On Saturday evenings, when the Gikomba stalls are packing up, ten traders who sell shoes, bags and second hand clothes meet behind the stall of their chairlady, Mama Nduta, and each sends KES 2,100 into their group. Two years ago most of them had never saved anything regular. Today each of them restocks with a lump sum five times a year and buys bales at a better price than any of them could get alone. The members call their group the Gikomba Ten, and their setup is a good one to copy.
A chama for business owners works differently from a chama of friends or neighbours. Its members share the same rhythm of buying and selling, the same suppliers and the same bad seasons. When it is built around that, it becomes one of the most useful tools a small trader has. The sections below follow the Gikomba Ten from choosing members to sharing out at year end.
Why traders save better together
Saving alone takes discipline that a busy trader rarely has. There is always a reason to spend the money, whether a cheap lot of stock, a family need or a slow week. Each of those reasons feels urgent on the day, and each one quietly empties a private savings tin. A group changes that in four ways:
- Commitment. It is harder to skip a payment when nine people expect it on Saturday.
- Lump sums sooner. A merry go round gives you a big amount long before you could save it alone.
- Buying power. Ten traders buying together can ask a supplier for a price none of them would get alone.
- A safety net. A welfare kitty steps in when a member falls sick or loses stock to a fire.
Choose members who trade like you
The best business chamas are built from people whose money moves in a similar way. A trader who sells daily and one who sells only at harvest will always clash over when to pay. Weekly sellers like the Gikomba Ten can all pay on Saturday, after the week's takings are in. Look for members who:
- Trade in the same market or area, so meetings are easy and you see each other's businesses.
- Have similar cash cycles, such as weekly sales, so a weekly contribution suits everyone.
- Have a record you can see. Someone who has paid their stall rent on time for years is a better bet than a new face with big promises.
- Do not compete head to head. Two traders selling identical goods side by side may find meetings awkward. Mixed stock in the same market works better.
Three jobs a business chama can do
A chama for traders can do one job or several at once. Each job uses a separate fund with its own weekly amount, so the money for one never gets mixed up with another. Keeping them apart also makes the records simpler, because every shilling has a clear purpose. The Gikomba Ten do all three jobs described below.
A merry go round for stock money
A merry go round is the fund that pays for stock. Each member pays the same amount each week, and one member receives the whole pot in turn. The order is agreed by vote at the start of each round. Members with a big buying trip coming up can ask for an earlier turn.
A savings pool with a year end share out
A savings pool builds money over the whole year. Members pay a smaller amount into a pool that stays in the chama all year. At year end, the members vote on how much to keep in the group and share the rest by what each contributed. A member who pays in for more weeks therefore receives a larger share.
A welfare kitty
A welfare kitty is the group's safety net. A small weekly amount goes into a separate fund for members in trouble. A payout to a member in need passes by vote. Because the money is set aside every week, it is already there when a fire or an illness strikes.
The Gikomba Ten: a worked example
The three funds together set each member's weekly payment. Most of it goes to the merry go round, a smaller part to the savings pool and a small amount to welfare. Every member pays the same, which keeps the records simple and the turns fair. Here is what each member pays every Saturday:
| Fund | Per member per week (KES) | Group per week (KES) |
|---|---|---|
| Merry go round | 1,500 | 15,000 |
| Savings pool | 500 | 5,000 |
| Welfare kitty | 100 | 1,000 |
| Total | 2,100 | 21,000 |
With ten members, the merry go round pot of KES 15,000 goes round everyone in ten weeks. In 50 weeks it goes round five times, so each member receives KES 15,000 five times, KES 75,000 in all. Over the same 50 weeks they each pay in KES 75,000. The merry go round does not create money, but it turns small weekly payments into usable stock money.
