Michael Kimani has an issue with the term unbanked. “It is very misleading. It is already binary.”

The unbanked is a term used in the articulation of the Financial Inclusion narrative. Financial Inclusion (FI) is mostly framed as an effort to bring people without a formal financial identity into the mainstream banking/financial system, by mostly giving them bank accounts.

It is this framing that Michael finds problematic. “The Financial Inclusion narrative has been wrapped around turning people into bank customers, and quite often, when you hear people talking about the unbanked in Africa, the assumption is they are in a vacuum, that they don’t have banking services.”

However, that is not the case, at least not for most people. For a long time, people in Africa and most of the developing world have organised a semi-formalized financial system that is built off their social connections. This system is manifested in small groups, and while they could be working towards various ends in mind, they operate in a near identical manner. In Kenya, they are mostly referred to as Chamas, in South Africa, they are Stokvelas, in Bermuda, they are known as Club Hand, Esu in Bahamas and Partner is Jamaica. Because these groups are built off the social fabrics, they mostly transact off the formal banking system.

This is the point of disconnection between Michael and the FI narrative. The narrative while being aware of the existence of these groups has for a long time, chosen to ignore, or downplay, them. However, the role the groups play, and that of banks are not really different.

“What do you get from a bank? Loans, investment opportunities, insurance and other financial products. All these you can get in chamas.” says Michael. Chamas do this immensely and their influence cannot be downplayed. For instance, in Kenya, it is estimated that chamas have assets valued between 4-8 Billion dollars, and six in ten Kenyans are at least in two different chamas.

The issue with the people who are fixated on the FI narrative is they approach these chamas as though they need to be co-opted into the mainstream financial system to open them up to more opportunities. However, Michael, and his group who founded a startup called Chamapesa have a different approach in mind. “We are not here to make them abandon their way of doing things, we are here to enable them marshal resources to build on their way of doing things.”

Chamapesa is a social network for chamas on the blockchain. It aims to digimirror chamas, that is basically take the behaviour of the chamas and duplicate it digitally on a blockchain network. Allowing chamas to connect on a network will foster social and economic collaborations.



Connecting them is more straightforward than one could imagine. Despite the approach and view of these savings groups by mostly western audiences, their operations are actually quite sophisticated. For instance, for table banking, the chamas will come together once every month, or week. They’ll put their money on the table and those with loans will repay them and those applying for loans get theirs after approval. It other more formalized settings, every member has a booklet whose records corresponds with the main book. At the end of every meeting, after everything has been reconciled, the record is sealed, till the next meeting when a new record is opened. So, as Michael explains, these books are in fact, a blockchain in a way.

“Every time they come to a consensus on the state of the books at a meeting and the accounts are closed is an instance of a block, which gets attached to another block at the next meeting forming a chain of blocks over time. What we are working on is helping groups digitally preserve what they do without altering their elements,” says Michael. “We believe this is a very powerful thing. It is like community banking. An alternative way to economically empower communities.” He adds.

Michael is a co-founder and Chief Marketing Officer. He is also the current Chairman for the Blockchain Association of Kenya and a vocal speaker and writer on alternative financial models and forms. He joined Chamapesa after meeting the other members of the team in online Blockchain/Crypto fora and realizing that their thoughts on most things finance align. The other members include Ian Griggs who is the platform’s architect has been working with financial cryptocracy and blockchain elements since the late 80s. Toffene Karma who is from Chad built TigoPaare, one of the most successful group mobile financial products for Tigo. The other founders hail from various countries with Ken Griffith coming from the US, and Eva Stowe from Germany.

Chamapesa started out in 2012 and has been doing research with the savings group since. Some of this is captured in a new documentary from the company. They are ramping up after people, especially investors, became more receptive to blockchain/crypto after it went mainstream. Their current release to the market is a social app that has accounting and auditing tools and all other chama functions. In addition to doing the core administrative tasks like record keeping within the app, you can also do group messaging, vote on issues, and you give someone a guarantee. It is based on ricardian technology which resulted from Ian Griggs early work in the 1990s.

Since chama operations are entirely built around group privacy, they plan to give each group a litechain so that every group will have their own blockchain hence keeping all the data private within the domain of the chama members.

“We are a privacy first company. The data models that exist today are not user controlled. In our case, every time the chamas meet and record this in an app, that data first and foremost belongs to them. Even as the platform provider, we can’t access their private records. If anyone wants to see what these groups are doing, you have to ask the group for permission and the group will sit together and decide whether they want to share their data with someone.” Says Michael.

“We feel we are building a powerful network, an alternative system. He adds. “We are going to build like a network that can support itself.”

Featured Image; CEO Magazyn via Creative Commons.

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