Chama that keeps friends in touch

By Lizz Ntonjira

When a group of friends realised they were coming of age and going their own way through marriage, setting up families and involving jobs, they decided to form an investment group, or chama as they are popularly referred to, that would fortify their friendship.

The idea took shape during Philister’s (one of the friends) wedding and Msingi Wetu Enterprises was born.

Initially, the chama was meant to routinely get the friends together to keep in touch but it has since grown into a legally recognised body.

How long has it been since setting up the chama?

It has been eight years and we are still going strong. At the beginning, the idea of the chama was to meet and chat on lazy afternoons. After about a year, we decided to get into business ventures and investment plans together.

To do this, we discovered we needed to register our chama. After that we opened a bank account and started research on viable investment options including which companies to buy shares.

Was it easy to make decisions as a group on where to invest your funds?

It wasn’t easy because a chama is made up of individuals who all have their own opinions, and we are ten in total. Nowadays, we never invest in anything until every member approves. There are times we just agree to disagree and choose to revisit a topic later on.

Thus far, our investment portfolio includes a unit trust at Old Mutual and shares in Kenya Re, Safaricom and KenGen.

How often do you meet as a chama?

We meet once a month and before we get to the giggling and hefty laughters, we review the treasurer’s report, get updates on contributions, assess the performance of our investments and tackle any other issues.

How much does each member contribute?

Each member contributes Sh5,500 per month of which Sh4,000 is deposited to the chama account. The host of that month’s meeting gets Sh1,000 while the balance of Sh500 is put in the benevolent fund we set up for emergencies.

When a member is organising a wedding, a birthday or has been blessed with a child, we contribute a further Sh1,000. Where a member has been bereaved and has lost a spouse or a child, then each member contributes Sh5,000. If a member loses a sibling we contribute Sh1,000 each.

How do you ensure everyone meets their deadlines for submitting their contributions?

We all have a stake in the chama so it is up to us to make it a success. Everyone understands their responsiblity and are commited to the chama.

Do you have laid down rules and regulations that govern your operations as a chama?

We have a Constitution that lays down our objectives, guidelines and the role of each member. To maintain smooth operations, each year we elect a chairlady, secretary and treasurer.

How does the chama help each individual to grow?

A member can take a loan from the chama at an interest rate of two per cent. The amount one can borrow is guarded by their shares. If you want to borrow more than that, you must guarantee the loan, which you then pay at your convenience without pressure. If a member has a loan and loses her job along the way, the two per cent interest rate is waived.

What is your greatest challenge as a group?

We have not had serious challenges yet. However, there are times when a member may be going through a hard time and, although we are willing to help, the member may not be ready to share the problem.

What do you enjoy most about your chama?

We are always there for each other. We take trips and have periodic parties to strengthen our friendship. In 2008, for instance, we went to Tanzania on holiday. Last year we went to Mombasa. We haven’t quite figured out where we want to head this year!

Do you engage in community projects?

Yes we do. Last year we visited St Elizabeth’s School in Mukuru slums and donated sanitary towels and inner wear to the girls. We also gave a motivational talk to the Class Seven and Eight pupils.

What is your advice to women who would like to run a successful chama?

They must avoid petty disputes and be committed to their goals and aspirations.