Investment groups in Kenya, also known as Chama (Swahili for organized group) have become a popular avenue for investors to grow their worth. Quite often, these groups start small and they depend on members’ input for financial advise and assistance.
In the last few years several banks have designed products specifically targeted for Chama’s. These include tailor made accounts, loan products, financial advise and consultancy.
Some of the banks that have Chama products include;
Bank of Africa – Chama Account
This Chama account comes with among other benefits;
- Zero monthly charges
- Interest paid on deposits at 4.5%.
- No minimum monthly contribution once account is operational.
- Formal groups can borrow up to 3 times the level of their deposits.
- Inclusion of a free current account with free standing orders to the savings account.
- Quarterly Chama clinics.
Some of the requirements :
- Chama would have to be formally registered company for borrowing purposes.
- Need to have saved for 6 months with BOA.
- Scope of loans to be limited to wealth creation activities.
- Loan amounts to be based on the group’s savings – Up to 3 times of savings.
- Minimum lending of Kshs 500,000 and a maximum of Kshs 50,000,000.
- Security to be provided including Directors’ guarantees.
- Group members can co guarantee one another.
The Tuungane Current account enables you to make payments through cheques or access your money on a regular basis to meet your group’s transactional needs.The account features include:
- Zero maintenance fees/ledger fees
- Low opening balance
- Minimum monthly deposit
The Tuunganne Investment account grows monthly contributions through offered interest rates on savings. The account offers you on addition to the ones on current account; Access to loans of up to 90% of the deposit amount in the investment account at base rate.
KCB Bank group’s Mortgage division S&L offers Mortgage and Construction Financing for Chama’s that features
- 90% finance for the purchase of already built houses(residential)
- 80% finance for commercial properties
- Loans to buy or build income generating housing units
- It is available to Registered and Non-registered societies such as ‘chamas’, investment clubs, investment companies, welfare groups/clubs, merry-go-rounds, women and youth groups.
Consolidated Bank – Vuna Chama Account
The product is tailored to suit the needs of investment groups/ ‘chamas’. It targets both incorporated groups and non- incorporated groups and features among others;
- Low minimum opening/ operating balance from as low as Kshs. 2,000
- Attractive interest rates earned on the account
- Access to internet and mobile banking services
- Bank statements provide monthly
- Free financial advice
- Automatic member of the bank’s business club
- Access to investment loans for shares, land, property
- Loan interest as low as 1.5% per month
Family Bank – Chama Investment Account
This product features am0ng others, access to
- Chama Loans up to 3 times the average savings in Chama Investment Account
- Attractive interest rates offered
- Free internal standing orders to the Chama Account
- Access to free Chama workshops every 3 months
- Group Members can co-guarantee one another when borrowing under Chama Investment Account
- Pesa Pap Mobile banking available
The minimum Loan is Kshs 500,000 for Chamas (Chamas looking for loans less than this are advised to open a Jenga Bizna Account to qualify for loans up to Kshs 500,000) with a maximum repayment period of 48 months.
National Bank of Kenya – Super Chama Account
This is a savings account targeting nuclear & extended family members, registered and non-registered groups who want to save with an ultimate objective of borrowing against the same. The product comes with a 5% interest rate tag
More banks in the country have services geared towards these investment groups and depending on formation and needs, one can get the best suited services from these banks. When settling for a group loan or any other services, be sure to check that the services offered will be for the benefit of the group.