Advertisement Remove all ads

Identify and explain the concept from the given illustration: Sara makes a monthly contribution to a fund jointly created by her friends. The collected fund is then given to a chosen member - Economics

Short Note

Identify and explain the concept from the given illustration:

Sara makes a monthly contribution to a fund jointly created by her friends. The collected fund is then given to a chosen member through lucky draw.

Advertisement Remove all ads

Solution

Concept: Chit fund

Explanation:

  1. Chit fund is an unregulated non-banking financial intermediary in which members make regular contributions to the fund. Bids/ draws are made based on some criteria mutually agreed upon by members. Accordingly, the collected fund is given to the chosen member.
  2. Hence, this illustration relates to the concept of ‘chit fund’ as Sara makes a monthly contribution to a fund created by friends and the collected fund is given to a chosen member through lucky draw.
Concept: Structure of Money Market in India - Unorganized Sector
  Is there an error in this question or solution?
Advertisement Remove all ads

APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 9 Money Market and Capital Market in India
Exercise | Q 5. (2) | Page 92
Advertisement Remove all ads
Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×