Even though investment groups, or what we popularly like to call Chamas, are meant to improve your finances, when not carefully monitored, they can easily leave you in a deep financial hole.

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According to statistics from different financial institutions, Chamas in Kenya collapse within 2 years, or the members become disgruntled because their goals are not being met.

Chamas collapse due to many reasons. Some of these include:

  1. Lack of a Clear Investment Objective
  2. Rushing into Investments
  3. Not Investing Time in the Chama
  4. Lack of rules

Therefore chamas can be dangerous since they can go down at any time. We have seen or heard about these cases many times. And whenever they sink, members end up losing thousands of shillings in the process.

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Also, being a member of too many chamas can affect one’s financial commitments.

As much as these institutions are good, there are people who are known to have so many of them that at the end of the month, they are left with nothing after contributing money to the various chamas.

Your Chama won’t be of value if five years later you could have done those exact same investments yourself. Do the math. 

What is your personal value in the group i.e. the value of your share in the group’s investments?  What is the difference between that and the contribution you have actually made?

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Would you have been at the same level if you had invested the money yourself? Some of you will do this calculation and realize you could have done better alone or maybe even with fewer people.