Table Banking in Kenya: How It Works and the Rules That Keep It Healthy
How table banking works, how it compares with a merry-go-round and an investment chama, and the loan, interest and share-out rules every group needs.
Table banking is one of the most popular ways Kenyan groups grow their money. Instead of keeping savings in a bank, the group puts the money "on the table" at each meeting and lends it straight back to members. The interest members pay stays in the group, and it is shared out at the end of the year.
Done well, table banking turns small monthly savings into a working fund that finances school fees, stock and small businesses. Done badly, it leaves a group with a pile of unpaid loans and angry members. This guide explains how it works and the rules that keep it healthy.
How table banking works
- Members contribute a fixed amount at every meeting. This builds each member's savings, usually recorded as shares.
- Loan repayments and interest from earlier loans are also collected at the meeting.
- Everything collected is put on the table and lent out again to members who have applied, on the same day.
- At the end of the cycle, usually a year, the group stops lending, collects all outstanding loans, and shares out savings plus profits.
A simple example
A group of 20 members each contributes KES 2,000 a month, putting KES 40,000 on the table at the first meeting. Four members borrow KES 10,000 each. Next month, those members repay with interest, the other members contribute again, and a larger amount is available to lend. Month by month, the fund grows from contributions and interest, and all of the interest belongs to the members.
Table banking vs a merry-go-round vs an investment chama
| Type | Where the money goes | How members benefit |
|---|---|---|
| Merry-go-round | The whole pot to one member each round | A lump sum on their turn, no interest |
| Table banking | Lent to members at interest | Access to loans, plus a share of the interest |
| Investment chama | Invested in land, shares or a business | Long-term returns on the investment |
Many chamas combine them, for example table banking for most members' savings and a separate merry-go-round.
The rules every table banking group needs
Loan limits
Link each loan to the borrower's savings. Up to two or three times their share balance is a common rule. Set a maximum per member so one loan cannot empty the table.
Interest
Agree on the rate and the method. A flat rate charges interest on the full amount for the whole term. A reducing balance charges only on what is still owed. The difference is large, so read our guide to chama loan rules, which has a worked example, before you decide.
Guarantors
Any part of a loan above the borrower's own savings should be guaranteed by other members, from savings they have not already pledged.
Repayment and fines
Set the repayment period, the due date (usually the meeting day) and the fine for paying late. Apply them to officials too.
Priority when money is short
There will be months with more requests than money. Agree on an order: emergencies first, then the members who applied earliest, or members who have not borrowed recently.
Year-end share-out
Decide when lending stops before the share-out, how outstanding loans are recovered, and how profit is divided. Most groups share profit by savings balance. Our dividends guide has worked examples.
Where table banking groups go wrong
- Cash at the meeting with no receipts. Every shilling that comes on or off the table must be recorded against a member.
- Interest calculated in someone's head. Two members with the same loan end up paying different amounts, and trust breaks.
- Loans rolled over without records. Unpaid balances disappear from view until share-out.
- Savings and loan repayments mixed together. Members' share balances end up wrong, and so do their dividends.
- No reconciliation. Nobody checks that the cash, the M-Pesa and the book add up after each meeting.
Running table banking in ChamaPoint
ChamaPoint is built for groups that save and lend:
- Contributions and shares are posted to each member's ledger, including M-Pesa payments that post automatically.
- Loan products with your own interest rate and term (calculated on a reducing balance), applications that officials approve, and guarantor pledges recorded against guarantors' savings.
- Repayment schedules generated for every loan, with repayments by M-Pesa.
- Fines and welfare kept separate from savings.
- Dividends split by share balance at the end of the year.
- Every member sees their own savings, loans and fines on the app or web portal, or by USSD from any phone.
See how it all fits together in our chama management system overview, or start a 7-day free trial and run your next table banking meeting on ChamaPoint. No card is required.