This is one key point that every chit subscriber would like to know in short. We at IBG eChits are making an effort to present this to you in 5 simple steps. The majority of this discussion will be around the chit auction process as that is where the subscribers vest their savings in the form of monthly subscriptions.
Setting up the chit group
Chit fund company floats a chit fund scheme and enrols members for the chits. This is where you would enter the chit scheme as a chit subscriber. You need to look at the monthly subscription amount and chit period before you join the chit scheme as a subscriber.
Chit subscriber will have to contribute an agreed fixed chit contribution every month before the end of a fixed date. This is called as your monthly chit subscription. It is the responsibility of the chit subscriber to pay the amount on time and through the chit period.
Chit company collects monthly subscriptions from the chit group subscribers and conducts chit auction. The subscribers who are interested in taking the prize money that respective month will need to participate in the auction. It is the responsibility of the subscriber to let the chit company know that he/she are interested in the auction that particular month well in advance. If only one subscriber participates in an auction he/she are allowed to take it.
Chit companies also sometimes face a situation where no one would like to participate in the chit auction in a particular month. In such a case, a reverse auction is held and the prize money is offered to the subscriber who takes the lowest.
In a nutshell, the key responsibilities of a chit subscriber include choosing the right chit scheme, paying subscription amount on time, staying in the chit group throughout the chit period and expressing their interest in participating in an auction for prize money whenever they need it. It is also their responsibility to seek/monitor their chit from time to time.