Grace Akoth, who lives in Kakamega western Kenya, has been a member of a cash-saving group that comprises ten women for close to seven years.
Each month, the women have been contributing 1,000 shillings (about 10 U.S. dollars), from which members can take loans at a small interest.
This has been the practice since the group was formed, with Grace taking loans regularly to boost her clothes business or pay school fees for her children.
But on Wednesday, Akoth recounted that members met and agreed that they share some money from their savings to cushion themselves from financial constraints brought about by COVID-19.
“Each one of us was handed 80 dollars. This is not a loan but money from our reserves. We agreed that anyone who needed more was to take a loan,” said Akoth on Friday, adding the money was a big relief to members.
The saving groups, commonly known as chamas in the East African nation, are offering relief to hundreds of Kenyan women in particular as the country battles COVID-19.
While some men are in the groups, women in the East African nation lead in running the chamas thanks to their good mobilization skills and ability to remain in such outfits, whose demands include attendance of meetings every month.
Members are also required to contribute agreed amounts every month and are guided by rules they set themselves.
Some groups contribute money and save for loans, others raise cash every month and share in turns, which has also given the groups the name merry-go-round.
So pervasive are the savings groups in both urban and rural areas that financial institutions like banks have specific products for them.
The savings groups are currently standing out as they aid members financially strained amid COVID-19 outbreak.
Some Kenyans have lost their jobs while others have seen their salaries reduced as businesses struggle to survive.
“My wife received shopping worth 60 dollars from her chama members last week and it was such a big relief for the family,” said Allan Kyalo, a businessperson in Kitengela.
He had helped his wife make monthly contributions to the group but never fathomed that the outfit would one day offer a huge relief to his household.
“Business is low currently. Few people are making doors and windows because of the COVID-19 uncertainty. So any help is welcome since I still have to pay rent for my house and my shop,” said Kyalo, who is a welder.
Marceline Otiato, the chairlady of Uzima Group, said they normally contribute 40 dollars every month.
“The 12 of us are still contributing the amount but instead of giving one person, we resolved to share among three members every month to cushion ourselves and complete the cycle faster,” she said.
Ernest Manuyo, a lecturer at Pioneer Institute in Nairobi, said that such informal saving systems are going a long way in cushioning Kenyans from financial distress brought about by COVID-19 outbreak.
The chamas are coming at a time when some of the mobile-based lenders tightened their services or suspended them following tightening of rules by the Central Banks. Some are also avoiding losses since many people cannot repay their loans due to the COVID-19.
The Kenya Association of Investment Groups notes that chamas control about 20 million dollars of assets in the East African nation. Enditem