Providing Women's Groups in Kenya Access to Mutual-Credit

In the past many development economists saw African Chamas as archaic tribal institutions that would die out with the rise of the modern banking, but today they are flourishing and a key mechanism for communities to provide themselves with access to funds. Beyond wealth sharing, Chamas are used as a gateway for credit unions and micro-finance institutions to establish eligibility for loans. Unfortunately there are two key problems that Chamas face:

  • Volatility – Chama members live in a situation where the money is incredibly scarce and access to revenue can be highly seasonal.
  • High interest bearing loans – When Chamas are given access to bank credit or micro-finance loans it is at high interest rates which often cause Chamas to fail.

Instead of traditional bank loans this project will create a mutual-credit (or Chama Credit) system that will serve this purpose without interest bearing debt. Each Chama member will be credited with Chama Credits (CC). These credits are only used for goods and services amongst the Chama members. Ultimately, CC is a credit backed by the services and products of the members. Chamas have a strong governance structure, legal status and have a long history of dealing with group finances and loans. They tend to be made up of women elders and especially business owners. For these reasons Chamas make an ideal mutual-credit issuing organization. This program entails setting up an sms trading platform, training and materials development. The implementation of the proposed project will improve the socio-economic conditions and contribute to community development by:

  • Connecting Communities to Their Own Abundance.
  • Providing Community Groups Access to Credit
  • Providing a Mechanism for Communities to Finance Social Services.
  • Increasing Local Trade and Local Business Development
  • Creating tools for Development Programs Worldwide
  • Increase profits and stability of over 200 local women run businesses.
  • Create sustainable trash collection and other social services in three villages (within the Kongowea slum).
  • Reduce waste burning, effecting the health of 20,000+ community members.
  • Create financial sustainability and job security in an informal settlement.

Stage one of this program was completed in 2011 and called Eco-Pesa. Community Forge wishes to initiate phase 2 of this program by empowering Chamas to sustainably self-issue credit via sms systems and keep social, environmental and economic benefits flowing.

We are looking for funding for development and implementation over a one year period. After which this software, processes and materials will be open source for communities around the world to develop. If you can help make this happen please donate. or click on PayPal.

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