Chit Funds, also known as Kuri in northern Kerala and Chitty or Chit in southern Kerala and elsewhere are primarily traditional South Indian Financial Institutions mobilizing the scattered savings of individuals and lent out the same to a member of the group on the principle of mutuality. This paper examines the significance of Chit Finance in the state of Kerala in promoting capital formation and economic growth. The study investigates the motivational factors for joining Chits by subscribers. It also examines the financial implications of joining Chits.