Otieno had been talking about it for a year: ten riders at the same stage in Kisumu, each spending KES 100 a day on things none of them could remember. One rainy afternoon, with no customers, they finally sat down and agreed to start. Three months later their contributions came to KES 78,000 and nobody had argued about a single shilling.
Learning how to start a chama in Kenya takes no office, no lawyer and no big amount. You need a purpose, a few reliable people and rules written down before the money moves. The steps below take you from the first conversation to a working group, in the order that saves you trouble later. Otieno's group followed them in that order, and their first 90 days are set out at the end.
Step 1: Agree on one clear purpose
Every lasting chama can say why it exists in one sentence. "We save so each of us has school fees by January." "We pool money to buy a plot together." "We each want a lump sum for stock once a quarter." The purpose decides almost every rule that follows, from how often you pay to when money can leave the group.
Write the purpose down at the very first conversation, even on a piece of paper. People join chamas with different hopes, and a written purpose shows early whether those hopes fit. If half the group wants a quick rotating payout and the other half wants to buy land in five years, it is better to form two groups than one unhappy one. Otieno's riders wrote theirs in one line: money for bike repairs and spare parts without selling the bike.
Starting is only the first part of the job. A clear purpose gets a group started, but it takes steady habits to keep it going past the first year. This guide stays with the start: the purpose, the people, the first meeting and the first months. Once you are up and running, our complete guide on how to run a chama covers officials, meetings, money rules and share out in detail.
Step 2: Gather the first members
Start with people you already see often: colleagues, neighbours, members of your church or riders at your stage. You want people who keep small promises, because a chama is a long chain of small promises: the Saturday payment, the meeting at six, the phone answered when the treasurer calls.
Five to fifteen founding members is a comfortable size. It is enough to build a useful pot, and small enough that everyone can speak at a meeting. Otieno's ten riders sat comfortably in the middle of that range. You can always add members later once the rules are tested.
Before you invite anyone, agree on two things with your closest one or two fellow founders: the purpose, and a rough contribution amount. Inviting people to "a chama" with no details attracts the wrong crowd. Inviting them to "a group saving KES 600 a week for stock money" attracts the right one.
Step 3: Hold the founding meeting
The founding meeting turns a conversation into a group. It is the first time everyone hears the same plan at the same moment, so nothing should be left to memory. Otieno's group held theirs at the stage itself, in the first week. Keep it to about an hour and follow a simple agenda:
- Read out the purpose and confirm everyone agrees with it.
- Agree on the name of the group.
- Elect a chairperson, a treasurer and a secretary, and agree how long they serve.
- Agree on the contribution amount, the due date and the fine for lateness.
- Agree who will draft the constitution and when the group will review it.
- Agree where the money will be kept until the constitution is accepted.
- Record who attended and what was decided.
The secretary writes the minutes and shares them within a day. In Otieno's group, that job went to Wekesa. Shared minutes mean nobody has to rely on memory when a question comes up a month later. If you later register the group, the minutes of the meeting where you agreed to register and elected officials are one of the documents you will need, so keep them safe from day one.
Step 4: Set contributions and write the constitution
Choose an amount every member can pay even in a bad month. A contribution that works only in good months will produce late payments by the third month. It is easier to raise the amount after six months than to lower it after a crisis. For the Kisumu riders, the answer was KES 100 for each working day, the same amount they had been spending on things none of them could remember.
Match the schedule to how members earn. Riders and traders whose takings come in every day often prefer weekly payments, while salaried members prefer a date just after payday. Write the due date, the late fine and what happens after several missed payments. A member who knows exactly when the money is due can put it aside as the week goes on.
Then write the constitution, the written rules every member signs. It does not need legal language, only clear answers to the questions your group will one day argue about: who can join, how officials change, how money leaves the group, how decisions are made and what a member gets back if they leave. Read it aloud at the second meeting, change what people disagree with, and have every member sign it.
Step 5: Decide where the money lives
Where the money lives is the step most new groups rush, and it is where most trust problems begin. The easiest choice, the treasurer's personal M-Pesa line, is also the riskiest. The money is mixed with personal funds, nobody else can see the balance, and one phone problem or one bad decision can wipe out months of savings. In a group like Otieno's, that would put KES 6,000 a week on one person's line.
Whatever you choose, apply three rules. Every member can see the balance and every transaction. No money leaves without a decision by the group. Records are kept the day money moves, not at the end of the month.
