Chit funds are a financial instrument believed to have originated in India sometime in the 1800s. They grew in popularity because they were more accessible than banks or other credit facilities catering to the urban and rural populace. In a chit fund, you contract with a predetermined group of participants to contribute a specific sum in regular installments over a defined period. Chit funds, more prevalent in Asian countries, have evolved and transformed in recent years. Financial institutions can formally announce their chit funds, and informal associations, where a group of friends, neighbours, or relatives get together, exist as well.