September 21, 2012   by

The  chama constitution

The constitution is the engine that ensures effective running of an investment group. It lays the foundational understanding upon which other structures and activities are build on. This are set rules of agreement that members must agree on and must be ready to comply with.

Since the purpose of an investment group is to raise finances for purposes of investing it is impetrative to set rules for the transactions and decision making for group activities. The constitution will also protect office bearers or members from potential risk incase the chama runs in financial problems or is dissolved by spreading the risks equally.

The constitution is an important requirement to be presented to registering authorities while banks will demand a copy of the group’s constitution before any financial transaction is allowed.

Key features include name, objective, finances, membership, how to resolve any conflict, and the decision making module.


This can reflect the group’s activities and all members must agree on the name, address and physical location.

Group Objectives

This article needs consultation, thought and consideration. Members must agree and document what activities they intend to undertake, future prospects covering a wide area and giving flexibility to future developments.


Must cover activities that the group is likely to carry out to meet its set objectives. Put future prospect in mind to keep the powers broad. Include how to raise funds, employ staff, buy or rent premises, work in partnership with different groups among other subjects.


Since they own and control the group, it is important to document their role. The members and the interest they represent, how to recruit new ones, fees payable and when, and how to appoint office bearers and for how long and if anything pay is entitled to them. It should also outline why and how a member can be removed from the group or how to deal with errant members.

Management committee

This is the decision making organ of the group. Its composition either elected or nominated depending on their knowledge and skills. Consider how many and the length of time they should be in office. Procedures for removing or replacing a member of the committee should also be considered.


Officer bearers are tasked with carrying out activities on behalf of the group. They may include the chairperson, secretary or treasurer but members should agree on the offices. They should be elected at the annual general meeting or appointed but for a specified period of time. Their powers and responsibilities, terms for their removal should be specified and how the vacancies will be filled.


You must state where and how often you will meet. Ensure you make provisions for general, committee or special general meeting. The minimum number of meetings you can hold, and notice to be given to inform members of a scheduled meeting. The quorum to be present to commence a meet, who is eligible to vote and who can call for a meeting.


Consider where to keep the money (bank) an account which should be under the chama’s name. Record keeping of incomes and expenditures which should be examined for accountability. List the signatories to the bank account about three officials and the positions they hold. If any remuneration is given for time and services, this should be specified. You may also consider their expenses.


Provision for winding up should be outlined as well. Reasons for dissolving the group, how many members may dissolve it and procedure to be used. Outline what will happen to the assets or money, and repayment of debt if any.

Constitution Amendments

Amendments to the constitution- This should cater for any changes. However amendments should be made cumbersome to discourage easy changes. For example an AGM should deliberate and at least two thirds should vote in favour the amendment. You must also give details of how you will arrange special general meetings to discuss potential changes, including information regarding how much notice you will give your members.

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