The Essence of Chama’s In Society

What Is A Chama?

Chama is the Swahili word for ‘group’. Usually a number of people come together to form self-help groups which are used to help them acquire financial knowledge, save and mentor each other.


Why A Chama?

In most cases, when people get into Chama’s the essence is to normally save, save and save. Afterwards, they come to realize that apart from saving, Chama is also a good place to invest. As a matter of fact, they not only help you save but they also provide a favorable environment to brainstorm and share ideas.


Here are a few advantages of Chama

  1. Save, save and save more
  2. They help raise large amounts of capital you could never think of raising individually
  3. Sharing investment ideas though brainstorming
  4. Ensures effective and efficient management of individual funds
  5. It is a plan to financial freedom. (freedom from the rat race)
  6. Risk sharing. I.e. the risk of loss is spread between group members and you escape baring the whole loss by yourself.
  7. Provide social and moral support from members
  8. Networking etc.

As a matter of fact, if you are a youth in Kenya, It is a requirement before you can lay your hands on the cash from the Uwezo fund.

It is important however, to put in mind that a chama is not all about calling a few friends, forming a group and beginning. A succesful chama just like other institutions have some Do’s and Don’ts.


The Do’s and Don’ts  of chamas

  1. Make sure all your group mates especially those handling finances are trustworthy. This will help avoid having cases where people run away with the money and the group collapses.
  2. Do Not ignore the legal processes! Having your chama registered is important not only for trading but also for future investments e.g. in case of investment in government bonds and debentures and the stock exchange.
  3. You are the newest member of your friend’s chama and when he introduces you to the members, the first thing you are told is to “Grab a beer!”; Ruuun! That is not the right chama. Do not hold meetings in bars
  4. Open an account in the chama’s name and keep the finances there. At home is not a good place for cash.
  5. Avoid gossiping! Not good for Chamas
  6. Appoint a group leader to head the chama (more like legislation). This is essential and while you do, choose somene who with a positive attitude and leadership skills.


In a chama, you have a chance to dream big and handle large projects. Now that you have a few pointers, why not go and join one.


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