From modest beginnings in Thrissur in the 1800s to provide loans to traders and merchants to tide over financial problems, chits funds or kuri companies have grown by leaps and bounds in Kerala, with an estimated annual turnover of Rs 70,000 crore (Rs 700 billion).
These companies provide employment to about 35,000 people directly and an equal number indirectly.
There are about 5,000 kuri companies in Kerala, with Thrissur district accounting for the maximum of 3,000.
All Kerala Kuri Foremen's Association general secretary M K Antony told PTI that chit fund companies have prospered, despite difficulties in running them due to enactment of 'unhealthy legislations' over the years.
The banking industry in the state has also acknowledged the contribution of chit funds to the development of Kerala.
Chit funds are dually regulated by the state government and the Reserve Bank of India. They are registered with the registrar of chit funds under the state government and are regulated by the RBI.
The concept of chit funds came into being in the 1800s when Raja Rama Varma, ruler of erstwhile Cochin state, gave a loan to a Syrian Christian trader, keeping a certain portion of it to himself for administrative and other expenses.
Gradually the practice spread to other parts of the country and even abroad, including Myanmar and Sri Lanka.
But real streamlining of operations was somewhere between 1830 and 1835, when the Chaldean Syrian church started Kuries under its name and issued passbooks to subscribers as evidence of enrolment, he said.
