Chamas with wealth and influence

Chamas, Kenyan colloquialism for investment groups, have been, for the longest time, a sure
path
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Members of Mapato Group. PHOTO | COURTESY

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Chamas, Kenyan colloquialism for investment groups, have been, for the longest time, a sure
path to financial freedom. While a good many of them fizzle out before making any substantial
gains, several others grow to become financial institutions of power, influence, and wealth.
Many of these investment groups are helmed and populated mostly by men, and many womens
chamas restrict themselves to merry-go-round activities. However, more womens groups are
starting to go big, pooling their money to reap substantial profit.
Saturday Magazine spoke to three such womens investment groups. These groups illustrate the
financial strides women can achieve and also celebrate their strength as women.
MILELE ALLIANCE
If ever there was a poster child for sound investment, Milele Alliance would be it. The eightmember investment company started with 10 members in November 2007 has an
investment portfolio worth Sh35 million. Rose Mbanya, a director of Milele, shared its history.
The 10 founders of the group came from diverse backgrounds, on a who-knows-who basis. It
mattered not their age or professions. What mattered was their shared goal: To collect their
resources to achieve financial independence.
For eight months, the group met every third Saturday of the month, with the agenda to align its
members synergies and to lay its foundation. They contributed a minimum of Sh30,000 every
month.
They also agreed on objectives, rules and a constitution, its banking, accounting and auditing
partner, and its legal adviser. Members committed to the groups mandate by signing it.

In August 2008 the group registered Milele Alliance as a limited liability company. The money
collected thus far became its share capital. Its first investment was the purchase of two parcels of
land 1.25 acres in Juja and two acres in Elementaita.
Member contributions were sufficient to finance the investment. To date, the land has been held
in its books for speculative and collateral purposes.
Next, and in line with its five-year strategic plan, Milele focused its resources on one incomegenerating activity: The purchase and letting of residential property in Thika and Mlolongo. The
finances came through member contributions and a mortgage from our banking partner, says
Rose. So far the mortgage has a small balance remaining.
The second five-year plan started in August 2013. It has focused on a car-cleaning service
located in Mountain View. A manager on site oversees its operations. Mileles plan is to automate
the service. To spread its risk, Milele has also invested in the stock market.
So what factors have contributed to Mileles longevity and financial success? First, we engage
professional services. Accountants and auditors maintain our books. And before we make any
investment, our lawyers conducts due diligence. Professionals also give us an objective opinion
of the state of our affairs, says Rose. Milele has also employed a full-time investment manager
for its portfolio.
Second, Mileles rules are clear on how to handle matters. The two members who exited the
group in August 2012 left without acrimony. Accurate records allowed us to settle their
entitlement, plus extra. Rose illustrates. These Milele rules also explain why the group has
escaped the pitfalls that many a womens group fall into, like personal conflicts and whimsical
decision-making.
Lastly, Milele does not view itself as a chama. Milele views itself an investment company.
Planning for the next five-year investment cycle is underway, a process the group takes seriously.
As women, how has Milele changed the lives of its members? The investment company has
taught us a lot about having a powerful vision and being confident to execute it in a professional
manner while working with and learning from the correct professionals.
On a personal level, we have bonded as investors and enjoyed seeing our company grow from
strength to strength. More importantly, we have remained friends and can still challenge each
other in the best interest of the company. Milele is something we are proud to have built, Rose
says.
MAPATO GROUP
Mapato Group is four years old and has defied the challenges of its size to make substantial
financial strides. So, where did this group of (now) 17 women begin?

The idea for a chama was first conceived as a merry-go-round for six women in our social
circles, says Janet*, a board member who declined to have her identity revealed. After four
months, the women realised that the merry-go-round was not working for them. They decide to
recruit friends working women in their 30s to join as members. The idea was to pool their
resources and invest.
The group of 20 members, three of whom live in the diaspora, congregated for its first meeting in
March 2010 and registered with the Ministry of Gender, Children and Social Services as a
womens group.
As it considered its investment options, Mapato elected its office bearers, documented its
constitution, and started making monthly contributions of Sh5,000 (later upped to Sh7,500) and
an annual subscription of Sh2,000.
Its monthly meetings involved team-building activities for members to bond and talks from
investment professionals and managers for inspiration and to educate them on investments and
internal management structures.
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Mapatos first investment was the money market fund in July 2011. Later that year, the group
purchased shares in the Kenya Association of Investment Groups, through its Amalgamated
Chama Limited. In November 2012, the group purchased four acres of land in Kagundo. Its last
investment was the purchase of shares in Safaricom Sacco, in July 2013.
The groups total investment currently stands at Sh4 million.
Mapatos progress was steady until the challenges it is now battling put a pause to it.
What are some of these challenges? According to Janet, its size is a huge stumbling block. We
started with 20 members. Early on, the professionals we invited to speak warned us our number
was unmanageable, that members would fall off the wagon as we progressed. That happened.
The group started to shrink when some members failed to make their monthly contributions on
time or to make them at all. Having a constitution in place and a valuation of the shares worked
in the groups favour as it was clear on how exiting members would transfer their shares. Three
members exited the group without severing ties.
Other members failed to participate in group responsibilities like bookkeeping and administrative
duties. Janet says such inactive members were elected into the positions to spur their
participation. Sometimes this spurring worked, other times it did not.
Divergent views on how to finance its investments also challenged the group. Most of the
members voted against bank loans, others supported sacco loans. Capital calls were made to
boost the cash reserves. Not all members welcomed this decision, however some thought the

calls too short a notice, others felt it too great a financial strain. Yet some members gave way
above the set minimum.
Due to these challenges, Mapato has been dormant since December 2013. Janet says the group
will meet end of March to deliberate on what to do next. She is hopeful that everything is not
lost. She says, This is a fantastic group of women, focused and committed to what they are
doing.
Given its success in the past three years, it is almost certain that the women of Mapato have it in
them to overcome these challenges and strive towards their goal of financial empowerment.
AWESOME
The group calls itself Awesome. Misnomer or not, this investment group has changed the lives of
its members in its three years of steady growth.
Awesome started off as a group of friends from the University of Nairobi. A year out of campus,
in 2008, the women, like most friends do, considered contributing money to invest.
This idea stewed for another two-and-a-half years. Then in August 2011, the eight women made
Awesome official by starting monthly contributions of Sh2,000. The motivation behind
contributing was not to invest in land and property only but primarily to invest in each
other.
And judging from their mood and conversation during the interview, it is evident that they have
achieved this goal: These newly-weds and young mothers have tagged their babies and toddlers
along for their monthly meeting at a picnic site in Tigoni.
Awesomes first investment was in March 2012, and it was the purchase of a one-year
government bond at Sh100,000. The favourable market that year gave the chama a return of
Sh16,000.
While the bond matured, the chama shifted its focus to the short-term cash needs of its members
and started lending loans. The loans are at a simple interest rate of 12 per cent, with a repayment
period of six months. The minimum lending amount is Sh50,000. The cap is based on the
availability of funds.
To date, the group has made just under Sh150,000 from interest on loans only.
Members share the chamas roles: The treasurer maintains its books. A secretary documents
meeting minutes. Since Awesomes constitution is not documented, these minutes are tooled for
its decision-making. The investment adviser, a research analyst by profession, steers its
investment decisions.

What does it attribute its growing success to? First, it is the consistency in members making
their contributions, says Bianca Oyula, the treasurer. Individually, Sh2,000 (now Sh3,500) may
not seem much. But collectively, it is substantial for an investment.
Also, the priority and discipline of members making contributions and attending meetings.
Last, it is how the chama has uplifted its members. Through its loan facilities, members have
financed their dreams and personal projects without seeking costly bank loans. This has been the
greatest measure of success for the group so far.
Being an all-women group and friends one cannot help asking whether there have been
any personal conflicts that have arisen out of these? Yes, they have, says Wanjiku Muchiri, the
chairlady. But we have learnt to accept each others personalities. We are friends first and we
want this chama to last a lifetime. We need each other for that.
Plans for the future? To register the group as a company and to grow our asset portfolio, says
Joy D Souza, the investments adviser. Our agenda for this months meeting is to discuss an
investment in the stock market. Most importantly, to continue to invest in each other. Not only
in financing its members ambitions, but also be there to hold each others hands through life.

Posted Saturday, March 8, 2014 | by- FLORENCE BETT | Daily Nation