BUILDING TRUST AND CUSTOMER ENGAGEMENT IN CHIT FUND SYSTEMS: STRATEGIES FOR SUSTAINABLE GROWTH

Abstract

Trust and customer engagement are pivotal to the success of chit fund systems, which rely heavily on community participation, mutual confidence, and the perceived credibility of fund operators. This study explores the key determinants influencing trust-building and customer loyalty within chit funds, with a focus on operational transparency, regulatory compliance, digitalisation, and effective communication strategies. Based on data drawn from four hundred participants, significant behavioural trends were identified—highlighting the role of financial literacy, scheme customisation, and technological integration in improving participant satisfaction. The findings reveal that factors such as the management of chit instalments, information availability, dispute resolution mechanisms, and fund monitoring are critical to sustaining engagement and trust. While most demographic factors like age and locality showed limited variation in perceptions, awareness was significantly higher among urban participants, pointing to a gap in rural outreach and education. The study offers constructive and classified recommendations for key stakeholders. For chit fund operators, implementing blockchain-backed systems, mobile platforms with real-time updates, and certified audits can significantly enhance transparency. Customised schemes and digital customer engagement tools like autopay and live chat support further build rapport. For customers, financial literacy initiatives are essential to understand risks, plan bids effectively, and make informed decisions. Regulatory bodies are encouraged to set uniform digital reporting standards and encourage third-party certification for credibility. The research underscores that in a financial ecosystem built on collective trust, proactive relationship management and technological innovation are not only beneficial but essential for the sustainable growth of chit fund operations.