Chama’s, and their potential for planetary regeneration

What is a “Chama”?

Chamas or VSLAs (Village Savings and Loans groups) began to spring up in the late 1980s in Kenya as a response to a lack of affordable and accessible credit .

• At inception, these informal savings groups consisted of women who were familiar with each other, either by relation, proximity or religious affiliation.
• These self governing groups have evolved to include various loaning mechanisms and staking and rewards systems. Although these groups are unregulated, they do require registration when high thresholds are reached. It is estimated that over 300,000 registered chamas exist today in Kenya, with members collaborating in more than 1 Chama in their lifetime.

Chamas have been used to provide social assistance in times of need, such as this Chama of elderly internally displaced women in Kenya.

💡 The Chama DAO is working to bring Kenyan micro-savings systems (Chamas) together with the future of eco-feminist climate financing using blockchain technologies.

Our collective mission

To cultivate Sovereign, Bioregional Regenerative Economies by

• Accelerating the shift towards regenerative land stewardship
• Providing sovereign, verifiable records and creating sustainable economies.
• Leveraging Web3 DAO technologies to enable transparent governance practices.
• Bridging the gap in Global Climate Financing by De-Risking Investments

What we envision

Creating a platform that encourages behavioural change to build a healthier world,

• By using incentive mechanisms to reward regenerative land stewardship practices
• Opens the door for climate leaders to access the much-needed climate financing.

How do we achieve this

Chama DAO aims to empower on-ground Chama communities that are dedicated to regeneration and equip them with the relevant tools and visibility through a platform that would:

• Track, record, and store their proof of regeneration in a secure way, granting them full rights to this data and allowing them to decide when and with whom they would like to share it.
• Store the Chamas’ transactional data, contribution rates, payback periods, and default rates on-chain using blockchain technology. This way communities can create verifiable records which was never possible with the informal system till-date. Donors or investors who are interested in these groups will have access to this data, and they will be encouraged to invest in such initiatives with reduced risk. Consequently, this will ultimately help the Chamas acquire better financial capacity.
• Utilise DAO technologies to increase Chamas’ organisational capacity and ensure greater transparency in their governance practices.

Our Approach

• We support climate justice initiatives with DAO technologies, and evolve DAO technologies with the insights and legacies of climate justice initiatives. It’s a reciprocal process. Put another way, we incubate regenerative DAOs.
• We leverage tools related to blockchain and decentralised ownership to channel resources to land based communities. We work to anchor their stake in a future economy where value and planetary health are fundamentally aligned.
• We don’t solely focus on carbon, rather see it as one of a multitude of forces defining regeneration.

💡 We view regeneration as a wholistic process including the environment, humans, and healthy local economies which have the potential to sustain both.

Chama DAO’s Team

This program is led by Shaila Agha, a true leader in the field of climate activism. Through her work with local communities, agricultural development, and fintech, she brings an intersectional approach to developing this program. Over the course of her career, she has extensively documented the governance systems of Chamas and aims to leverage Web3 technologies to give them greater capacity by improving transparency, accountability, and legitimacy, which would open them up to climate financing.

The program has active collaboration from diverse stakeholders, including Daven Savoie, who is the technical lead and has extensive experience in ag-tech, web3 technologies and building local-tooling for rural Kenyan Communities.

The program is actively advised and supported by the Regen Foundation team, which includes Austin Wade Smith (ED), Nena Jain, and Revathi Sharma Kollegala. The research phase is also supported by a grant from Filecoin Green Foundation.

A Community Forest Association of volunteers who are protecting the Kajiado water tower by patrolling and reporting cases of deforestation. They also educate the community on responsible forest pruning and provide them with seedlings to regenerate the areas that have been degraded.

Our Strategy

This is our intended roadmap and Strategy for the FY2023

Phase 1 — Research

To lay the groundwork for building an impactful project, we will start by asking some pertinent questions. We will commence with an in-depth research, which will involve nationwide study, field visits, engaging diverse stakeholders in the design and research process, and securing seed-funding for this project. Some of the questions we are trying to answer are:

1. What are the major challenges faced by Chamas?
2. What technologies have they leveraged so far?
3. What needs of the Chamas can the market meet?
4. Is chama size and proximity the key marker for success and if so, will a technology that provides them a score be beneficial to their overall fundraising strategy?
5. Is there a correlation between chama success and the amount of funding available to them?

Milestones:

1. Feasibility Report

• Craft a problem Statement by directly involving on-ground communities and varied stakeholders
• Identify the regions we want to pilot in

2. Working group members onboarded

• 2 research Advisors,
• 1 PHD students and
• 4 subject matter experts (Gender, Chama, Legal, DAO governance)

3. Chama Identification

• Onboard 3 Chamas we want to pilot this program with
• Human Centric Design workshop
• Create a Research framework to understand their governance processes and identify the gaps that DLT technologies can solve

4. Risk assessment

• What are the risks we might encounter during the course of this project and how do we mitigate it?

