In many cases, stock-based chamas has suffered from embezzlement, mismanagement of funds, agreements with borrowers not to repay, high rates of credit default, interpersonal conflicts, and disagreements over how to invest the group`s savings.  After withdrawal, a member receives the value of his capital account at the time of withdrawal within thirty days, except that the repayment of the capital account of an outgoing partner requires the liquidation of securities, the repayment of the capital account may not be deferred for more than fourteen additional days in order to allow members to vote on the securities to be liquidated. As a result of this withdrawal, the member must make a safety agreement, mentioning the Chama and the individual members, to protect all. A longer-term form of Chama in Kenya is organized on the basis of shares that members buy to acquire a percentage of the chamas investment or income. These organizations are classified as Accumulating Savings and Credit Associations (ASCA). This structure is very similar to an investment fund However, Chama`s management is not compensated for the management of the fund, with the exception of the profit from its own investment. Members usually have to make a monthly commitment of a minimum investment and bring their money to monthly or weekly meetings. Chama leaders invest the pooled funds in a manner agreed in advance. As a rule, chama grants loans to members at very high interest rates.
20% per month is typical. Chamas is also known for investing in transportation (taxis, matatus, buses), land, rentals, agricultural businesses, stocks, bonds and other financial products.  Please note that words printed in bold can be tailored to your chama needs. You can also tailor this contract to the needs of your asset group. The Chama will begin on February 10, 2012 and will continue for a period of five years and thereafter from year to year, unless terminated earlier by this Agreement. (a) the dissolution or any other cessation of chama; (b) Changes to the Chama Agreement The waiver or failure of either party to exercise in any way any right under this Agreement shall not be deemed a waiver of any other rights or remedies to which the party is entitled.