SAVINGS: AN AFRICAN WOMAN’S PERSPECTIVE.
On the African continent, money as a currency was introduced in the 18th century. This came about when the missionaries and explorers made their rounds on the continent. In ancient times barter trade, a system of exchange where participants in a transaction directly traded goods or services for other goods or services without using a medium of exchange, such as money was common among Africans. This however changed and within no time different foreign currency was introduced into the different parts of the continent by missionaries and further by the colonial masters. Even with these changes, African women could still not access money as the society she grew up in, caged her in a cultural box, one that dictated her finances and her degree of financial literacy.
The evolution of financially literate African women is one that has been and continues to be fought for since time immemorial. Women had to decipher ways of not only generating income but managing it. One such way was the Chama in East Africa. The Chama is an informal cooperative society that is normally used to pool and invest savings by people in East Africa, and particularly Kenya. The Chama phenomenon arose out of the idea of Harambee, which means “all together”, in the late 1980s and 1990s. Originally, chamas tended to be exclusively women’s groups, but as chamas started to grow in sophistication and success, men started participating in chamas as well. The Chama structure is used throughout Africa but is particularly popular in Kenya where the word originated. In Kenya, there are estimated to be 300,000 chamas managing a total of KSH 300 billion (US$3.4 billion) in assets.
The original chamas were structured as Rotating Savings and Credit Associations (ROSCA), where the members agree to contribute a fixed amount at each meeting for a fixed period such as one year. At each meeting, the funds are collected up and certain members are paid the entirety of the collected money on a rotating schedule. For example, a Chama of twelve women might use this system on a monthly basis and contribute 1000 shillings to each member at each meeting. At each meeting, 12,000 shillings would be collected and paid out to one of the members on the schedule.
Once the money is collected, members present their requests for loans and the money is shared among them. The beauty of this concept is that the interests required when repaying the loan can go as low as 2% which is music to the ear of many borrowers especially those in the informal sector where shylocks charge as high as 30%. You can borrow a short–term or long-term loans l depending on how established your group is and how much money has been collected. In most cases, the loans are given on a first come first serve basis because many members in the group might really want the money at the same time. At the end of each year, bonuses and dividends are shared according to everyone’s shares and amount of loan taken and repaid in full. This is where the aspect of being your own bank comes in since you get back a good portion of the interest you paid in loans meaning you do not lose any money. This is the beauty of the banking loans if you are able to get group members who understand this concept. As a result, the members are able to keep their money safe and gain interest in one go.
Today, traditional forms of savings are being digitized to cater for the modern market. A good example is the Esusu app whose concept is very much like the Chama, which offers digital banking services, for members of the same group. This has not only automated the process but also saved on time and resources that would go into planning for a sit-down. With the app, members of a Chama can efficiently handle their money.