Kerala shows the way in clean chit fund biz
When the entire country is witnessing a clampdown on investment schemes and chit fund companies, in Kerala one such firm is thriving---the state-owned Kerala State Financial Enterprises (KSFE) Limited. Ramesh Babu reports.business Updated: May 09, 2013 16:50 IST
When the entire country is witnessing a clampdown on investment schemes and chit fund companies, in Kerala one such firm is thriving---the state-owned Kerala State Financial Enterprises (KSFE) Limited.
With an annual turnover of Rs. 18,500 crore, it is one of the biggest profit-making PSUs in the state.
Its popularity can be gauged by the fact that the company had to put up big hoardings in its office to say particular chits were oversubscribed.
Started in 1969 with Rs. 2 lakh capital, initial days weren’t that rosy for KSFE.
Eyeing quick bucks many opted for fly-by-night operators. When most of these seedy firms downed their shutters, people turned in a big way to KSFE that ensured decent returns but not unimaginative ones.
Currently it is running several monthly chits starting from Rs. 500 to Rs. 5 lakh. In 2012, its profit was Rs. 70 crore and in 2013 it is expected to cross Rs. 105 crore. It has 470 branches across the state employing more than 6000 workers. All chits are disbursed through auctions and in the end KSFE takes a commission of 5% of the total amount.
“Reliability and security are our catchwords. Investment has to grow with security and care. We never give tall promises and take investors for a ride. That is our success mantra,” said managing director of KSFE T Rajendran.
“KSFE is the only government-sponsored chit in the country which is running successfully. Many states have shown keen interest to follow our model,” he said, advising that proper regulation and strict vigil was needed to check the seedy ones. “Enough laws are there to check these fly-by-night operators. What we need is proper implementation of these norms,” he said.
Besides chit funds, KSFE is into many other spheres including vehicle, gold, education loans and fixed deposit schemes. Of these, main revenue earner is chits. “You will get decent but not fancy returns. Security is ensured because it has the government stamp,” said Velayuthan Nair, 64, a retired government employee who invested in three different chits this year.