5 Best Business Ideas for Chamas in Kenya

People join investment groups or Chamas with one goal in mind which is to save and invest their money. If this was not the case, everyone would be keeping their money in the banks.

When forming Chamas, it is important to decide on the best area of investment that all member will be comfortable with. This means that everyone needs to be involved in the discussion when making this decision on how the collected money will be invested.

Here are some of the lucrative areas in which a Chama can venture in and invest:

• Real Estate

Kenya has witnessed an increase in its population over the years. This increase in population has led to a demand for housing in growing towns and the increase of residential property values. This trend is expected to continue in over the years making real estate among the top profitable ventures for all-time.

No one can ever go wrong with investing in property. Land is a scarce resource, and with the increasing human population, land available for agriculture or homes is shrinking. As an investment option in Kenya, real estate is a very profitable.

Chamas can decide to buy large chunks of land then divide into smaller portions and sell after a year or less. Returns can be as high as 100 percent or much higher within a few years. These portions of land can be sold as undeveloped or developed, depending on the resources at hand and the target market.

Although there has been talked of the market is saturated, there is still plenty of demand for housing for low and middle-income segments of the population, where the majority fall.

• Agribusiness

Agriculture is the mainstay of the economy, providing livelihood to 75 percent of the population. There is considerable scope for diversification and expansion of the sector through accelerated food crop production, processing, and marketing.

A venture into the agribusiness sector in both small and large scale activities is a profitable area to invest in. Agribusiness offers a solution in terms of job and wealth creation given that Kenya is also an Agri-based economy.

Whether a Chama seeks to venture into chicken rearing, dairy farming, horticulture or tap into export opportunities, farming has great potential. The secret is to go beyond the conventional crops and livestock. 

There are also opportunities for improvement in technological infrastructures such as packaging, storage, and transportation. Intensified irrigation and additional value-added processing are areas for investments.

Some of the profitable areas to invest in include a hatchery for egg production, Fertilizer distribution, Rabbit production, Worm farming, construction of livestock houses, offering consultancy services to farmers, offering agricultural financial services, poultry, and pig farming or even greenhouse farming.

• Stock Market

Investing in the Nairobi Securities Exchange (NSE) through licensed stockbrokers and investment banks.

 A share or stock is a financial instrument where one acquires ownership of a portion of a public limited company and owning one of these shares will give you some rights as a shareholder such as dividends.

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In Kenya, individuals have to invest in shares of companies listed in the Nairobi Securities Exchange (NSE) through licensed stockbrokers and investment banks.

Chamas can take advantage and invest their money in the Stock Market.

• Treasury Bonds

Treasury Bonds are issued by the government to raise money. The difference is that Treasury Bills are longer-term instruments over one year and the minimum investment amount is Sh50,000.

Bonds are simply ways in which the government or large corporations borrow from the public to fund projects, or run the government.

The Kenyan treasury bonds offer quarterly, semi-annual, or annual T-bonds with repayment periods of between 1-30 years. Interest varies with the duration of the bonds and the amount issued.

Instead of a Chama saving money in Banks, they can opt to invest in Treasury Bonds as they fetch higher interest rates, though the interest fluctuates with the economic trends.

The government has an inexpensive bond called the MKiba, purchased through M-PESA. With as little as 3, 000 shillings, a Chama can earn a 10 percent annual interest.

• Tourism Sector

There are a lot of opportunities to invest in the tourism sector and Kenya is amongst the top tourist destinations in Africa.

Some of the available opportunities that a Chama can explore when investing in this sector include Tourist hotels, Game lodges, Tourism and hospitality training, Tourist Vans, Amusement parks, Restaurants, Casinos, and Clubs

That said, there is a ton of investment opportunities for Chamas. It all depends on where your goals are aligned. Thankfully, today you can use various tools to conveniently raise the money and hold them for that specific purpose.

A tool such as Malipo App by Malipo Circles conveniently helps your chama elevate itself to the next level. It is a solution that also allows groups to come together and contribute towards a specific purpose. Some of the app’s functionalities are collections, disbursements, loans, record keeping, reports, marketplace, among others.

Malipo App is the right platform for Chamas as it negates distrust, ensures that members continue contributing even when they are absent, keeps track of all the transactions while ensuring utmost transparency.

Learn more about the Malipo App here and all the benefits your Chama stands to enjoy.