![]() In the 1990s, several chit-fund-like investment options were developed that technically fall outside of the chit fund regulations Private chit funds declined significantly in Kerala as a result. ĭue to the rigid provisions of the 1975 Kerala Chitties Act, many fund organizers moved to other states and started operating there. By 2012, it has grown to serve 2.5 million customers with Rs 14,646 crore in annual business. In 2000, it had 77% of the capital volume of the chit fund business in Kerala, though just 37.5% of the number of chit funds. Its explicit purpose was to provide an alternative to unscrupulous private-sector chit fund organizers. The first state-run chit fund, Kerala State Financial Enterprises, was established in 1969 by the Kerala government. During the 1930s, 166 banks were conducting chit funds in Kerala. Institutional organizers including partnerships, limited liability firms, co-operatives and joint-stock banks entered the business. The organizer became more active in soliciting funds for the fund and merchants and salaried workers, not just farmers, had also begun to participate. Ĭhit funds went through several stages of overlapping formalization in the 20th century. In the 1930s and 1940s, between 1000 and 10,000 formal funds functioned in the state every year. Various reports in the 1930s point to the popularity of chit funds in current-day Kerala. In 1894, economic historian Edith Simcox mentioned that chit fund lotteries were used to raise money for special events like weddings in South India. In 1887, William Logan, erstwhile Collector of the Malabar district of the Madras Presidency, described the custom of chit funds among friend groups in that region. The chit fund is said to be an institution that has been handed down since ancient times. This section needs expansion with: the history of chit funds outside of Kerala. ![]()
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