0%
0%
4%
3 lakh
Between 3 lakh to
4 lakh
Between 4 lakh to
5 lakh
Above Rs. 5 lakh
Source: Primary data
Table 5.1.1
Interpretation:
It is observed from the table that out of 100 respondents, 36% of the respondents are
in the age of 25-40 years and 40- 60 years and nearly 84% are males. Majority of
respondents are working like farmers and self- employment and their income Rs.1 lakh
below per annum.
30
No of respondents
Percentage
Female
16
16%
Male
84
84%
Table 4.1.1
Male
Female
16%
84%
Fig no 4.1.1
Interpretation:
The above table shows that 84% of population are male where as 16% of population
are female.
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No of respondents
Percentage
18 to 25
8%
25 to 40
20
20%
40 to 60
36
36%
Above 60
36
36%
Table 4.1.2
40
35
30
25
20
15
10
5
0
18 to 25
25 to 40
40 to 60
Above 60
Fig 4.1.2
Interpretation:
The above table indicates that 8% of respondents lie between 18 to 25 age group.
20% of respondents lie between the age group of 25-40. 36% of respondents lie
between the age group of 40-60 and 36% of respondents are of more above 60 years.
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No of respondents
Percentage
Government employees
12
12%
Professional
12
12%
Private employees
16
16%
Self employed
20
20%
Business person
20
20%
Farmers
16
16%
Others
4%
Table 4.1.3
25
20
15
10
5
0
Fig 4.1.3
Interpretation:
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No of respondents
Percentage
Below 1 lakh
68
68%
12
12%
16
16%
0%
0%
Above 5 lakhs
4%
Table 4.1.4
Above 5 lakhs
Between 4 lakhs to 5
lakhs
Between 3 lakhs to 4
lakhs
Between 2 lakhs to 3
lakhs
Between 1 lakhs to 2
lakhs
Series1
Below 1 lakh
0
20
40
60
80
Fig 4.1.4
Interpretation: The above shows that 68% of respondents lie below 1 lakh income
group, 12% of respondents are between 1 to 2 lakhs of income group, 16% of
respondents are between 2 to 3 lakhs of income group, 4% of respondents are under
the group of above 5 lakhs income. No respondent lie between 3 to 4 and 4 to 5 lakhs
income group.
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Part 2
The second part of this chapter analyses the investment Awareness and Preferences
of investors.
No of respondents
Percentage
Savings bank
56
56%
Fixed deposit
12
12%
Shares/debentures
12
12%
Postal savings
0%
Chit funds
12
12%
Insurance
8%
Others
0%
Table 4.2.1
60
50
40
30
20
10
0
Fig.no 4.2.1
Interpretation:
The table shows that 56% of respondents are investing their savings mainly in savings
bank, 12% of respondents are investing in fixed deposits, 12% in shares/debentures,
12% are investing in chit funds and 8% are investing in insurance.
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No of respondents
Percentage
Yes
84
84%
No
16
16%
Table 4.2.2
16%
84%
Yes
84%
No
16%
Fig no 4.2.2
Interpretation:
The table shows that 84% of respondents are aware of chit funds whereas 16% are
not aware of chit funds.
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No of respondents
Percentage
Education
24
24%
House
16
16%
Retirement benefits
4%
Others
56
56%
investing
Table 4.2.3
60
50
40
30
20
10
0
Education
House
Retirement benefits
Others
Fig no - 4.2.3
Interpretation:
The above shows that 56% of the respondents primary goal of investment Belongs to
others, 24% of the respondents primary goal of investment is for education purpose
and 16% of the respondents goal is for retirement benefits.
37
No of respondents
Percentage
Family
62
62
Friends
19
19
Business partners
Chit agents
14
14
Others
Table 4.2.4
5%
Family
14%
Friends
0%
19%
62%
Business
partners
Chit agents
Others
Fig no 4.2.4.
Interpretation:
The above table shows that 62% of the respondents are introduced by their family to
invest in chitfunds.19% of the respondents are introduced by friends, 14% are
introduced by chit agents and 5% are introduced by others.
38
No of respondents
Percentage
1 to 2 yrs.
48
48%
2 to 3 yrs.
10
10%
3 to 5 yrs.
0%
5 to 10 yrs.
9%
Above 10
33
33%
Table 4.2.5
NO OF RESPONDENTS
1 to 2 yrs.
2 to 3 yrs.
3 to 5 yrs.
5 to 10 yrs.
Above 10
33%
48%
9%
0%
10%
Fig no 4.2.5
Interpretation:
From the above table it is known that 48% of the respondents are members of chit
funds from 1 to 2 years. 33% of the respondents are the members of chit funds from
10 years above. Only 9% of the respondents are the members between 5 to 10 years
and 10% of the respondents lie between 2 to 3 years.
39
No of respondents
Percentage
1 lakh
71
71%
5lakhs
24
24%
10lakhs
0%
Above 10 lakhs
5%
Table 4.2.6
80
70
60
50
40
30
20
10
0
1 lakh
5lakhs
10lakhs
Above 10 lakhs
Fig no 4.2.6
Interpretation:
The above table shows that 71% of respondents belong to 1 lakh chit fund group, 24%
of respondents are belong to 5 lakhs chit fund group and 5% of respondents are above
10 lakhs chit fund groups.
40
Percentage
respondents
52
52%
22
22%
8%
As need arises
18
18%
Table 4.2.7
No of respondents
As need arises
10
20
30
40
50
60
Fig no - 4.2.7
INTERPRETATION:
The above table shows that 18% of the respondents bid when need arises, 52% of the
respondents bid between 2nd and 10th month, 22% of the respondents bid between
11th to 20th month and 8% of the respondents bid between 21st and 30th month.