The savings pool works differently. A member who pays all 52 weeks puts in KES 26,000. Last year nine members paid every week. Baraka kept up his merry go round and welfare payments after a stall fire but paid nothing into the pool for 12 weeks, so the pool held KES 254,000. The members voted to keep 10%, KES 25,400, in the group and share KES 228,600 by contribution.
| Member | Paid into pool (KES) | Share out (KES) |
|---|---|---|
| Each of the nine full members | 26,000 | 23,400 |
| Baraka | 20,000 | 18,000 |
Baraka's share was smaller because he paid in less, and nobody argued, because the rule was written down in advance. The welfare kitty, KES 52,000 over the year, covered part of his loss after the fire, by a vote of the members. His bad year cost him part of his share out, but it did not cost him his place in the group. That kind of fairness is what keeps a chama together after a hard season.
The buying power adds more. When the group buys ten bales of shoes together from one importer, the importer takes KES 1,120 off each KES 14,000 bale. That is KES 11,200 saved across the group on a single trip, money that stays in their stalls. Two such trips a year save each member more than a whole week's contribution.
Set the rules before money moves
Most chamas break up over things nobody discussed at the start. Arguments about late payments, turns and share outs are far easier to settle before anyone's money is at stake. The Gikomba Ten settled Baraka's share in minutes because the rule already existed. Write these down and have every member accept them:
- Contribution day and amount for each fund.
- What happens when someone is late, such as a fixed fine that goes into the pool.
- How turns are ordered, and how a member can swap turns.
- How the share out is calculated, and how much the group keeps.
- How welfare payouts are decided and what they cover.
- What happens when someone leaves mid year, including how their pool savings are returned.
Keep the money out of any single person's hands. When the treasurer can move money alone, even an honest treasurer becomes the focus of suspicion. Every missing shilling then turns into an argument about one person. A rule that every payout needs the members' approval protects the treasurer as much as the group.
Keep the books where everyone can see them
On Nyanyuka, a chama's money moves only by member vote. Members contribute from their own savings, and every payout, welfare release or rule change is decided by vote, so nobody moves money alone. Members read and accept the group's constitution in the app. The chama keeps statements, a spending log with receipts, meeting minutes and attendance, and a year report.
The year end share out works as in the example. The pot, less what members agree to keep, is shared by what each contributed, after a vote. Notices on the chama's notice board also reach members without the app by SMS. The chama works by USSD too, for members on basic phones.
Registering your group
Some business chamas register as self help groups, which can help with opening a group bank account. According to the government's State Department for Social Protection, self help groups register with the Social Development office at sub county level. They need meeting minutes, a signed member list, ID copies, the group constitution and a registration fee. Ask your sub county social development office for the current requirements.
A chama works best as one part of a wider plan. For more on combining a chama with your own savings and Biz support, read how to fund a small business in Kenya. For the wider picture of growing your stall, see how to grow a small business in Kenya. The Gikomba Ten's lump sums are useful because each member already knows what the money is for.
Part of: How to Fund a Small Business in Kenya From Your Own Savings
Frequently asked questions
How much should a business chama contribute each week?
Choose an amount every member can pay even in a slow week, not just in a good one. A missed payment hurts the whole group. It is better to start small and raise the amount by vote once everyone is paying on time. The Gikomba Ten pay KES 2,100 each a week, split across three funds.
Can a chama help me buy stock?
Yes, a merry go round gives each member a lump sum in turn, which many traders use to restock. Members who buy from the same suppliers can also buy together and ask for a better price. The Gikomba Ten each receive KES 15,000 five times a year. Buying bales together also saves them KES 1,120 on each KES 14,000 bale.
What happens if a chama member stops paying?
Your constitution should say this before it happens. Common rules include a fine, a delay of the member's turn, or returning their savings minus any fines if they leave. Writing it down early prevents arguments later. When Baraka paid less into the pool, his smaller share out followed the written rule and nobody argued.
Should our chama be registered?
Registration is a choice, but it can help with opening a group account and gives the group a formal identity. Self help groups register with the Social Development office at sub county level. Ask that office what documents and fees apply today. Keep your minutes, member list and constitution up to date, so you are ready when you apply.
Ten traders at Gikomba market each put KES 2,100 into one chama every Saturday. It gives each of them KES 15,000 five times a year, a better price when they buy bales together, and a welfare kitty for bad days.
Bring your fellow traders into a chama →