Kinuthia, a mtumba trader, dreams of owning not only a posh home but also a number of rental units. From selling second-hand body and footwear, he manages to generate a thousand shillings a day.
He realises it will take him a long time to accumulate the amount required to invest in his real estated ream. He, with other like-minded individuals, decide to form a self-help group (chama) in order to raise capital to buy land and build rental units.
He is now the proud owner of a number of rental units because of his chama. Many people dream of having successful chamas or investment groups like Kinuthia’s but what does it take to achieve this?
Set economic standards
Before the chama is able to invest, the members must contribute and raise capital. This means that each member must have the capacity to contribute the pre-agreed amount at the pre-agreed interval.
For the chama to prosper, the disparity between the highest and lowest earning members of the group should not be too wide. This ensures that your chama is able to maximize revenue collection without making any of the members uncomfortable.
To ensure accountability, your chama should elect officials to manage its functions. The most important seats you should fill include chairperson, secretary and treasurer. Depending on your group’s size, you may also need appoint assistants who will act as proxies in case the primary is unavailable.
For fairness, this responsibility should rotate among members regularly, on a yearly or bi-annual basis.
Invest money collected
It is pointless to just collect money and save where you do not get real returns. In this case, that means a return that is higher than the inflation rate. If you are unsure how to go about this, invite financial and investment experts to train your chama about investments and how to ensure your money will grow.
Firms like Cytonn Investments offer such training for free, for both individuals and chamas.
Support each other
Members should not only thrive as a chama but aim to support each other’s businesses. This will not only ensure that the Chama expands, but that each individual grows as well.
Take the example of Joanna who runs an online cosmetics shop and Diana who owns a boda boda business. They both belong to the same chama. Diana can deliver cosmetics to Joanna’s clients, therefore mutually benefiting each of them.
In conclusion, any chama can be successful as long as each member is disciplined and practices teamwork. Ensuring that every chama member is educated on investment matters will go a long way.