BC has come from the word Beesi (relating to the value 20). I came to know about this concept a couple of months before. It caught my attention for the uniqueness, simplicity and yet the potential dangers in it. It’s a way which is used(quite frequently to my surprise) by local people belonging to lower middle class societies to fulfill their debt needs and investment aspirations. It is also known as Committee in most parts of India.

Now the traditional means of getting debt at a local level involves either dealing with a bank (which grants loans based on lots of financial criteria) or borrowing from a friend (lot of trust involved if you ask for a big amount) or the local money lenders (who charge huge interest). These are all difficult avenues for lower middle income class and lower income class people. Similarly investment options are very limited to PPF and Post Office Savings. It is probably these reasons which led to the development of this unique methodology of investment and debt raising.

Beesi involves a group of people (can range from 5-20) where each person contributes certain amount of money towards a pool of funds. Typically the person initiating the beesi is the cashier and is responsible for each transaction and servicing of everything that goes for that particular beesi. So for example, lets assume that Mr. X is the cashier of a beesi having 10 members and each member contributes Rs. 10,000 towards the pool which amounts to Rs. 1,00,000. Now the committee holds an auction among the 10 members for granting this pool as a debt. The auction amount is basically the interest portion on the pool. So in our beesi of Mr. X with a pool of Rs. 1,00,000 the auction starts at lets say Rs. 5000. What it means is that the person bidding Rs. 5000 will, if he wins the auction at that bid, take the Rs. 1,00,000 pool for an interest cost of Rs. 5000 so effectively he will get Rs. 95,000. So each member is given a chance to bid. Let’s assume that Mr. Z is the winner of the auction at Rs. 9,000 bid amount. So Mr. Z will get and Rs. 91,000 (Pool of Rs. 1,00,000 at a loss of Rs. 9,000). The Rs. 9,000 bid amount is equally divided among his 9 beesi members. So at an investment of Rs. 10,000, each member gets a profit of Rs. 1,000 upfront. Mr. Z keeps paying back the debt in monthly installments.

Borrowers get loans at cheap rates and Investors get high returns. And most importantly useful for those who can’t get debt from banks. Now obviously there are risks here. The biggest is the credit risk that the person does not pays the principal payments. For the same reason beesi is often formed between close members of society where trust level is high.

Now, you can create your own beesi with your close members on your mobile. The Money Club mobile app helps you manage your beesi in an extremely easy, safe and secure way.

How to form your own beesi on the Money Club?

1. Search for ‘The Money Club’ on Google Play and download the app (app icon has blue background with white ‘M’ in the center).
2. Discuss with your friends about Money Club.
3. Create a Classic Club (enter club name, number of members, monthly contribution amount, frequency and club start date). Must discuss with your friends before setting up your club.
4. Invite your friends from your phone contacts list.
5. Set the bid date.
6. Activate your club. Enjoy Money Clubbing!

Watch the below video to understand how to do beesi on mobile: