Why you should join a chama

By Sophie Oyugi

Chamas bring people with common interests together. Some are formed for the sake of bonding and social growth while a majority are ment&searchbutton=SEARCH'> invest ment oriented.

A serious ment&searchbutton=SEARCH'> invest ment chama with structure and goals can offer a lot of benefits to its members. Most chamas are registered and are thus a legal partnership or a limited liability company consisting of a certain number of members.

Once your group is legally established, ensure it has a standardised accounting record.

A typical chama requires an equal monthly contribution from each member. In some groups, members don’t contribute the same amount and they have a clear way of determining each member’s shares.

To facilitate chama decisions and member education, a group should schedule regular meetings fortnightly, or at least once a month. Regular meetings are fun and insightful, as members share experiences that boost the group economically and socially.

In some chamas, members have the responsibility of researching potential ment&searchbutton=SEARCH'> invest ment ideas and staying up-to-date on the performance and outlook of their group going forward.

Chama members should actively participate in their group’s activities. There are many steps chamas can take to boost members’ opportunities.

Think long-term

Don’t buy stocks through an ment&searchbutton=SEARCH'> invest ment club if your time horizon is a year or less. A chama, especially one that intends to invest, should always think long term.

Most chamas meet only once a month, making it difficult to make ment&searchbutton=SEARCH'> invest ment decisions for a short term. If you want to join an ment&searchbutton=SEARCH'> invest ment group, look at it as something of a long-term commit ment of about three to five years. Ensure all the group members find that level of time commit ment acceptable.

Most chamas of this nature have strict penalties to deal with members who withdraw at its inception.