Introduction

Every investor invests their savings for a minimum expected return. Other than the factor of
minimum expected return, there are several factors which determine the decision of an
investor to choose the investment option. Every investor is unique and that is why their
preference over different investment options varies based on the factors like risk perception,
expected return, liquidity and soon.

Process of sacrificing the present value of an asset for an expected future cash flow or
benefits from it is known as investment. An investor refrains from consumption in the present
in the hopes of a greater return in the future. Investment may be influenced by rate of interest,
with the rate of investment rising as interest rates fall, but some other factors which are more
difficult to measure may also be important.

The “Chit” is the financial arrangement wherein a certain number of persons/subscribers

enter into an agreement that subscribes to a certain sum of money by way of installments over
a definite period of time. Each subscriber shall in his turn, be entitled to a prize amount as
determined by the lot, or tender or auction or in such other manner as specified in the chit
agreement. Thus, the Chit Fund Company collects the subscriptions by way of installments
over a definite period from the certain number of subscribers and distributes the same as a
prize amongst them. The operations of the Chit Fund Company are governed by the Chit
Fund Act, 1982, administered by the State Governments. While the deposit taking activities
of, such firm is regulated by the Reserve Bank of India.

The chit scheme is also known by different names, such as Chitty, Kuri, Chit, Chit Fund, etc.
and is either organized by the financial institutions or privately i.e. between friends or
relatives. The chit fund company has played a dominant role in the financial development of
the people of Kerala by offering easy access to the credit. Chitty is the most common practice
prevalent in different sections of the society. This study aims to measure the investors
‘preference and attitude towards different investment avenues and specially to ascertain the
investor’s attitude towards chit fund with special reference to KSFE Neyyattinkara main
branch, Trivandrum district. To achieve these objectives the primary data has been collected
through structured questionnaires and the secondary data collected from books, magazines
and from other published data. For measuring various phenomena and analyzing the collected
data effectively and efficiently and to draw sound conclusions, percentage analysis and Likert
scale issued.
Definition of the problem

The study is attempted to analyze the preference and attitude of investors towards different
investment options especially towards chit fund with special reference to Kerala State
Financial Enterprises Ltd,Neyyattinkara main branch, Trivandrum district. This study helps
to know customer needs and their expectations about the company to make their best use and
spot out weakness of the firm to make plans and take suitable corrective action

Scope of the study

 To understand the customer perception towards chitty in KSFE.

 To know how chitty is differ from other investment options.
 To evaluate the overall company performance.
 To evaluate the customer service being provided by the KSFE.

The present study title “Customer perception towards investing in chits in KSFE” has
been carried out to study the profitability, rate of return, security level and other aspects
about KSFE, a government enterprise. It is hoped that the study would be beneficial to
KSFE in particular and all stakeholders in general.

Objectives of the study

 Primary objectives:
 To study the investors perception of chitty as an investment option.
 Subsidiary objectives:
 To know the satisfaction level among different criteria of investment like safety,
return, company’s performance etc.… for KSFE chitty.
 To know the benefits and advantages of KSFE chitty.
 To determine the strength and weakness of KSFE chitty.
Research methodology

According to ‘Fred Kerlinger’, “Researcher is an organized enquiry designed and carried

out to provide information for solving a problem”.

SOURCES OF DATA

The data are obtained from primary and secondary

Primary data is data that is collected by a researcher from first-hand sources, using
methods like surveys, interviews, or experiments. It is collected with the research
project in mind, directly from primary sources. The term is used in contrast with the
 term secondary data. Secondary data is data gathered from studies, surveys, or
experiments that have been run by other people or for another research.

 Tools of analysis
 Likert scale
A Likert scale is psychometric scale commonly involved in research that
employs questionnaires. It is most widely used approach to scaling responses
in survey research, such that the term is often used interchangeably with rating
scale, although there are other types of rating scales.
 Percentage analysis
Percentage analysis is the method to represent raw streams of data as a percentage(a
part in 100-percentage)for better understanding of collected data. Percentage analysis
is applied to create a contingency table from the frequency distribution and represent
the collected data for better understanding.

Limitation of the study

 There are 7930 customers in KSFE. The study is conducted only for 80
customers in the branch.
 Due to time constraints more number of customers were not consulted.
 Interpretation is made by analyzing data for only 3 months

Chapterization

 Introduction, definition of the problem, scope of the study, objectives of the

study, research methodology, review of literature .
 Theoretical framework
 Industry profile and company profile
 Data analysis and interpretation
Findings, suggestion and conclusions.

Review of literature

Shri. K. M. Balavenkataraman (2013) studied about progenitor Moyy Murai. Moyy means
call money pooled and Murai means custom. It was a sahaya nidhi, with a strong element of
co-operative spirit. The principle of chit funds was known to rural India for a fairly longtime.

C.P.S Nair (2011) had tried to place the role of chit funds in proper financial perspective. The
study emphasized the need to regulate the activities of chit funds and at the same time,
perceived their role as active mobilizes of savings of the community and as a useful
complement to other financial institutions.

Karthikeyan, (2006) has conducted research on Small Investor’s Perception and the study found that
majority of investors of both semi urban and urban areas were very much willing to invest in small
savings schemes in future, provided theyhavemoreforsavings.

Somasundaram,(1998)has found that bank deposits and chit funds were the best known mode
of savings among investors. Attitudes of investors were highly positive ad showed their
intention to save for better future.

Arangasami,(1992)has observed that more and more dependence on mobilization of

resources through small savings will ensure and promote self-reliance. He concluded that
Central Government should give proper assistance and encouragement to the small savings
agencies, which will be useful not only in mobilization offends but also for the economic
development.

Tamilkodi,(1983) has stated that small savings schemes have a psychological appeal and it
provides an

opportunity for ordinary men,women,and even youngster to park

theirsavings.Itreachesalargenumber

ofpeopleandcoversawiderangeofareas.Shealsosuggestedthateffortsshouldbetakentosimplifysm
all

savingsschemestosuittheneedsofilliterateandsociallydowntroddenpeople.