Kenya has over 300 thousand ‘chamas’, making them reliable financial vehicles for millions of people across the country. A popular form of Chamas has been the “Merry Go Round” also known as a Welfare Club.

The way this works, members contribute a pre-determined amount of money regularly. Some chamas contribute weekly, others monthly. Each time money is collected, the full sum is paid out to one of the members until everyone benefits. By participating, members are essentially putting money away until it comes back to them as a larger sum.

Evey time contributions are made, either weekly or monthly, it is the time when the members’ turn it is to receive the pay out. For instance; a monthly collecting chama can set a rule that all the members have to send in their contributions to the treasurer by the 3rd day of every month, and the payout given to the member on the 5th day of the same month.

Some chamas have a penalty rule for late contributions, this late fee often goes into a predetermined invest for the whole group.

To pick out the order for the payout, some chamas either pick numbers from a basket, others go in the order of joining, with the newest members coming in last, and others use alphabetical order and do not accept new members until the cycle for the current participating members is done.

Chamas are usually founded on two basic reasons:

1. The common bond between the members.

2. The financial goal of the group.