When I arrived in Kenya, Sue was one of my first few friends. Sue is friendly, welcoming and undoubtedly an extremely kind lady. This beautiful Kenyan also introduced me to her chama group of 11 other African ladies.
Chama meaning “group” or “body” in Kiswahili, is an informal micro-saving group where individuals pool and invest their savings together. The chama phenomenon arose out of the idea of harambee, which means “all together”, during the late 1980s in East Africa. Initially, chamas tended to be exclusively women’s groups, but as it grew in sophistication and success, men also started participating in chamas as well. Members contribute an agreed amount of money with the goal of helping each other grow economically and possibly achieve financial independence.In Kenya,it is estimated that there are more than 300,000 chamas managing a total of Ksh 300 billion (USD $3.4 billion) in assets. Some even estimate that every 1 in 3 Kenyans are chama members.
Like my chama group, the majority of chama operate in a system known as “merry-go-round”. This is where fixed amount of money is collected from the group members and given out to a certain member on a rotating schedule. This process is repeated until all members get their share, hence the term “merry-go-round”. Such structure also relies on trust amongst each of the members, for such reason chamas are also known for their exclusivity.
My first chama meeting at Sue’s house started with the delicious smell of the Kenyan classic dish nyamachoma (barbecued meat) and huge table filled with Kenyan specialities. Yet before the enjoyment of the Kenyan cuisine, the group first discussed what had brought them together: their investments. The treasurer announced the financials and the saving amount each individual member made to the group, then we came to what is known as “table banking”. Table banking is a concept which involves giving out loans to members using the money collected, basing on the individual saving amounts held within the group. Such loan will be charged with an interest rate (generally varying between 10 to 20% per month).
This way, the pool of money within the group also accumulates with interest. Like many other chamas, this self-help group has the goal of empowering financial independence and encouraging social welfare amongst women. The money saved from the chama can assist members when they fall sick, help each other with home restorations, buying livestock or utensils.
Yet, what drives this informal cooperative society are members’ desire to belong and to form friendship amongst members. Most chamaare groups of former classmates, colleagues at work, neighbors, friends and relatives. No doubt, this chama group which I am privileged to be part of is a precious friendship group which provides social support at times of need. The notion of “sisterhood” where a group of ladies walking together on their life journeys was certainly emphasized.
To the new group of wonderful friends made from my chama – thank you for having me joining to invest collectively and having fun while at it – this is indeed the very charm of a chama!