“Chama” is a Kiswahili word with several meanings, depending on the context. On the one hand it can mean a political party on the other a social welfare group. There is plenty of talk about the former and the various shenanigans they are getting up to in the quest for political power so I won’t dwell so much on those. On the other hand, a chama is a welfare group where likeminded people come together to make regular contributions to a common fund that they can all dip into in times of crisis or use as capital to get a business going.
In Kenya the most common investment for these groups is real estate or on the Nairobi Stock Exchange. As with most welfare groups around the world, where these kinds of groups grow they eventually convert into full blown co-operatives or private companies with the contributors becoming shareholders. And in most cases they tend to form around family groups, employees within the same firm or even members of the same church or mosque.
According to most press reports I’ve seen there is about 3.4 billion dollars saved up in Kenya’s 300,000 chamas. Some of Kenya’s biggest private companies, such as Trans-Century group and Amalgamated Chama started out as chamas. According to kariobangi.wordpress.com, the history of these chamas goes back to the 1980s when Kenya’s economy had gone to the dogs as a more secure means of protecting savings. With those days seemingly behind Kenya, these institutions have drawn the attention and encouragement of policymakers as they are far more likely to secure credit from specialized women’s and youth’s enterprise funds. They are seen as the most viable way of economically empowering women and youth in government circles.
Though it has been argued in some circles that the presence of such welfare groups is a sign of stagnation and lack of social mobility, I’m inclined to suggest that these groups are more likely to be a means for making progress in that regard that may be far more effective than older more traditional means of extending credit to potential entrepreneurs and providing a social safety net.
Now off I go to sort out which on the several chamas I’ve been invited to join in the past 2 months I’m going to join.