Chamas in Kenya today are not just Chamas. These are individuals not only brought together through friendships but now have more values which include common business objectives,support systems and many other socially related matters.

This is a common trend in Kenya today and many financial institutions have tapped this sector to help chamas with management of their finances.

There are numerous benefits that come with joining a chama:

  1. Reducing relative transaction costs and broker fees .
  2. Pooling knowledge - by combining with others, you have a greater chance of finding better places to put your collective funds.
  3. Accesses to new markets - many capital markets have a minimum requirement for new accounts or investments. Through chamas, you will be able to buy more types of investments than you would alone.
  4. Cheaper diversification of risk - related to 1 and 3, you can better afford diversifying your investments. It's cheaper to reduce the risk of losing your money when you can afford to acquire more.
  5. Specialization of management functions - you can save time by assigning roles to each of your friends (i.e. one keeps track of the money, one finds where to invest it, and one performs all of the transactions). You would have to do these tasks yourself otherwise.

The Jamii Bora Bank is one financial institution that has recognized the need to help different investment groups manage their finances through their product Pamoja Investment Group Account to not only  channel their savings as a group but also to help them access a mortgage for investment.

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