A group of people come together and pool a certain amount of money on a fixed date on every month and on that same day one of the member is awarded with the money pooled by all the members. This process keeps on repeating itself until and unless each member in the group has been awarded with the money at most once.
Let us take an example to understand the concept better.
Let us assume a group of 12 people. They all agree to pool Rs. 1000/- each on 15th of every month.
So, on 15th of every month an amount of Rs. 12000 is pooled by all the 12 members.
One name out of these 12 members is drawn at random.
The person(*) whose name is drawn is awarded with the pooled amount i.e. Rs. 12000/-
This process continues for 12 regular months with one non prized member getting the money every month.
Note: *Person who receives the pooled amount once during the 12 months tenure is not eligible to participate again in the draw for the award.