Small Behaviors That Affect the Effectiveness of Your Chama

Malipo Circles

Investment groups or chamas are groupings of individuals with similar interests meant to empower and improve the livelihoods of the members. Kenya has over 300 thousand ‘chamas’, making them reliable financial vehicles for millions of people across the country.

This vast opportunity informed the founding of Malipo Circles by Eric Oyugi.  is a mobile app and service that lets people, friends, families and investment clubs or ‘chamas’ as they are popularly known in Kenya easily lend, borrow, and fundraise money for a myriad of scenarios.

However, most chamas fail within 2 years, or the members become disgruntled because their goals are not being met. So, what are some of the small behaviours that hinder the effectiveness of chamas?

Lack of Transparency

Traditional chamas require members to open ‘chama’ bank account and then hold meetings to collect contributions, then send money to the treasurer to deposit it in the account.

This approach rarely works and can easily lack transparency. Members remain clueless on what is happening until bank statements are seen and at which point they meet again to review the statement together. This is a tedious and time-consuming process for a very simple task of keeping track of contributions and balances.

Malipo Circles, founded by Eric Oyugi simplifies this process by enabling chama to account for all transactions seamlessly and transparently. It provides a better way to do collections, accounts and do summations then transfers the money to the chamas bank account. This saves time by reducing the number of meetings required.


Trust is the only invisible currency that all business and investment thrives on. Most chamas fail because of mistrust among members lack as well as the leadership. Research by Financial Sector Deepening, Kenya showed theft and embezzlement of chamas money stood at 13 percent.

More often than not, the lack of trust is fuelled by the fact that the running of the chama is left to the leaders. For example, all the accounting and record-keeping is handled by the treasurer.  This sometimes leads to lots of disagreements around amounts, interest rates, contributions, etc. These accounting issues are so serious that many chama members end up having fights and even end up breaking up the chama itself.

Malipo Circles reduces these disagreements by automating the financial processes and making them simple enough for every member. This not only lifts a heavy workload off the leaders but also cultivates trust and allows members to focus on other investment issues.

No Rules

Most Chamas have failed due lack of such simple but clear rules as attendance requirements, contributions, and deadlines. For an investment group to succeed, there should exist a guiding framework for all the members as well as the consequences of going against the policies. Without clear guidelines, some members might not give timely contributions or may skip making their contributions which will lead to the death of the group.

Whereas Malipo Circles don’t set the rules for chamas, it makes it easier to enforce them. For instance,  a ‘merry go round’ with respect rule that everyone contributes monthly but only one or more of them can take a loan at a time, Malipo Circles automates the whole process for chamas to do so much more efficiently and transparently. In short, Malipo does not change people’s behavior but gives them an effective way of doing it.


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