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The Kerala State Financial Enterprises Limited (KSFE) in the Indian state of Kerala, is a government-run chit fund and lending organisation. This Miscellaneous Non-Banking Finance Company is wholly owned by the Kerala government. Thiruvananthapuram, Attingal, Kollam, Alappuzha, Kottayam, Ernakulam, Kattappana, Thrissur, Malappuram, Kozhikode, Kannur, Pathanamthitta, and Palakkad are just a few of its 13 regional offices. The services provided by KSFE include the KSFE Chitty, loans and advance plans, deposit plans, fee-based services, and securities acceptable. There are several other alternatives to KSFE Chitty for borrowing, saving or investing money like The Money Club, My Paisaa, Shanthala Chits and many more.
To know more about how chit funds work
What is a Chitty?
Chit basically means transaction. It is also known as chit, chitty or kuree. The way chit funds work is that an individual enters into an arrangement with a predetermined number of others stating that everyone will contribute to a specific sum of money or gain. When it is his turn, he pulls the required amount of money by either claiming it himself, by lot, or through some sort of auction. He must pay back the money he earned through regular payments spread out over time. The Chitty is under the supervision of a person (called foreman) or an institution. They manage the operations of the chitty, finances, and overall efficiency. They receive a commission from each Chitty for doing this.
- To determine the prize winner in a Chitti, the foreman writes the names of participants on a little piece of paper and folds it. It is known as Kuri.
- These chits are thoroughly mixed in a vessel and then one participant selects one chit from the vessel.
- After reading out the member’s name from the chit, the prize winner is announced.
- The prized chit is taken out of the vessel and the same continues at the following installment.
आज ही अपनी सभी जरूरतों के लिए बचत करना शुरू करें
Benefits of Chitty
- Chitty can be used as a savings vehicle for all types of people, including traders, business people, self-employed people, etc. Any desired asset or portfolio can be built during the chitty’s term.
- Compared to other sources of cash or loans in the financial market, Chitty can be utilized as a low-cost form of loan by all individuals.
- With the help of Chitty, any future financial requirements and goals may be simply anticipated and achieved.
- According to Indian tax regulations, traders can use chit funds as the least expensive source of capital for business purposes, and net outflow in chitty is a deductible business expense.
- Chitty can be used as an investment. The prize money may be invested or used for other investment or profitable purposes.
- In contrast to other banking or financial products, the effect of inflation will be essentially nonexistent in chitty because the corpus is paid back far before the chitty’s termination date.
- In the Chitty plan, tenure or duration and denomination are flexible. An individual can choose the tenure or installment amount depending on his needs and capacity.
- Enrolling in a chitty for the right length of time will ensure that you can meet all of your future financial goals and needs, including those related to construction of home, purchase of assets, foreign travel, children’s education or marriages, medical expenses, retirement planning and so on.
KSFE Chitty Plans
- Chitty can be used as a savings vehicle for all types of people, including traders, business people, self-employed people, etc. Any desired asset or portfolio can be built during the chitty’s term.
- Compared to other sources of cash or loans in the financial market, Chitty can be utilized as a low-cost form of loan by all individuals.
- With the help of Chitty, any future financial requirements and goals may be simply anticipated and achieved.
- According to Indian tax regulations, traders can use chit funds as the least expensive source of capital for business purposes, and net outflow in chitty is a deductible business expense.
- Chitty can be used as an investment. The prize money may be invested or used for other investment or profitable purposes.
- In contrast to other banking or financial products, the effect of inflation will be essentially nonexistent in chitty because the corpus is paid back far before the chitty’s termination date.
- In the Chitty plan, tenure or duration and denomination are flexible. An individual can choose the tenure or installment amount depending on his needs and capacity.
- Enrolling in a chitty for the right length of time will ensure that you can meet all of your future financial goals and needs, including those related to construction of home, purchase of assets, foreign travel, children’s education or marriages, medical expenses, retirement planning and so on.
