OpenIDEO is an open innovation platform. Join our global community to solve big challenges for social good. Sign Up / Login or Learn more

Kenyan Chama

Micro Saving Groups worth $3Billion in Kenya.

Photo of Oliver Brunt
3 1

Written by

This example is an absolutely amazing way communities can pool resources, investments, friendships and spirit to help each other.
A Chama is an informal cooperative society that is normally used to pool and invest savings by people in East Africa, and particularly Kenya. The chama phenomenon is also referred to as "micro-savings groups". "Chama" (also spelled Kyama by certain tribes) is the Kiswahili word for "group" or "body". The chama phenomenon arose out of the idea of harambee, which means "all together", in the late 1980s and 1990s. Originally, chamas tended to be exclusively women's groups, but as chamas started to grow in sophistication and success, men started participating in chamas as well. The chama structure is used throughout Africa, but is particularly popular in Kenya where the word originated. In Kenya there are estimated to be 300,000 chamas managing a total of KSH 300 billion (USD $3.4 billion) in assets.


Join the conversation:

Photo of Joan Cabré Puig

I've been reading further about Chamas and, despite being a very useful and community-based form of association, most of them hit a stonewall for different reasons: lack of legal body, mismanagement, embezzlement, high credit default rate (and little or no means to ensure/enforce repayments) among others.

We should aim to promote integration of charmas into greater networks with higher supervision. I guess that some of the reasons that trigger inefficience of many Charmas are 1. geographical dispersion and 2. lack of financial education. Tech & communications improvement and advances in education (this requires sustained government commitment on a long-term basis).

Photo of Meena Kadri

Thought you might like to heck out this post and join in on the associated conversation, Joan: This is an institutional example based on ROSCAs ( Chama is an example of a ROSCA)

Photo of Oliver Brunt

I agree, there definitely is need for something form of body to help these communities manage their money, however in urban Kenyan communities there is an inherent mistrust of financial services so gaining their trust in someone else would be tricky. A worthy challenge to tackle though.