KOCHI: The dominance of Kerala State Financial Enterprises (KSFE), the government owned chit fund running company in the state, is slowly losing its market share in the chit fund business from the financial year 2012-13. The KSFE, having 95.3 percent of the registered chit fund business in Kerala in 2012-13, is having only 64.3 percent of the business in 2014-15, according a study undertaken by Kerala State Planning Board on Non Banking Financial Institutions in the state.
KSFE, the only such government entity in the country established in 1969, was a minor player in the chit fund business till the mid 1970s. The company made rapid strides since the 1980s aided by the failure of a slew of private chit funds and emerged as the market leader by 2000-01 with 79 percent of the business. It went up to 95.3 percent in 2012-13 before showing a gradual decline in the past three years, the study said.
The share of registered private chit funds in the state rose to 26.7 percent in 2013.14 compared with a meager 3 percent in 2009-10, the study completed in 2015 December said. The study found the increase in the registration of private chit funds from 2012-12 is mainly due to the implementation of Chit Funds Act 1982 and Kerala Chitties Act 2012.
“The growth in the registration of private chit funds can be attributed to the effects of implementation of Chit Funds Act 1982 which prevent the outflow of foreman to other states for registration”, the study found. The study also said increase in the number of registration of private chit funds has led to an increase in the revenue of the state government in the form of registration fee and stamp duty.
The total revenue from chit funds to the state government increased to Rs 28.19 cr in 2014-15 from 13.46 cr in 2009-10. The number of chits registered in the state rose to 13,737 in 2014-15 from 8,810 in 2009-10, the study said.
