Many people often shy away from the informal types of Chama for fear that they will fail or some members may drop out in case of a merry go round chama, before the round is done. However, it is good to note that a Chama can be customized and made to follow different rules depending on the members’ needs and financial standings.

The following are the types of Chama we have:

1)    Merry go round:

In these, the members agree to contribute a fixed amount at each meeting for a fixed period. These collected funds are then given to a particular member, till all the members get a turn, and if the members so choose, a new cycle begins.

2)    Welfare Chama:

These chamas are all about providing assistance and support to a member in times of death, a crisis, or an emergency. Members pool together to offer both financial and emotional support to the affected member.

3)    Social Chama:

Some chamas just bring people together not for financial gain or support, but for pure bliss and entertainment. In these social chamas, people can come together for a shared hobby, such as a sport, or crafts. Others have food chamas.

4)    Peer to Peer lending Chama:

P2P lending chama apps are designed to facilitate borrowing and lending activities among members. They introduce a more dynamic system to the traditional merry-go-round chama. Here, members who guarantee loans are paid interest immediately upon the repayment of those loans, providing faster returns and encouraging active participation.

5)    Investment Chama:

These types of Chamas are accumulating savings and credit associations, over a long-term period. They are known to invest in transportation (taxis, matatus, buses), land, rental housing units, agricultural enterprises, as well as stocks, bonds and other financial products.

6)    Cooperatives:

Agricultural cooperatives in Kenya began forming with the British settlers under the Cooperative Societies Act, particularly for the large scale production and export of coffee, tea, and local consumption of dairy. After Kenyan independence in 1963, agricultural cooperatives continued to grow with Kenyan shareholders and leadership.

Essentially, chamas are diverse and can be customized fit whichever needs and desires your group has. The basis of a chama is a group of people who share similar social interests and a desire to learn more about investing. These are people who come together and pool funds that are used in different ways; or even pool together other commodities for another intended purpose.