Table Banking in Kenya: How Chama Fund Support Works

In June the grass near Kawira's home outside Meru dried up, and her two cows needed bought feed or the milk would stop. She did not have KES 24,000. Her chama did, sitting in a fund that eighteen members had been building since January. By June, six months of contributions had built up in that fund, ready for exactly this kind of need.

That is the idea behind table banking in Kenya: a group's savings do not have to sit idle until December. Members can draw on the fund when they need it and return it on a fixed schedule, with a small fee that stays with the group. On Nyanyuka we call this Chama fund support, and the fee is the chama processing fee. Kawira's group has run it for a full year, and its rules and figures are below.

How Chama fund support works

The model is simple, and most groups that use it follow the same steps. Money goes into the fund every month, comes out to a member when the group agrees, and comes back on a fixed schedule. The fee is the only part that changes the size of the fund, and it stays with the members. The six steps look like this:

1. Every member contributes a fixed amount to the chama fund each month.
2. A member who needs money asks the group for support from the fund, stating the amount and purpose.
3. The members approve or decline the request, following the group's written rules.
4. The chama charges a processing fee once, as a percentage of the amount.
5. The member returns the amount plus the fee in equal monthly parts.
6. The fee stays in the fund, so it belongs to all the members, and is shared with everything else at year end.

The name "table banking" comes from groups that used to place the month's contributions on the table at the meeting and hand them out to members who needed them the same day. The method is the same whether the money sits on a table, in a bank account or in an app. What matters is not where the money sits but that the rules are written and the members decide together. Every shilling that leaves must be recorded and must come back on the agreed schedule.

Rules every fund needs

Chama fund support needs more rules than any other type of chama, because money leaves the fund and must come back. A merry go round only passes money from hand to hand, but here the fund has money out with members for months at a time. Each rule below answers a question that would otherwise be argued over when a member is already in need. Write these into your constitution before the first request:

• A limit per member. Many groups cap support at a multiple of what the member has contributed so far, such as twice their savings. This keeps requests in proportion and protects the fund.
• The processing fee. A single percentage charged once on the amount, agreed by vote. It should be modest and the same for everyone.
• The number of equal monthly parts. For example, six. Equal parts make the schedule easy to follow and check.
• Approval. Who decides on requests and how. A vote by members is safest.
• A last month for requests. Support must be fully returned before the year end share out, so the group stops new requests after a set month.
• Late parts. What happens if a member misses a monthly part: a fine, a meeting, and no new support until it is cleared.

Worked example: a Meru dairy group's year

Kawira's group shows the rules working over a full year. The group has eighteen members, each contributing KES 2,000 a month, so the fund grows by KES 36,000 a month. Their rules: support up to twice what the member has contributed so far, a chama processing fee of 3% charged once, return in six equal monthly parts, and no new requests after June so everything is back by December.

Kawira's request fitted inside the limit exactly. After six months, Kawira had contributed KES 12,000, so her limit was KES 24,000. That was the amount she needed for feed, so her request was within the rules. Here are the four requests the group approved that year:

The group gave KES 78,000 in support during the year and collected KES 2,340 in processing fees. Every request was back by December, as the rule on June requests intended. With every member having contributed KES 24,000, the fund held KES 432,000 in contributions. Add the fees and the year end pot is KES 434,340, or KES 24,130 per member at share out, KES 130 more than each contributed.

Where the fee goes

The processing fee is not profit for an official or an outside company. It goes back into the fund and is shared with all members, including the member who paid it. In the Meru example, Kawira paid KES 720 and received KES 130 of the total fees back at share out, like everyone else. Her real cost was the difference, KES 590, which went to the other members of her own group.

Be honest with members about the size of this. The extra at share out depends on how many members use the fund and whether they return it on time. In some years it is a little, in some years nothing, and if a member fails to return support, the whole group can end up with less than it put in. KES 130 each over a year is a small sum, and nobody should join the group expecting the fees to grow their savings.

The real value of Chama fund support is not the fee. It is that Kawira's cows were fed in June, using money her own group had saved, on terms her own group had set. By December the full KES 24,720 was back in the fund. That is help a group can give only because its members saved together first.

When a member falls behind on returning

Missed monthly parts are the main risk in this model. A part missed in one month is easy to recover, while several missed parts can leave a gap the fund feels at share out. The steps below rise gently, so a member has every chance to catch up before the whole group is involved. Handle missed parts early and by the rules:

1. First missed part: a reminder and the agreed fine, with a chance to catch up within the month.
2. Second missed part: the chair meets the member privately to agree a plan to catch up.
3. Continued problems: the matter goes to a members' meeting, and the member cannot request new support until fully cleared.
4. Leaving the group: any support not yet returned is deducted from what the member would receive, as the constitution's leaving clause says.

The cap on each request is your best protection. Because Kawira could take at most twice what she had saved, at least half of her support was matched by her own savings in the fund, which the leaving clause lets the group deduct if she ever stops returning it. In her case, KES 12,000 of the KES 24,000 was covered by her own contributions. Without a cap, a single large request could put far more at risk than the member has ever paid in.

Is Chama fund support right for your group?

Chama fund support works best in groups that already have a track record. Money that leaves the fund for months needs members who have already shown they pay on time. A new group is usually better off starting with simpler saving and adding fund support later. Before switching it on, check that your group can say yes to each of these:

• Members have contributed reliably for at least six months.
• Records are complete and every member can see them.
• The constitution has written rules on limits, the fee, monthly parts and late parts.
• No single official can approve or pay out support alone.

If any answer is no, fix that first. Six more months of reliable saving costs the group nothing and makes the fund safer for everyone. Comparing it with other types of chamas in Kenya can also help the group decide whether this model fits, or whether a simple share out is enough for now. Strong foundations are covered in our guide on how to run a chama.

Chama fund support on Nyanyuka

On Nyanyuka, Chama fund support is available when a chama switches it on. Every payout from the chama is decided by member vote, so no official can release support alone. The chama processing fee is charged once on the amount, the member returns the amount and the fee in equal monthly parts, and the fee stays in the chama fund. Those are the same terms Kawira's group wrote into its constitution.

Members can follow the fund from the first request to the year end share out. Members see the chama's statements and records throughout the year. At year end, the share out divides the pot, less anything members vote to keep, by what each member contributed. Fees collected during the year are part of that pot, just as they were in Meru.

Part of: Types of Chamas in Kenya and How Each One Works

Frequently asked questions

How much can a member take from the chama fund?

That depends on your group's rules, which should set a clear limit for each member. Many groups set the limit at a multiple of what the member has already contributed, such as twice their savings. Kawira's group used that rule, so her KES 12,000 in savings gave her a limit of KES 24,000. A clear limit protects the fund and keeps requests fair.

What is a fair chama processing fee?

A fair fee is modest, the same for everyone and decided by member vote. It is charged once on the amount, not every month. Kawira's group chose 3%, which came to KES 720 on her KES 24,000. Since the fee stays in the fund and is shared, members are paying it to their own group.

Can a member take support twice in one year?

Only if your rules allow it, and usually only after the first amount is fully returned. Many groups also give priority to members who have not yet used the fund. Write the rule down so it is applied the same way to everyone. A clear rule stops the fund from serving the same few members while others wait.

What happens if the fund runs low?

Approve requests in the order they arrive, within the money available, or pause new requests until monthly parts come back in. Never let one request use most of the fund. A limit for each member makes this rare. Monthly contributions and returned parts also refill the fund steadily while the pause lasts.