What are chamas?

Chamas are locally organized groups that meet on regular intervals to contribute funds that are given or loaned to one or more of the members. Chamas are important for economic development, because they provide financial capital to small-scale businesses, that typically do not have access to bank loans. In Kenya, chamas account for a significant part of the country’s economy — approximately 18% of Kenya’s GDP. Additionally, chamas are important for women’s empowerment and social support. Despite their importance, chamas face various challenges ranging from lack of transparency and accountability to loan defaulting. There are few initiatives have focused on designing digital financial systems (DFS) for them to solve these challenges.

SmartChama Platform

SmartChama allows chamas to manage and track their financial transactions (e.g. personal contributions, group balance, and loan repayments) in real time to potentially improve financial accountability and transparency in chamas. Unlike other platforms (e.g. formal banks) where only two chama members have access to group transactions, SmartChama provides access to financial transactions for all group members.

How it works

Feasibility Study

We conducted feasibility study in Kisumu — Kenya’s third largest city. We recruited participants living in two informal settlements in the area: Nyalenda and Obunga. Members of seven chama groups agreed to participate in the study (total of 48 participants: 4 men and 44 women). We first conducted focus groups to understand how chamas are structured and how they work. We used findings from focus group discussions to inform the re-design of SmartChama. After making these changes, we conducted formative to explore the feasibility of using SmartChama.

Formative evaluation findings suggest how SmartChama strengthens financial accountability and transparency in chamas. They also suggest that using SmartChama could improve record keeping as well as remote participation in chamas. Despite internet connection and login usability challenges, participants’ reactions suggested that SmartChama’s design is intuitive as they could easily compare it with other mobile based applications they used.


Participants' Reactions

"This system will end a tendency where some members lie when they don’t have a contribution, or they don’t have money to repay their loan. There is no giving excuses like, I have a funeral and I won't make it to the meeting. Even if you can’t come to the meeting, you can just send the money."


There is transparency because no one can withdraw cash without your knowledge. The system will help us to overcome challenges on transparency and accountability.


There is no way one can get a loan that is more than twice her shares. The system itself will reject the request. You will be seeing all the progress on your phone, even in your absence. Yes, that's what I find interesting.


It is good because there is absolutely no carrying books around. The book is already on the phone, and each one has her account. Sometimes we also lose information when notebooks are lost or torn apart.


It is only the system that does the calculations. It's like it has its brain there. We will not be complaining of any mistakes anymore that are made during manual calculations.


I may fail to attend group meeting because I was committed, so I can deposit money from anywhere. Or let’s say I was really stranded in the countryside and I needed KSH 1000. I can use the system to request a loan. If the group members approve it, I will just find myself having that money. That is the convenience I find with it.