Chit is a 3-millennia old financial instrument, intimately connected with India’s rural and urban economic life
for centuries. It is a dual-purpose instrument of both borrowing & saving. It has no financial intermediation.

Each Chit Group is a Self-Help Group. Members invest a fixed amount every month. This collection (Prize Money)
is available for borrowing. The price for availing it is known as Discount, which is distributed among all the members including the beneficiary. Selection of the beneficiary is done through auction.

Chit funds are the nearest thing to a Bank in many parts of India. They mobilize huge amounts of small savings and offer the same as some sort of microfinance.

This is how Shriram Chits built a vast customer base, reaching rural and semi-urban areas.