5. Final Research Documentation

• Create a comprehensive report with all the elements and milestones listed above, along with research hypothesis and conclusion

Timeline:

January 2023 → June 2023 (Q1 & Q2/2023)

Budget:

$30,000

Phase 2 — Design and Development

In this phase, we will develop educational resources as part of the Regen Commons to bridge the gap between on-ground Chama communities and web3, and to facilitate onboarding. These frameworks will then be utilised during the pilot phase to identify methods of optimising the process.

After completing phase 1 and gaining a better understanding of the gaps in available data for regenerative claims, we will design a database architecture to store and query the data and to establish relationships between it.

Milestones

• Educational resources
• Web3 Encyclopaedia
• DAO toolkit (translated to Swahili)
• A guide for Regenerators on leveraging Web3 tech
• Data structuring
• Sample data collection
• Data workflows
• Database architecture
• Scalability model
• Documentation based on field work

Timeline:

June 2023 → Dec 2023 (Q3 & Q4/2023)

Budget:

$38,000

Phase 3 — Proof of Concept (PoC) and User Testing

A working proof of concept model with a simplified UI/UX will be deployed to test the DAO governance with sample data implemented. We will also create dashboards with the Chama data and test out the staking and rewards Liquidity Pools.

We will observe this in Alpha for a month and document bugs and fixes and create robust documentation that can be then used to fork, edit and deploy.

Milestones:

• Demo prototype of a community staking pool for impact investment
• Wireframes created from phase 1
• Tech stack Proposal
• Developer documentation
• Working PoC for Chama DAO

Timeline:

Jan 2024 → Dec 2024

(This phase may take longer, stretching up to a year)

Budget:

$300,000

History of the Chamas and its cultural context

To be Kenyan is to participate in a Chama, whether directly, indirectly, once or continuously. Started in the 70s as a response to inaccessible credit, these groups were formed primarily by women.

• It has been historically seen that women started these collective savings groups, Chama, with friends, neighbours or family as this multiplied their chances of raising capital.
• The merry-go-round system which is one of the most common forms of saving is done at a specified frequency (say once a week, twice a month, once a month) depending on the Chamas agreements.
• Members all agree on a baseline contribution then this amount is pooled at each meeting and given to one member. This member is then allowed to use the funds to kickstart their business venture.

The Namanga Forest Conservation Group Chama

How Chamas are Democratising Financial Systems

• Chama system, which is completely decentralised in its spirit, has managed to uphold autonomy and democracy in its governance. Decisions are made on a continual basis and each member has a single vote.
• Each chama is unique depending on its constitution and mandate. Generally, Chamas tend to adopt the system where the power and responsibility of upholding governance shifts from one member to another through the roles of a Treasurer, Chair and Secretary. This rotating system helps build empathy in the system and avoid abuse of power.
• However, in the case of Family-run Chamas, it is often seen that the head of the family or the family elders, have control over where the money is spent and how much the contributions per member should be.
• Additionally, there are Chama systems, where the individual contributions can vary depending on the individual’s means. In such circumstances, contribution rates, interest rates and payback periods vary as well.

Maasai scout volunteers from Namanga Forest conservation group raise funds by taking guests on hiking tours of the Ol’donyo Orok mountain.

💡 What new DAOs in the web3 world are aiming to achieve, Chamas have already managed to champion that in the last 50 years; imagine the impact they can make with improved technology and resources! They can be a unique and ideal test case for both #DeFi and #ReFi.

Nurturing Socio-Economic Relationships

• It can be said that the Chama is its own organism, constantly adapting to include local culture and promote compassion. This has been possible as women around the world helped to pioneer this new invention.
• Unlike traditional banks, interest rates and repayment periods, fines and collection of arrears are all done on an individual basis. For example, if one member fails to get back on time to pay back his or her Chama loan but has experienced a death in the family, there may be a social protection fund that helps the person with costs for funeral arrangements. There are also likely to be granted a grace period to get back on their feet.
• Due to this, Chamas often have relatively low repayment default rates. Additionally, Chamas operate on trust-based systems, where the individuals already know and have a relationship with existing members. Whether colleagues at work, cousins or neighbours, there is often a shared mandate and vision for the savings. This convening of shared passions is the main success factor in these groups

💡 Chamas have proven to be an effective way of community-based financing; however, due to a lack of verifiable records, they failed to attracted financial institutions or bigger investors to provide resources. By storing this data on-chain, we could help bring them credibility and legitimacy and open them up to a global financing market. They could be the perfect model for the ReFi industry to make an impact at the community level.

