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Michael Kimani @pesa_africa
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How the unbanked Handcart (mkokoteni) pullers of East Africa form chamas to survive and achieve their economic and social aspirations in the informal economy /thread
I came across this Chama group field report on Faisal, a handcart puller from Busia
It was for a different project on trade, so Ive only pulled out the bits about Faisal’s Chama experience /2
Fasial K.....
27 yo

Faisal is a 28 year old male hand cart puller from Kenya from a borderland town, Busia, a town at the border of Kenya and Uganda /3
The borderland is abuzz with economic (biashara) activity. Everything from grains, fish, and fruits and all sorts of manufactured goods flowing from either Uganda or Kenya, transported by bus, boda boda, matatus, and handcarts /4
Faisal is a transporter (handcart puller) serving cross border traders shipping their wares to either side, before they are transported further out into the hinterlands by bus and matatu

He is part of the Borderland Ecosystem /5
Faisal and his mates earn a decent wage at days end, up to 1,500 KES ($15) per day, enough to cater for his day to day expenses, rent, and food . /6
Faisal and his fellow handcart pullers came together to form a handcart chama fund, a shared pot of contributions from all of them. Everyone chips in a set amount of cash, every week or 2 weeks.

It’s up to the group to decide on the frequency /7
They call themselves JP association, and as a group, they have shared aspirations. Most of the members of the association are young and educated up to secondary level /8
From time to time, they come up with ideas on how to grow their trade, such as writing telephone numbers on their handcarts. This way, it is much easier to identify their brand and direct new business to their association /9
All the members of the group commit to save some amount of contribution. Some portion of this money goes into an emergency fund (insurance) while the rest into monthly installments to pay down for their handcarts.

Faisal owns one of 15 handcarts /10
At the end of every month, Faisal can choose to take out some of this money, a maximum of 800 KES to cater for emergencies.

So their monthly contribution is partly a group savings, partly buying shares in the JP, and partly as insurance for the unexpected /11
Living and working in the informal economy comes with the burden of uncertainty. Faisal says on some days business is low and over the course of the year, business has its peaks and lows /12
Having an emergency fund he can tap into on a rainy day cushions hims against volatility of cash flows over time /13
JP Association uses manual spring paper files for record keeping, 2 books for double entry.

Every members also has their own personal books with matching entries.

One book for every member
One for the secretary
And one for the group
Everyday after work, they will hover around the secretary’s table and match the records across all three ledgers. This meeting requires a quorum majority so that at the end of it, everyone has a matching pair of records and the process is transparent /16
There is no limit to the number of chama groups one can join, because often, each group will serve a special purpose and cater to a social circle.

So this is not the only chama Faisal is part of /17
I came across 7 types of chamas

Merry Go round
Investment Club
Causes /18
Faisal is currently a member of 4 chamas.

2 chamas are from his neighbourhood where he lives around other traders and service men/women at the borderland /19
They make contributions on Thursday, 100 kes into a pot. This group is a merry go round group of about 6 - 10 people. Their regular contribution goes into a pot that is aggregated weekly and one lucky member gets to walk away with the pot every week /19
They make contributions on Thursday, 100 into a pot. This group is a merry go round group of about 6 - 10 people. Their regular contribution goes into a pot that is aggregated weekly and one lucky member gets to walk away with the pot every week./20
Each member has a go until everyone has their turn at the pot of funds, hence the aptly named merry go round.

1000 is handed every week to one person /21
Faisal's 3rd chama meets on Monday and contributes 100 per person per week. They have a total of 16 members, also from this borderland community /22
Faisal's 4th chama is a different blend of chama where the contributions are for a specific purpose.

This one has 22 people and the chama is for buying foodstuffs for each other /23
The contribution for this chama is not too overbearing, about 50 KES per week handed to the chairman with total contributions from 22 people

The members know each other well enough to visit each other once i while /24
The pot of funds is then used to buy a gift or foodstuffs on wholesale for one of the members.

So instead of handing cash, they bring you a bale of floor and sugar /25
This is a true story documented as part of a project

Borderland Biashara: Mapping the cross border, national and regional trade in the East African informal economy

report >>… /26
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