Two kinds of home for the money meet all three rules. A bank account in the group's name with two or three signatories meets them, though many banks ask for registration documents and minutes, so ask your bank what it needs. A group savings app where members vote on payouts is another option. Either way, choose before the first contribution, so the money never spends a week on someone's personal line.
Step 6: Register if you need to
Many chamas never register and run well for years. Registration becomes useful when you want a bank account in the group's name, want to take part in county or government programmes, or plan to own property together. Self help groups register with the Department of Social Development under the State Department for Social Protection, at sub county social development offices or Huduma Centres. Otieno's group has not registered yet, but it has already worked out what registering would cost.
Registration needs a short list of documents, and the rules around it are changing. According to the State Department's website, you will need a name search, minutes of the meeting that agreed to register and elected officials, a signed list of members with positions and phone numbers, copies of IDs, the constitution and a registration fee. Kenya's Community Groups Registration Act of 2022 is also changing how community groups register, and a 2026 High Court ruling means it may be amended again. Visit your sub county social development officer first and ask exactly what applies to your group and what it costs today.
Worked example: the first 90 days of a Kisumu boda chama
Otieno's group shows how the numbers build over the first three months. The group has ten members who each agreed to save KES 100 for every working day, six days a week. They pay every Saturday evening, when the week's takings are in hand. The table shows what that adds up to for each rider and for the group:
| Period | Per member | Whole group |
|---|---|---|
| One week (6 days x KES 100) | KES 600 | KES 6,000 |
| First 13 weeks | KES 7,800 | KES 78,000 |
| A full year at the same pace | KES 31,200 | KES 312,000 |
The first three months were not perfect, and that is the useful part. One member fell behind, two clauses of the constitution changed, and the group put off one big decision until it had more experience. Each problem was handled by a rule or a process agreed earlier. Here is how their first three months went:
- Week 1: founding meeting at the stage; Otieno elected chair, Ouma treasurer, Wekesa secretary. Purpose agreed: "money for bike repairs and spare parts without selling the bike."
- Week 2: first contributions; late fine set at KES 50 per week.
- Week 4: constitution read aloud, two clauses changed, all ten signed.
- Week 8: one member missed two Saturdays. The chair spoke to him privately first; he paid the arrears and the KES 100 in fines the following week.
- Week 13: first quarterly review. The members agreed to keep saving and to decide in month six whether to let members draw on the fund for repairs.
The group has also planned for registration. If the group later registers and the fee is still the KES 1,000 that the State Department's site showed when we checked, that would come to KES 100 per member. They plan to set it aside from one Saturday's contributions. Planning a cost before it arrives is the same habit that kept their first 90 days free of arguments.
Starting your chama on Nyanyuka
Nyanyuka is an option for groups that would rather not rely on one person's phone. You can create the chama on Nyanyuka and invite members with a chama link. Each member joins with KES 1,500, saves into their own account by M-Pesa from KES 10, and contributes to the chama from there. Every payout and every change of rules passes by member vote, so the treasurer never carries the group's money alone.
The constitution lives in the app, where each member reads and accepts it, and meetings keep their minutes and attendance alongside the money. Riders and traders without a smartphone can take part by USSD from any phone. So the steps above, from the signed rules to the minutes of every meeting, all have a home in one place. See how Nyanyuka works for a walk through the app.
Go deeper
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Frequently asked questions
How much money do I need to start a chama?
You need no starting capital, only the first contribution from each member. Pick an amount everyone can manage even in a slow month, since you can raise it later. Many groups start with a few hundred shillings a week. Otieno's riders started with KES 600 a week each.
Can I start a chama with only three people?
Yes, you can start with three people, though the pot grows slowly and one missed payment hurts a lot. Most groups find five to fifteen members easier to sustain. Start small if you must, and add members once your rules are tested. Choose the later members as carefully as the first.
Do we need a constitution before the first contribution?
You need the basics in writing before the first contribution, but the full constitution can come a little later. At the founding meeting, agree on the amount, the date, the fine and who holds the money, and record them in the minutes. Otieno's group signed its full constitution in week 4. Money should not move for months on spoken promises alone.
Who should be the treasurer?
Choose someone careful with records, not simply the person with the most money or the strongest voice. More important than the person is the rule that no single official can move money alone. Rotating the role every year or two also helps. A careful treasurer under good rules has nothing to fear from questions.
Ten boda riders at a Kisumu stage turned KES 100 a day into a group fund in three months. These are the steps they followed, from the first conversation to the first payout, and the mistakes they avoided.
Start your chama on Nyanyuka →