Bangalore: Mutual Funds and Insurance Companies are eyeing Chit Funds, a traditional savings scheme to expand their reach to small town investors, reports Shailesh Menon of ET Bureau.

Large chit funds from Tamil Nadu, Kerala, Karnataka, Andhra Pradesh and New Delhi are expanding into financial product distribution to increase their revenues.

Well known chit fund companies like The Balussery Benefit Chit Fund, Margadarsi Group, MCI Bangalore Chits, Shriram Group and Wealth Junction along with many small players have ventured into financial product distribution.

All these companies have created a different business vertical to launch their distribution venture, as indicated by the Chit Fund Act of 1982. “We’ve requested for an amendment to the Chit Fund Act, which will allow us to run the distribution business within our core chit funds business,” said T.S. Sivaramakrishnan, All India Chit Fund Association secretary and proprietot of The Balussery Benefit Chit Fund, as quoted by Economic Times.