Investment groups, commonly referred to as Chama’s, have existed in Kenya for decades. Chama’s were popularized by women and their merry-go-rounds which they used to save money and meet occasionally for some tea and gossip. They mostly used Chama’s to buy household utensils and save money for family projects like paying school fees.
Today, Chama’s have transformed. There are more people involved in Chama’s , both and men and women; at work, church, school and neighborhoods. Chama money is not just for cups and plates anymore. Groups have diversified their investments from buying shares at the Nairobi Securities Exchange (NSE) to making other capital intensive investments in real estate, export and import business among others.
The Chama movement is worth billions.It is estimated that there are about 300,000 groups in Kenya today which collectively hold a combined asset base of at least Ksh300-billion.
Some of the most successful investment groups include Transcentury Limited Group,which was founded fourteen years ago by a group of 29 entrepreneurs who raised Ksh24 million (approx 280,000 US dollars).
Today, Transcentury boasts of an estimated Ksh11.2 billion portfolio ($135 million)
These two are just examples of thousands of many other groups that have been successful in Kenya. While they make look ‘big’ today, many years ago they were just but dreams and ideas of like minded individuals.
If you have not joined joined or formed a Chama group then you need to. Here is why?
Most people would love to own a commercial building for example or maybe a home, land or invest in a particular project, but they cant because they don’t have enough money.
Being part of a Chama gives you access to these investments. Your Ksh. 10,000 might be too little investment wise, but combined with that of ten other people you suddenly have Ksh.100,000. Multiply that by 12 months and voilà, you have Ksh. 1.2 million. Now that can buy some piece of land somewhere cant it? Congratulations you own 10% of a piece of land.
The other reason you should pool resources together is because banks are now offering loans to Chamas at good rates. More than a dozen banks in Kenya offer not only loans of three times your savings, they also offer training and mentoring for free.
Investing as a group also cushions you from risk, exposes you to a larger pool of talent and expertise. It also strengthens your friendships and encourages you to save.
If you cannot find a Chama to join, then form one.
Simple. Look for friends and relatives at work, school, home, church and in your neighborhood who are like minded and keen to save and make some money.
Once you have a team, decide on how much you want to save every month or week. Plan what you want to achieve and designate officials like the treasurer, secretary , chairman etc . And start saving.
So go form or join a Chama!
This post was written by Martin Njuguna
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