Short Term Chitty
The KSFE chitty are of various durations. Short-term chitties, which have a duration of 30 to 60 months, are suitable for subscribers who need the prize money right away. This is because there won’t be as many customers bidding the chitty for the maximum discount. As a result, there will be a better chance for bidding early and the members can auction the chitty for the best price to cover their emergencies. It is the best way you can save money and accumulate a lumpsum amount at the end of certain period of time
Long Term chitty
Long term chitty is usually investment chitty. These chitties last from 60 months to a maximum of 120 months. People who want to invest will benefit more from long-term chitties since they will receive higher profits in the form of dividends. In lieu of loans and other financial instruments, preplanned long-term chitties are considered a better investment and borrowing option by individuals. It is a secure approach to earn a sizable sum of money by making periodic installment payments for future requirements.
Multidivision Chitty
The most popular Multidivision chit in the KSFE has one lot and three auctions every month. The distinctive feature of this chit is that every Non-Prized subscriber will have the chance to win the full prize amount each month after supervisory commission is subtracted, and the remaining Non-Prized subscribers will have the ability to take part in three auctions. The total discount excluding foreman commission, obtained from all divisions is equally distributed among all its members. This type of chitty draws more members because there is a potential to win the entire prize sum through a draw, and members also receive additional chances to engage in the auction if they so choose. Customers might choose this wonderful programme in place of loans.
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- There are 4 ways to claim the prize money – three auctions and one lucky draw
- There are no risks involved.
- Through an internet gateway, you can sign up for Chits.
- It also includes a mobile application that enables installment payments and Chit auction participation from any location at any time.
- The prize money may be deposited as fixed deposits. With this plan, you can earn an interest rate of 8.5%.
- A proxy facility is present. The KSFE personnel will attend the auction and collect the chit amount if you fill out the proxy form and send it to them.
- You don’t need to present security documents to withdraw money from KSFE.
- A loan facility is also provided.
- More opportunities to win money at auctions.
- It offers monthly discounts.
KSFE Chitty Products and Services
Chitty
It is a special financial solution that combines the benefits of both saving and borrowing. KSFE Chitty is covered under the provisions of the Central Chit Fund Act of 1982, Hence, it is risk-free. The term of chits ranges from 30 months to 120 months, with monthly installments ranging from Rs 1000 to Rs 6,000,000.
Loans & Advances
KSFE offers a number of loan schemes to help those who need funds for various purposes. KSFE Loans have relatively low interest rates. KSFE offers all types of loans to satisfy the needs of the customer such as Gold loans, Home loans, Personal loans and Chit loans. No extra charges are levied, at any time when the loan is closed in advance or when any lumpsum payment is made towards the loan amount. Processing charges of KSFE are also comparatively low and affordable. KSFE ensures speedy processing of loans so that customers can avail the loan quickly in case of any emergency. Also, security norms of KSFE are viable and simple.
Deposit Schemes
The interest rates on the various types of deposits that KSFE offers are competitive. Long-term and short-term deposits both are included in this. Additionally, KSFE offers deposit schemes known as Sugama that are comparable to bank savings accounts. Deposits made using Chit Money and Senior Citizens’ funds earn more interest than standard fixed deposits.
You can earn higher rates of interest on KSFE fixed deposits. Many of the elements of the fixed deposit programme that KSFE offers are comparable to those of bank term deposits. However, KSFE offers a return that is more than what banks offer. Interest rates for public deposits are 6% annually, Chitty Prize Money deposits are 6.50% annually, and senior citizen fresh deposits are 6.50% annually. Since interest on accounts over Rs. 10,000 can be withdrawn monthly, the actual returns are higher. Normally 75% of the fixed deposit amount can be availed as loan. This facility is called Fixed Deposit Loan.
Know how much and the ways you can save money from your salary
Securities Acceptable
Various schemes of KSFE that offers financial assistance such as Chitties and loans can be availed against the security provided by the customer. Advances under all of the aforementioned plans may only be made in exchange for a specific kind of security that guarantees the repayment of the loan plus interest. The following are the various securities that the KSFE accepts for its various schemes:
Personal Security Fixed Deposits of KSFE and Other Bank Deposits
Short Term Deposits of KSFE Deposit-in-Trust of KSFE
L.I.C. Policy Bank Guarantee
Pass Book of Non-prized Chitties of KSFE National Savings Certificates VIII Issue
Kissan Vikas Patra NRI Deposits
Property Security Gold Ornaments
Sugama Security Combined Security
Fee Based Services
Western Union money transfers, Express money transfers, and safe deposit locker facilities are just a few of the fee-based services offered by KSFE to the public.
