Everyone would love to invest in something. Everyone would love to make money. But what happens when the same money you invest in something is the same money you get back?
Merry-Go-Rounds are widespread in Kenya. Many people call them “Chamas” but methinks they do not qualify to be “Chamas” but “hoodwinking money cycles” that make you believe you are “saving.”
In Kenya, merry-go-rounds are where a group of people come together, agree to be putting together a certain amount of cash monthly or weekly, and give the amount to one of the members with the process repeating after each member has been “served.”
It is like giving someone 10,000 shillings and getting it back in its 10,000 shillings form with no interest. No growth. And what is interesting is, that the same cash comes in and leaves to “serve other members.”
Merry-Go-Rounds is like giving and receiving your own money with nothing tangible to show for it. I agree, that merry-go-rounds may help in times of emergencies but they do not give room for investments, especially where the timeframe is between one week and one month.
Putting your money in a merry-go-round is like putting your cash in an M-Pesa or in a bank account. And merry-go-round is the high risk where a member dies before contributing or some members pull out and go missing as soon as they receive the cash.
The worst merry-go-rounds are those that involve family members. It is like gambling with your own money with the chances of it getting lost being always high. This is because some family members feel entitled and might not be serious about the whole exercise.
We are not saying that merry-go-rounds are bad but what is the use of “investing” in something that gives you nothing back but your own cash? That is not investment, that is being “tethered” with your own money.
