Who is a foreman in chit funds? What power does he have?
The whole chit fund operations are overlooked by one member of the fund known as the Foreman. Foreman acts on behalf of the chit fund management company by collecting the monthly investment from each chit fund member to recording member details and overlooking the auctioning process. The chit fund company gives the Foreman a pre determined sum of money (usually 5%) of the amount collected as remuneration for his services.
The chit fund scheme is managed by one of the members, who is known as the Foreman. He is responsible for collecting the subscription amount from the subscribers, recording details of members and conducting the auctions. For these duties, he is paid a fee, which is generally 5% of the amount collected. The Foreman’s fee is reduced from the amount paid to the subscriber who wins the bid. Any extra amount from the monthly collections is distributed equally among all the subscribers.
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