This is a new series that will review chama account options for investment groups and chamas.
Investments groups today have various options when it comes to savings. Banks have rolled out specialised products for Chama’s offering affordable loans as well as training and mentorship.
One of the key advantages of having a specialised Chama account is that you will have access to favorable terms in terms of lending as well as access to professional advice to meet to your investment needs.
We will be looking at various Chama focused accounts offered by different banks .
However, to kick us off today, is the Bank of Africa Chama Account.
The Chama Product of the Bank of Africa (BOA) is tailor made for formal and informal groups pulling together their resources with a desire to create wealth. The account comes with pocket friendly terms and value addition for members.
Here are the basics you need to know about this Chama account from BOA
To open the Chama Account, your group must be registered as a company and produce a written resolution. A certificate of Incorporation must also be produced and is used in the event of borrowing. Other requirements for opening the account include the original and photocopy of signatory’s national Identity Cards (ID) and passport size photographs.
It is an attractive package which does not levy monthly charges while at the same time the deposits earn a competitive interest of 4.5 % .
Once operational, members can enjoy seamless deposits. This means there is no limit to the amount of deposits made. There is also an additional standing order facility for the savings accounts.
To qualify for a loan your Chama will need to operate the savings account for six months. This will give your Chama access to a loan facility of upto three times your deposits . It is hence imperative on the members to use the flexible saving module under the product to maximize on the savings and hence tap on the increased resource base when taking the loans.
The amount of credit extended ranges from a minimum of Kshs 500, 000 to a maximum of Kshs 50 million. However, borrowing cannot be granted for personal needs but only for wealth creation. Group members can guarantee one another when taking the loan.
The repayments period can last upto 48 months ( 4 years) which will give your Chama ample time to invest and reap profits.
The BOA Chama Account is unique in that apart from offering normal banking services for investments groups, group members can also have a learning experience through quarterly investment clinics . Chama’s also get access to a personalized investment manager to guide them through their investment plans. The investments manager is also responsible for Chama loan credit processing.
For group members who are also account holders at the Bank of Africa, there is the benefit of free standing orders from their own accounts.
Do you have an account with BOA for your chama? What is your feedback?
This post was written by Martin Njuguna
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