Turning your Kawaida Chama into a Money Making Machine.

I watched this interview and thought I’d to share it with you.  A chama is a group of people that come together for social reasons which include exchanging money, but this post is for those that want to turn their small social gathering into a money making machine or a wealth creation vehicle. It’s also known as a merry go round, or investment group. 

Set the agenda:
It can be a social or business agenda. Do you want to socialize or make money?
Have a legal structure.
Start it as a company, set up a shareholders agreement this helps separate the individual from the investment. In cases where the company is sued or goes bankrupt, then no individual suffers from it. Don’t have the money collected and distributed back to members but instead use the money to invest.

Have a timeline and an objective (strategic plan).
What do you want to gain from the group? Impressing fellow members IS NOT an objective. What should the money invested do for you?

Have an organisational structure.
Who makes the decisions? Create committees with responsibilities. Let roles and responsibilities be well defined.

Don’t Force members to be equal.
Equality will kill the potential of the group. Don’t restrict others from contributing more and having “more” say to ensure you stay equal. The more money the group has, the more the investment possibilities. You can have a set minimum but don’t set the maximum.

Invest in professional help or services
Don’t use quacks to get business done. Get professionals to handle the business, this can either be members or employ people from outside the team. Treat it like a real business.

Have a constitution and abide by it.
The constitution should stipulate how things should be handled when X happens. How much do new members pay for example? New comers should meet the current value of the group.

Recognize and compensate members who put in more time and work e.g give them more shares.

Choosing what to invest in:

  • What are your expertise?
  • How much time do you have to invest in it?


  • Meetings should be held in professional settings, not in households.
  • Should be as often as possible in the beginning
  • Commitees should meet regularly to fulfil their duties
  • Have an agenda for the meetings
  • Take the meetings seriously. Don’t make attendance optional
  • Never involve personal issues in the meeting. Not as an agenda for the meeting or as a “backbiting” snack

One of the best practice chamas in Kenya is Transcentury and it was mentioned severally in the interview above. Most chamaz today are working towards getting to what Transcentury has become. A short background on Transcentury: It was started in 1997 by a group of 29 Kenyan investors at a worth of 29million shillings in 2001 when they bought the Castle brewery. It is currently worth billions of Kenyan shillings with companies in Kenya, Uganda, Tanzania, Rwanda, South Africa etc. It listed in the Nairobi Stock Exchange in 2012.

So what did Transcentury do to make sure their Chama became a money minting machine?

Tips from Transcentury:

  • Invested money you can’t afford to lose. Don’t use the left overs cause then you aren’t as involved at fighting for it.
  • Had an Action Plan. What do you want to do and when?
  • Cultivated on the expertise in the group
  • Had a management team
  • Had no equality
  • Made zone specific investment
  • Had the legal structure
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