The call came on a Tuesday night: Chepkoech's mother had died in Bomet, and the funeral would need money she did not have. By Thursday, her chama in Kericho had voted and sent KES 10,000 from its welfare kitty, and eleven members had travelled to the burial. None of that would have happened so quickly without rules agreed years earlier.
A chama welfare fund is the part of a group that has nothing to do with growing money and everything to do with belonging. It collects small, regular contributions and pays out when a member faces a funeral, a hospital stay or another hard moment. The money matters, but so does the message it sends: that the group stands with a member when life goes wrong. Done well, it is the reason members stay in a group for decades.
What a welfare fund is for
A welfare fund, often called a welfare kitty, is a pool kept separate from members' savings. Its purpose is support, not saving, so members do not expect to get their welfare contributions back. It works like a small insurance arrangement among people who know each other. Each member pays a little every month so that any one of them can receive a larger sum in a bad week.
Most welfare funds cover a short list of events rather than every kind of hardship. The list is agreed when the fund is set up and written into the constitution. Members then know what the fund will do before they ever need it. Many welfare funds cover these events:
- Death of a member, or of a member's spouse, child or parent.
- Hospital admission of a member or close family member.
- Sometimes other events the group agrees on, such as a fire, a wedding or a new baby.
The narrower and clearer the list, the easier it is to run fairly. A fund that tries to cover everything soon runs dry or turns into arguments about what counts. Every request outside a clear list forces the group to judge one member's hardship against another's. A short list removes that judgement and leaves only the question of whether the event happened.
Setting the contribution and the benefits
The contribution comes first, and the benefits follow from it. Start with what members can comfortably add on top of their main contribution, often between KES 100 and KES 500 a month. Then set benefits the fund can afford. A fund that collects KES 5,000 a month cannot promise KES 50,000 for every funeral.
Chepkoech's group of 25 members pays KES 200 a month each into welfare, alongside their main savings. That brings in KES 5,000 a month and KES 60,000 a year, which costs each member KES 2,400 a year. Each member's share is small, but together the 25 contributions add up to enough for a real emergency. They set these benefits:
| Event | Benefit |
|---|---|
| Death of a member, spouse or child | KES 15,000 |
| Death of a member's parent | KES 10,000 |
| Hospital admission of a member (once a year) | KES 5,000 |
Write the list into your constitution, with the amounts. When a member is grieving, nobody should need to negotiate. Fixed amounts also make the fund predictable, because the treasurer knows the most a single event can cost. In Kericho, the largest single payout is KES 15,000, which equals three months of welfare contributions from the whole group.
Worked example: a Kericho group's welfare year
The Kericho fund had a hard year, and the rules held. Two members lost family and three members spent time in hospital. Each case was paid at the amount the list set, with no debate about how much. Here is how the fund was used over one year:
| Event | Paid out |
|---|---|
| Death of Chepkoech's mother | 10,000 |
| Death of a member's child | 15,000 |
| Three members admitted to hospital, KES 5,000 each | 15,000 |
| Total paid out | 40,000 |
The fund ended the year with money to spare. It took in KES 60,000 and paid out KES 40,000, leaving KES 20,000 to carry into the next year. Every payout was approved by a vote of members, recorded in the minutes, and sent to the member's own phone, with the M-Pesa message kept as proof. Chepkoech's KES 10,000 left on the Thursday, two days after her call.
The carried balance matters. A year with two funerals in the same month could otherwise empty the kitty. Two of the largest payouts in one month would cost KES 30,000, half of a full year's contributions. With KES 20,000 already in hand, plus the next year's KES 60,000, the group can face a harder year without changing its promises.
Rules that keep welfare fair
Welfare is where fairness is felt most sharply, because the person asking is often in pain. Clear rules protect everyone from awkward judgement calls. Nobody wants to question a grieving friend's claim, so the questions must be answered before anyone is grieving. Consider including these rules:
- A waiting period for new members, such as three months of contributions before they can claim. This stops people joining only when they know a claim is coming.
- Contributions kept up to date. A member who is behind on welfare contributions is paid only after clearing them, or receives a reduced benefit, as the group decides.
