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AWARENESS AND IMPACT OF CHIT FUNDS

Author Details:

Mr. VIKASH PRABHU.R

II M.COM(CS)

Department of Corporate Secretaryship PSG College of Arts & Science

Coimbatore- 641014

Co-Author Details:

Ms. INDHUMATHI G

Assistant Professor

Department of Corporate Secretaryship PSG College of Arts & Science

Coimbatore- 641014

Abstract: Chit funds are a traditional and popular form of savings and borrowing mechanism in India, especially among the unbanked and underbanked sections of society. Despite their long- standing presence, public awareness of their operational structure, risks, and benefits varies significantly. This study explores the level of awareness among chit fund participants and assesses the socio-economic impact of chit fund schemes. Using survey-based quantitative research, data was collected from 150 participants across urban and semi-urban regions. The study found that while chit funds offer flexible financing options, a significant gap in regulatory awareness and risk perception persists. The paper recommends improved financial literacy and regulatory oversight to enhance the effectiveness and safety of chit fund operations.

Keywords; Chit Funds, Informal Finance, Financial Literacy, Community Savings, India, Financial Awareness, Risk Perception.