TruChit: A Blockchain-Based Trusted Chit Fund System with Creditworthiness Evaluation

Abstract

Chit fund is a peer-to-peer saving and borrowing scheme operated among trusted groups of people. It is a reliable source of funds in emergencies with no guarantor and low-interest rate. Despite their enduring benefits, chit funds face challenges related to trust, transparency, and security. At present, unscrupulous subscribers might join chit-funds, borrow money, and make payment defaults. This leads to disruptions in contribution cycle and affects overall functioning. Additionally, non-transparent record-keeping and transaction processes, hinder participants from verifying fund activities, creating a susceptible environment for fraud and malpractice. These challenges are an obstacle to the sustainability and trustworthiness of the chit-fund system. Therefore, to overcome aforementioned challenges, this paper proposes TruChit, a blockchain-based chit fund system with creditworthiness evaluation framework. It leverages the Adaptive Neuro-Fuzzy Inference System (ANFIS) to assess the creditworthiness of subscribers, which ensures the credibility and reliability of individual participants. Further, proposes permissioned blockchain-assisted chit-fund framework with role-based access control to instill trust, security, and transparency within chit-fund operations. Moreover, the efficacy of TruChit is evaluated by analyzing credit score dataset and achieves 93.5% accuracy, which is better than other approaches.