- A clear family list. Name exactly who counts: spouse, children, parents. Decide in advance about in laws and stepchildren.
- Reasonable proof. A burial permit, a hospital note or a word from a fellow member. Keep it respectful and simple.
- Speed. Agree that funeral support is decided within 48 hours, by phone vote if needed.
- One payout per event. If two members are siblings and lose a parent, decide in advance whether both receive the benefit.
These rules can feel cold on paper. In practice, they make the fund warmer, because nobody has to argue while someone is grieving. When Chepkoech's call came, the group did not have to ask whether a parent counts as family or how much to send. The only question left was how fast the money could reach her.
When the kitty runs low
Even good funds can be emptied by a bad run of events. Plan for it before it happens with two simple tools. The first is a floor: a minimum balance, such as KES 15,000, below which the group automatically holds a short meeting.
The second tool is a special top up, a one time contribution from every member when the fund is short. In the Kericho group, a top up of KES 400 from each of the 25 members raises KES 10,000 within days. That is enough for one more parent's funeral at the group's own benefit level. Because the amount and the trigger are agreed in advance, nobody has to argue about it in the middle of a crisis.
If top ups become frequent, the contribution or the benefits need adjusting. Frequent top ups are a sign that the fund promises more than it collects. Review both once a year, at the same time as the share out, and change them by vote with notice. A small rise in the monthly amount is often easier on members than repeated calls for extra money.
More than money: showing up
A welfare fund pays for coffins and hospital bills, but the members who travel to the burial, cook for the family or visit the ward are what people remember. Eleven members of the Kericho group travelled to Bomet for the burial of Chepkoech's mother. That journey said as much as the KES 10,000 did. Many groups add a simple rule that a few members represent the chama at every funeral, with transport paid from the running budget.
This is where a chama becomes more than a savings tool. A member who has been carried through a hard week has a reason to stay that no payout can match. It is also why welfare is part of most of the types of chamas in Kenya, whether the main purpose is a merry go round, a year end share out or Chama fund support. Standing together is at the centre of how to run a chama that members will not want to leave.
The welfare kitty on Nyanyuka
On Nyanyuka, a chama can keep a welfare kitty alongside its main savings. Members pay in, and a payout to a member in need passes by member vote, so the decision is quick, open and recorded. The kitty's activity appears in the chama's statements and records for every member to see. That matches the Kericho rules, where every payout was approved by a vote and recorded.
News and votes reach every member, whatever phone they use. When news has to travel fast, the chama's notice board reaches all members, including those without the app, by SMS. The chama works by USSD too, so members with any phone can take part and nobody is left out. That matters for a welfare decision that should be made within 48 hours.
Part of: Types of Chamas in Kenya and How Each One Works
Frequently asked questions
How much should members contribute to a welfare fund?
Most groups choose an amount between KES 100 and KES 500 a month, on top of the main contribution. Pick an amount everyone can manage, then set benefits the fund can afford. The Kericho group pays KES 200 a month each, which gives a fund of KES 60,000 a year from 25 members. Review both the amount and the benefits once a year.
Are welfare contributions refunded when a member leaves?
Usually not, because welfare works like insurance and the contributions stay in the kitty for the members who remain. A member who leaves has had the protection of the fund for as long as they paid in. Write this clearly in the constitution so it is understood from the start. That way nobody leaves expecting a refund the rules never promised.
Should a welfare fund cover weddings and births?
Some groups include weddings and births, often with smaller amounts than for funerals or illness. Adding happy events can strain a small fund, so add them only once the core cover is well funded. Decide by vote and write it down. Keep the amounts low enough that they never threaten the payouts for deaths and hospital stays.
How quickly should a welfare payout be made?
For funerals, a welfare payout should be made within a day or two, since costs come quickly. Agree that the vote can happen by phone, without waiting for a meeting. Keep the record of the vote with the payout. Chepkoech's group voted and paid within two days of her call.
KES 200 a month from each of 25 members in Kericho paid for two funerals and three hospital stays, and still left KES 20,000 for the next emergency. How to set contributions, benefits and rules that keep a welfare kitty fair.
Protect members with a welfare kitty →