41
No of respondents
Percentage
5-10%
56
56%
10-15%
24
24%
15-20%
16
16%
4%
Table 4.2.8
60
50
40
30
20
10
0
5-10%
10-15%
15-20%
Fig no 4.2.8
Interpretation:
From the above table 56% of the respondents would forego 5-10%, 24% of the
respondents would forego 10-15%, 16% of the respondents would forego 15-20% and
4% of the respondents would forego more than 20%.
42
No of respondents
percentage
Business investment
38
38%
Private property
52
52%
Working capital
0%
Business assets
10
10%
Table 4.2.9
52
38
10
0
Business investment
Private property
Working capital
Business assets
Fig no 4.2.9
Interpretation:
The above table shows that 52% of the respondents use their chit amount for private
property, 38% of the respondents use for business investment and 10% of the
respondents use for business assets.
43
respondents
Percentage
16
16%
24
24%
56
56%
Others
4%
Table no 4.2.10
Chart Title
4%
56%
16%
24%
Others
Fig no 4.2.10
INTERPRETATION:
The above table shows that 16% of the respondents determine their final bidding by
calculating the interest rate from the from the outside option , 24% of the respondents
determine their final bidding on the rate of return from the project and 56% of
respondents determine final bidding by using both options. And 4% of the respondents
are others.
44
No of respondents
percentage
67
67%
14
14%
5%
14
14%
Interest is low
Easy membership
Table no 4.2.11
14%
14%
67 %
Fig no 4.2.11
Interpretation:
The table shows that 67% of respondents opinion for advantage of chit fund is money
is easy and quickly available by this it is known that maximum no of respondents felt
advantage as it is easy and quickly available.5% of the respondents opinion is interest
rate is very low.by this it is known that they feel it is advantage because of low interest
rate.
45
No of respondents
percentage
33
33%
46
46%
Moderate
21
21%
High secure
0%
Table 4.2.12
High secure
Moderate
Not sure
Interpretation:
The above table shows that 46% of the respondents felt secure in chit funds because
of need, 33% of the respondents are not sure of security and 21% felt secure in chit
funds as it is moderate.
46
Chapter 5
47
5.1Findings:
Neeladri chit funds covered under chit fund act 1982.
According to analysis, male members are preferred to investing more in chit
funds.
The company runs the minimum chit amount is 1 lakh and maximum chit
amount is 25 lakhs.
According to analysis they preferred most in savings account.
Self-employed persons and business persons are investing more in these.
There is minimum of 5% of the bid amount to be foregone by the subscriber
and the subscriber cannot go beyond 30%.
Majority of respondents are working like farmers and self- employment and their
income Rs.1 lakh below per annum.
Money is easily and quickly available in the chit fund.
Opinion of the respondents about the security of investment not at all, but they
feel it is a need.
Usage of chit amount regarding to participants mainly used for private property
Performance of the respondent regarding the level of bidding between 2nd and
10th month.
Friends are the main Influential factor to participate in the chit funds
48
5.2 Suggestions:
Many investors are found to invest during the fall in stock market. So it is
suggested the Neeladri chit funds can capitalize and extend its customer base.
Even though, there is a company profile in product like investments, insurance,
loans, and stock broking, most of the customers are willing to invest the money
in the mutual funds because of getting high returns. The company may derive
more satisfaction to their investors.
The company can introduce more schemes, thus making the company more
attractive or beneficial to the members
5.3 Conclusion:
The project study makes a deep study on the chit fund industry and the responses of
foreman and its subscribers. The project covers the aspect of customer awareness
and preferences towards chit funds. The legal framework governing the Chit business,
and the responses of the members of the Chit Business to know the attitude of the
customers towards customer awareness in chit funds and customer perception
measurement.
49
BIBLIOGRAPHY
The chit fund act, 1982 M/s vijaya Lakshmi publications
Business finance
Financial Management
P.N. Reddy, H.R. Appannaiah, B.G. Sathyaprasad; Himalaya Publication
House.
Finance and Profits
N.J. Yasaswy ; Vision Books Pvt. Ltd.
WEBSITES:
www.mbainfoline.com
www.business.mapsofindia.com
www.aiacf.com
www.ssijmar.in
www.ijrmbs.com
50
APPENDEX
Questionnaire on customer awareness and preferences towards chit
funds with reference to Neeladri chit fund private limited company
1. Name:
2. Gender:
A) Male
B) Female
3. Age:
A) 18 25 years
B) 25 40 years
C) 40 60 years
D) Above 60
years
4. Location:
5. Qualification:
A) Illiterate
B) Up to SSC
D) Up to post Graduate
C) Up to Graduate
E) Ph.D.
B) professional
Employed
E) Business person
F) Agriculturist
D) self
G) others
C) Between 2 lakh to 3
lakh
E) Between 3 lakh to 4 lakh
B) Fixed deposit
E) Chit funds
F) Insurance
C) Shares/Debentures
D) postal savings
G) Others
B) No
If yes, then
10. Primary goal of your investment?
A) Education
B) House
C) Retirement benefit
D) Others
B) Friends
C) Business partners
E) Others
51
D) Chit agents
B) 2-3 yrs.
C) 3-5 yrs.
D) 5-10 yrs.
E) 10 or above
B) 5 lakhs
C) 10 lakhs
D) 10 lakhs above
D) As need arises
B) 10-15%
C) 15-20%
B) Private property
C) Working capital
D) Business assets
D) Interest is low
E) Easy membership
19. How secure do you feel in chit funds?
A) Not sure
secure
20. Did you hear about Neeladri chit funds in Hyderabad?
A) Yes
B) No
52
C) Moderate
D) High