By the Jalika team
Kenyans pool money in many ways, and the names are often used loosely. Knowing which kind of group you are shapes your rules, your registration and the tools you need.
The short answer
- A welfare group pools money to support members through hardship, most often bereavement. Members do not expect their contributions back.
- A chama pools money to save, lend or invest for the members’ own benefit. Members expect a return.
- A SACCO is a regulated cooperative that takes savings and gives loans on a larger, formal scale.
Side by side
| Welfare group | Chama | SACCO | |
|---|---|---|---|
| Main purpose | Support in hard times | Saving, lending, investing | Savings and credit |
| Do members get contributions back? | Usually not | Yes, as payouts, loans or dividends | Yes, savings are withdrawable |
| Typical size | 20 to a few thousand | 5 to 50 | Hundreds to many thousands |
| Who it is registered with | Registrar of Societies or the county, as a community group | County, as a community group | The cooperatives regulator and, for deposit-taking SACCOs, SASRA |
| Key records | Members, dependants, contributions, claims | Contributions, loans, investments | Accounts, loans, shares, dividends |
Registration rules change, so confirm the current route with the relevant office. See how to start a welfare group for the welfare route.
Many groups are a mix
A chama often keeps a small welfare kitty to support members who lose a loved one. A staff welfare may also run a savings scheme. That is fine, as long as the money for each purpose is recorded separately, with its own rules, so members can see exactly what they paid into and what they can expect.
Which tools fit which group
- Welfare groups need a register of members and dependants, contributions and levies, eligibility rules, bereavement claims and approvals. That is what Jalika’s welfare management system is built for.
- Chamas need contribution tracking, loans, merry-go-round payouts and investments. Jalika supports chamas with welfare features; see Jalika for chamas.
- SACCOs need full core-banking systems, which are regulated and beyond the scope of welfare software.
Questions to ask your members
- Do we expect to get our money back? If yes, you are closer to a chama or SACCO.
- Is the main purpose to support each other through loss or hardship? Then you are a welfare.
- Will we take deposits from the public or give loans at scale? Then talk to the cooperatives regulator about a SACCO.
Put these rules into practice
Jalika keeps your register, contributions, levies and claims in one place, and applies your constitution's rules automatically.