March 08, 2021   by

A Chama is an informal Investment club where individuals contribute a concurred amount of cash with the point of assisting each other with developing and conceivably accomplished monetary and financial independence. Most Chamas at the beginning start as merry-go-rounds where individuals contribute household items. For example, they would contribute foodstuffs, garments, and utensils. However, with time, they change into investment gatherings. Chamas can be utilized to help reasonable improvement in one’s financial situation even in the most far-off territories in Kenya.

The Chama type of distribution is popular as it has a hierarchy of order which ensures all the Chama members are able to grow in harmony. They also have regular meetings which keep track of their finances and investments. The meetings are also a good way to calculate the ROI in a business, discuss whether to include automation in their businesses. During this time, the Chama meetings also act as a great opportunity for members to receive or pay back loans and contribute to their member savings.

In the event that you are thinking about joining a chama, here are the advantages you remain to acquire:

Savings in a Chama


Every investment group prioritizes savings. This is the basic foundation of a Chama. Before investing and investment groups, Chamas have a specific amount of money they require their members to make. In the case of groups such as those that do not need to invest yet, they take part in Merry-go-rounds. These Merry go rounds involve contributions that rotate to members per a specific amount of time. As an individual saving might be difficult as there are always needs that arise. However, when saving as a group it is much easier to ensure each member makes their contributions.

Additionally, as a Chama member, one gets the opportunity to save with a specific bank or Sacco and this gives members the advantage of acquiring an interest. The more the amount of money the higher the interest. Overall, being part of a Chama urges one to be a focused saver and acquire a problem-free saving culture where you can without much of a stretch facilitate your way into contributing.

Chama Membership Expands Investment Knowledge

As discussed earlier, a Chama is a group that takes part in saving and investment activities. Therefore, in such a group there are different types of individuals. Each person has their specialty and these skills may be very useful in such a group. In the Chama meetings, members often socialize and get to share their Chama individuals share their own encounters on their business ventures and help each other discover approaches to improve their current businesses. This gives a great learning experience for Chama members. The groups also share knowledge from the ventures that they are currently a part of and one is able to learn from the way the business runs. Chama’s additionally welcome venture specialists to address their individuals and this thusly improves their monetary abilities. These specialists address issues of concern about investing in different businesses and this creates a learning experience for Chama members.

Chama Meeting: An image of Chama members in a meeting

Chamas have Shared Risks and Responsibilities

Investing is one of the main characteristics found when planninf=g on investing. A Chama’s business enterprise, just like any other requires taking a risk in exchange for making a great profit. One example is when one is venturing into a business alone. The chances are that they might have a higher individual risk. As most Chamas pool money together and invest together all the portions form enough capital to start a venture. Additionally, it is because the investment is done by all members then the risk is shared between them.

Individuals share risks that may emerge when investing in a certain business. This makes it simpler to oversee as it is done in a gathering. For instance, if one was to purchase shares worth 500,000 then they would risk the 500000 alone. However, in a Chama of 50 members who decided to purchase stock worth 5000000, each member would risk 10000. This amount is a lesser amount in comparison to the 500,000.

Chamas Offer Adaptable Loans

Most businesses are formed from loans. It is one of the best ways to get a lump sum amount of cash to start a business. While trying to start a business venture with a Chama, the amount of loan one may get as a part of a group is often higher as the limit increases depending on member savings. For this reason, they may be the best way to save money. Additionally, one may need loans for emergencies and businesses. As an individual, it may be challenging to acquire one from a bank as the rates are high and they have a lot of requirements. For this reason, one may decide to ask for a loan from their Chama.

Therefore, generally, Members look for a loan, especially when that their contributions are not enough to start a business venture. In such scenarios, many Chamas have well disposed of credit arrangements. They also have insignificant loan fees, and they are accommodative in their obligation assortment. This becomes a much better option. Banks have been known to be exceptionally punitive with regard to recuperating cash from defaulters.

Chama Members have a Common Objective and Vision.

A Chama is often set up by people who have the same goal. This is very important in a business and in an investment group. This is because a group cannot progress without a similar vision. Once a group has similar goals it may easily achieve its goals which is fruitful for a business. The gathering inspiration expands individuals’ certainty and they uphold each other to accomplish their investment objectives.

Kinship and Social Bonds between Chama Members

Numerous people that form Chamas have a similar goal. This is because they share and participate in their exercises, their kinship ties develop further. This improves how well the individuals relate with one another. Additionally as members of the same group normally individuals spend a lot of time together. During meetings, members spend time together and share ideas on how to improve the Chama. They also share ideas about their businesses. As a consequence, members have a venue to create a bond and this helps their financial growth and social relations. During fundraisers, and while setting up contributions, members learn more about each other. This is an addition to the good rapport that exists between members. It ensures members make contributions on time and increases productivity.

Chama Management: Chamasoft, an app that helps with financial management

Chamasoft Limited values Chamas. It helps them manage all their Chama operations. this includes helping in financial record keeping. Thus ensuring people put less effort into financial management. In the event that you haven’t joined a Chama at this point, maybe this is the correct opportunity to think about joining. It facilitates your monetary weights. In addition, it ensures you make investments that ensure your financial goals are met.

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This post was written by Cynthia Njoki

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