Hyderabad: Despite being a popular saving scheme in India, chit funds lack takers in the youth segment. While many lack understanding of the nitty-gritty, others do not have faith in them. Traditionally, chit funds have been catering to the needs of middle class families in India. However, the average chit fund subscriber is anywhere between 35 and 42 years of age.
Mr G.K. Rao, a retired employee, said, “My 25-year-old son is a software engineer and earns double of what I used to earn just before my retirement. But he lacks understanding on savings by using chit funds. He just gives me money every month and I have to handle everything.”
In such scenario, start-ups are trying to revamp the traditional chit fund process by sensitising younger generations and making it more appealing.
Mr Pavan Adipuram of T-Hub-based start-up ChitMonks said, “It is fact that not many young people like chit funds. However, on our platform, the average age of a person participating in a chit fund is 27. We could achieve this just by making people understand the process and providing the required tools for the entire process. However, there is lack of participation from women.”
ChitMonks introduces them to the registered chit funds which have online presence. Such start-ups are less in number.
However, there are youngsters who understand the chit fund process, but do not like the conventional mode payment. Ms L. Priyanka, a 28-year-old software engineer, said, “Chit funds helped me a lot with short-term money. Since it is mostly cash-based, not many prefer it.”
The chit fund segment currently runs in an offline mode because of which companies are unable to reach their targeted segment. Due to the lack of customer transaction history, the accountability is left to branch managers who take the final decision. Therefore, some start-ups are enabling fund firms online.
Start-ups like Chitcare from Hyderabad and Kyepot from Mumbai are giving web-based support through the ERP application software and client server application for chit fund companies.
