Beyond table banking – the chama phenomenon

Maybe you have a really amazing business idea but there is just one hitch; you don’t have sufficient capital to make your idea a reality. Lack of capital is a real challenge facing many who would wish to go into business. Some end up setting up small hustles that might not give them the sort of returns they are looking for or they close down their startups prematurely because they run out of funds.


Benefits of Chama

Pooling resources together with other people is a great way to overcome the finance hurdle. This is the philosophy behind the chama or self-help group concept. Coming together with others to form a chama has numerous benefits.

  • Pooling resources together allows for bigger and more viable businesses than when one operates alone
  • Sharing of knowledge, skills and expertise
  • Shared load or burden. You do not have to carry the entire burden alone
  • Reduces fear and stress since you have moral support from other members
  • You have people to bounce your ideas on
The chama concept is not new in Kenya. Many chamas are started as table banking or merry-go-round platforms which is especially popular among women. It means that members of the group meet regularly, make the agreed contributions which is borrowed immediately normally on a rotation basis.

Where do you get the people to form a chama with?

When forming a chama either to save money together, build a business or go into investment, it is very important that you know the people you are partnering with. Do not risk forming a chama with strangers. You could team up with:
  • Colleagues such as if you get retrenched together
  • People you fellowship with and happen to have known one another for some time
  • People you have lived in the same neighborhood with for some time
  • You could be doing business together such as selling in the same market or doing boda boda or taxi business in the same locality
  • Family members
  • Parents in the same school
  • Old boys or old girls of a school or college
It is important that you know one another beyond being just acquaintances. You might have overcome some challenges together, stood with each other during challenging times or supported one another in some way. The more you know about each other, the better.

The failure rate among chamas is normally high, which makes those who would like to go that route to be fearful. How can a group of people form a successful chama that serves them long term?


  1. Ensure that you know one another. Avoid bringing in strangers unless they are properly vetted. To be able to work together long term, you need not only to know one another but to also get along.
  2. Have some rules about the kind of people who are welcome to the group such as the requirement that every member must have a source of income. That is the only way you can be sure that the members’ contributions will be consistent. You may also have a rule that every member must have professional skills and limit each profession to one member, to minimize competition.
  3. Clarify your agenda from the beginning and set clear goals. Are you coming together to do table banking, to start a business or to invest maybe in land or houses? Ensure that you are all on the same page in terms of expectations.
  4. Get your chama registered. Do your homework well before you choose the type of registration to go for; a trust, a limited company, a partnership, a community-based organization (CBO) or a self-help group. You need to be sure that the registration you choose will not hinder your agenda.
  5. Come up with a very strong constitution or articles of association that will govern the group.
  6. Allocate roles and responsibilities carefully, guided by individuals’ skills and expertise as well as strengths and personality. Avoid overlapping of roles, which can lead to unhealthy competition.
  7. Identify a bank or sacco where you will be saving your money, choose officials who will be authorized with running the bank accounts and put measures in place such as ensuring at least 2 or 3 officials sign before cash is withdrawn and that withdrawals can only been done after the group has met, agreed and minuted that decision. Choose a bank or sacco that gives professional advice to their members.
  8. Hold regular meetings for purposes of getting to know one another well and to bond as well as to plan and also report on the group’s activities.
  9. Work with independent professionals such as an accountant and an auditor, who should not be members of the chama.
  10. Put structures in place. Document each and everything in detail; the processes, the people and the strategies. Don’t leave room for misunderstanding.
  11. Build each other by buying from each other and recommending each others’ services or products to third parties. The more you all grow, the better for the chama.

What kind of businesses can your chama get involved in?

There are diverse businesses that are suitable for chamas. Here are some examples of businesses that are suitable for chamas.

  1. Green house farming
  2. Making briquettes from agricultural waste
  3. Chicken or pork butchery
  4. Courier services or taxi business
  5. Landscaping and flower business
  6. Outside catering
  7. Cleaning services for homes and offices
  8. Laundry and dry cleaning
  9. Flour making
  10. Curios and crafts
  11. Processed foods
  12. Life coaching

What does coaching do for your chama?

* Help you to evaluate your journey so far and set clear long term goals
* Work on a road map to make your long term goals a reality
* Evaluate what has been holding you back and take corrective action. Do you have the right skills and expertise in the chama or do you need to invite some new members who will bring specific skills, expertise and strengths into the chama?

Benefit from weekly or fortnightly coaching now!

Are you already established as a chama? Would you benefit from business coaching as a group? Do you harbor the dream of building a business but you lack the resources or the know how and would benefit from pooling resources with others?

Our coaching program for chamas helps groups of people to come together and build a chama that eliminates the major reasons why most groups fail.If you would like to know how to put together a chama for purposes of growing your income, book a free session here to sample our services and find out if they could be just what you need to transform your life.

Financial Independence Africa

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top