Bank’s chama awards to showcase power of group investments

The search for Kenya’s top investment groups popularly known as chamas is on following the launch of a competition to profile the successes of investment clubs.

Rafiki Microfinance Bank has invited chamas across the region to participate in the inaugural East Africa Chama Awards meant to showcase the power of group investments.

The business competition – styled along the Top 100 mid-sized companies’ survey – seeks to identify Kenya’s fastest growing chamas and highlight some of the country’s most successful investment club entrepreneurship stories.

The top-tier micro-financier argues that chamas have evolved into powerful investment vehicles that can be tapped into for capital financing for SMEs, cheap deposits for banks and lending to governments.

“The focus of the awards will be to highlight the evolution of investment groups and recognise the role these groups play in the mobilisation of resources and national development,” said Daniel Mavindu, chief executive of Rafiki Microfinance Bank.

“Chamas have made great strides in savings mobilisations and have transformed into financial machines that drive our economy,” said Mr Mavindu.

Rafiki estimates that one in every three Kenyan adults is a member of an investment club, giving rise to more than 300,000 groups.

Kenya’s vibrant and dynamic chama movement is estimated to control assets worth about Sh300 billion, equivalent to 6.3 per cent of the recently-rebased gross domestic product.

Mr Mavindu revealed that Rafiki serves over 8,000 chamas in Kenya through its 18 branches countrywide. A growing number of banks in Kenya have tailor-made products targeting chamas and sweeten the bargains with offerings of training and investment advisory services.

Rafiki has Chama Supreme Banking for investment groups; and the market has rival products such as Faulu’s chama account, chama savings account from Bank of Africa, Co-op Bank’s mshiriki account for groups, tuungane account (KCB Bank) and vuna chama account from Consolidated Bank.

Family Bank offers chama investment account and there is super chama account (National Bank), ufanisi chama account (First Community Bank) and K-Rep Bank’s chama biashara.

“Chamas have become a leading change agent in youth development by facilitating wealth creation and generating employment opportunities,” Rafiki said in a statement.

Chamas from across the East African Community (EAC) —Kenya, Uganda, Tanzania, Rwanda and Burundi — as well as South Sudan are eligible to take part in the competition.

The pioneer East Africa Chama Award will also honour investment groups which show excellence in diversification of portfolio, highest member contribution, fastest growing club, most innovative as well as focus on social responsibility.

The overall winning chama of the year will receive a cash prize of Sh1 million and an acre of prime land.

The chama awards are also supported by Nation Media Group’s Business Daily, Britam, Safaricom and Gateway Success Consultancy.

Rafiki’s affiliated companies including Chase Bank, Genghis Capital and Orchid Capital are also supporting the initiative.

Some of Kenya’s most successful chamas include listed investment firm Transcentury which was founded by a group of 29 entrepreneurs who raised Sh24 million.

Transcentury went on to list on the Nairobi bourse in 2011 and currently has a market capitalisation of Sh5.5 billion.

Another group that has been successful is that of businessman Charles Kibiru and his friends who started Thika Greens, an upcoming Sh55 billion high-end golf estate in Thika.

Critical Mass Growth (CMG), a chama that dates back to 1996 and started with 33 members, owns prime properties including Norwich Union House along Mama Ngina Street in Nairobi, Libra House on Mombasa Road, Ratna Apartments in Lavington and Southern Credit House.

Home Afrika, a real estate firm listed on the NSE, also started off as a chama with 128 investors. Some of the company’s proejcts and assets include Migaa Golf and Country Club, an exclusive gated community with an 18-hole golf course, Kikwetu in Machakos, Lakeview in Kisumu and Longonot Gate, a holiday home at the foothills of Mt Longonot.

Fountain Enterprise Programme (FEP Holdings) is another example of a chama success story. It was founded by John Kithaka, an architect, together with his seven friends.

FEP’s current portfolio includes MobiKash mobile money platform, Citadelle Security, Fountain Credit Services, Fountain School-Tigoni and Fountain School Mwea, Fountain TV and Newspaper, real estate - Kisima Gardens, Kisima Park in Lukenya and Mill Gardens on the Kiambu-Kamiti road, hospitality - Hotel Suntec Sagana and Suntec Supermarkets in Kitui, Narok and Kapenguria.