A Study on the Financial Literacy Levels amongst Chit Fund Investors with Reference to Bengaluru City

Abstract

The Indian financial market has been developing at a rapid pace in recent years with the Government playing an active role in regulating it and providing much safer and regulated avenues to the citizens for savings, investments as well as borrowings. However, we have been witnessing numerous scams in financial markets, especially in semi-regulated and unregulated markets, including the pyramid and ponzi schemes that initially offer exorbitantly high returns and ultimately swindle the investors’ money. In spite of such scams, and also with better accessibility to safer avenues for savings, investments and borrowings, investors’ preference still seems to be inclined towards the much riskier options like the Chit Fund Schemes, both regulated as well as unregulated. This article aims at studying and comparing the financial literacy and awareness level of alternate investment avenues amongst chit fund investors and non-chit fund investors.