In order to offer consumers money transfer services, KSFE partnered with Western Union, a global supplier of money transfer services, to operate as their agent partner for offering money transfer services from anywhere in the world. Only international transfers of money are permitted to India. Under this plan, transfers both inside and outside of the country are not allowed.
What is KSFE Pravasi Chitty Scheme?
Although KSFE primarily uses an offline chit system, it has created an internet portal called Pravasi Chits specifically for the NRI community. To join the KSFE chitty, NRIs can go to the KSFE Pravasi Chit website or download the mobile app.
The KSFE Pravasi Chitty scheme was launched by the Kerala government in March 2018 as a savings and insurance programme for non-resident Keralites (NRK). The Kerala Government intends to raise money through the project for a number of additional programmes to solve the State’s infrastructural issues.
Features of KSFE Pravasi Chitty Scheme
- Offers financial security to Keralites who are not residents.
- Foster a culture of saving to advance the state’s economic standing.
- An Android mobile app for NRK’s convenience.
- Internet- and mobile-based chits.
- Facility to send installment payments online.
- Online auction through smartphone.
- A transparent, secure, and safe bidding procedure
- Support for social media, email, SMS, and chatbots combined
- 24-hour contact centre for handling complaints
- International standards-compliant testing of application security.
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Eligibility
No residents of India are eligible to apply for this programme. Only NRK residents who are abroad are eligible for the programme. Currently, the programme is only available to Malayalees living in the UAE.
After joining the programme, the subscriber must pay a monthly fee that ranges from Rs. 1,000 to Rs. 5,00,000. This plan’s duration can be anywhere between thirty and one hundred months. Various online payment options are available.
Benefits of the KSFE Pravasi Chitty Scheme
The following benefits are included in the programme:
- Insurance coverage for expats, which essentially implies that the subscriber’s family would get money in the event of the subscriber’s demise. They will also receive pension payments if the necessary investments have been made.
- Transactions under the KSFE are regarded as safe because they are carried out in compliance with the Central Chit Fund Act’s requirements.
- The total of the periodic subscription, called the chitty amount, will be given out as “prize money” to the person who bids by allowing for the maximum reduction in the prize money. According to the current Chitty Act, the highest reduction that may be offered is 25%. If more than one subscriber is interested in making a bid at a 25% reduction, the names of those bidders will be put to a draw.
- The KSFE mobile app allows for status checks and updates to automatic calculations and reports, pending monthly installments, and other information.
The Money Club - An alternative to KSFE Chitty
Money Club is a top AI-driven online chit fund platform in India that guarantees a safe, secure, and convenient lending experience. Our goal is to offer a solid savings solution that is more dependable, more affordable, and better. With just a few clicks, The Money Club provides a modernised and trustworthy new-age chit platform for flexible savings, great yields, and simple borrowing.
We have already crossed more than 2.98 lakh app downloads with a total pooled amount of more than 68 crores. The total number of registered members is more than 2.59 lakhs who have formed more than 43,000 clubs.
Hurry! Join the community of more than 2.59 lakhs and start investing.
- Like-minded individuals from anywhere in India, can join The Money Club and start their journey with us.
- You can join a club just with a few taps on your phone screen and 2 verification calls from our verification team.
- You save time and effort by registering, verifying, bidding, conducting transactions, and nearly all other platform activities online without having to deal with a tonne of paper work.
- The Money Club operates daily and 3-day frequency clubs, which enable members to borrow money whenever they need it or make returns over a brief period of time.
- The Money Club also runs lengthy frequency clubs like the fortnightly and monthly clubs, where the auctions take place every 15 days or every 30 days, in addition to the high frequency clubs.
- Through a gamified customer journey, you can advance to bigger sums of Money Clubs as you establish a solid transaction history.