Eco-feminist financing

• The Chamas in Kenya were formed in the 1970’s as a response to lack of access to financial resources for women including credit scores for easy access to loans. This way, women could start their own micro businesses by pooling their resources together and creating community owned funding pools. All members of the Chama would take turns to use these collective resources.
• Many rural communities resort to Chamas, where there is little to no security for getting loans. This is due to the fact that many small-holder farmers inherited their lands, a practice that never required the current formal system of securing “title deeds”.
• This means although many are land rich, but they have no education, means or resources on valuing their property and other holdings. This often leads to them making uninformed decisions when they decide to sell their land for much needed liquidity.
• This exploitation of the rural farming communities has led to their systemic oppression and poverty of the essential farming communities, the same group that often works on the frontlines to tackle the impacts of the climate crisis and are the worst affected.

A Chama in Kwale, South Coast Kenya, a semi-arid area, who pooled resources and started regenerating the soil through the use of Aloe Vera. They save for seedlings and classes on how to add value to the Aloe and increase their incomes since traditional farming has failed in the area

Groups such as these exist in many corners of the globe and yet their efforts to regenerate the soil and mitigate the effects of Climate change go unnoticed.

💡 By awarding participants such as this women’s group in Kwale, with eco credits and allowing for them to be purchased on the Regen Network Marketplace we can provide these chamas with an opportunity to raise much needed funding to further their efforts towards regeneration.

The evolution of the Chama

• With the increased use and development of mobile money (M-Pesa) and other digital platforms such as WhatsApp, the Chama system has evolved to go beyond geographical borders. Members can meet digitally as well as in person, agreeing on agendas remotely over chat-rooms.
• They can fund their Chama line with M-pesa as well, which can be registered under the name of a Community-based organisation or under the Treasurer’s name. This means increased accountability for members, who can request for statements from time to time.
• There are an estimated 300,000 chamas in Kenya today with a total of about $4 billion. However, this number could be double the amount because not all chamas are registered and work informally.

The fishermen group below pooled their resources to develop this creek side restaurant and shop. Over 10 years have passed and now they are turning their efforts towards restoration, regenerative education and awareness.

Project lead Shaila with the founding members of the Prawns lake conservation group. They have since built 3 structures along the creek through pooled resources and are now facilitating the development of an umbrella group MCCA (21 Chamas along Mida Creek) to help with lobbying, community engagement and more.

Prawns lake conservation group boardwalk along Prawns lake at Mida Creek. The proceeds of the sales of prawn dishes goes towards funding mangrove restoration, creekside garbage cleanups and conservation.

💡 This group like many other Chama’s in Kenya face issues with governance and accountability and has been their greatest challenge to scale. These challenges can easily be overcome by deploying DAO technologies.

Do you feel aligned with our mission and vision and would like to contribute?

Here are some ways how:

• You can become an advisor for the program and help us with the research
• You can also become an active mentor for the groups coming onboard through this program.
• You can also become a program partner and send us an outline of the nature of collaboration you have in mind.
• Additionally, you can put us in touch with on-ground partners that might be a good fit for this program.

Please get in touch with us via contact@regen.foundation

FAQs

• What is Regen Network
• The Regen Network is collection of communities, technologies, and land practices which reward regenerative stewardship of our planetary commons.
• We work to align collective economies with local practices of environmental regeneration and stewardship to not simply fine polluters but reward regenerators.
• Regen Network is a market for compensation for ecological regeneration through ecosystem service credits. We build infrastructure to reward stewardship of the commons.
• We work in service to the humans, and more-than-humans which steward the commons. The phrase commons is key here. We use it to mean all the ecological resources which are accessible to all members of society like air, water and earth. These resources are held in common, and not owned privately. Regenerative stewardship of the commons is mutually beneficial to local economies and the biosphere at large.
• We believe the biosphere is a commons, whose value must not simply be protected or conserved but regenerated. Sustainability isn’t enough.
• In juxtaposition, we think late-capitalist markets are predicated on extraction, and treat all relationships outside of finance capital as externalities. We don’t think all markets are bad per se, and believe that markets can and should exist which include ecological, social, and cultural health as integral parts of any economic calculation.
• In order for systemic regeneration to occur, it must be economically viable for communities. This requires working across short and long term timelines, and thinking of collaboration as a practice of symbiosis between human beings and all the other living things on earth.

How do we reward Commons Stewardship

• Regen Network is a community-governed registry of ecosystem service credits which works to build ethical compensation for communities working to regenerate our planet.
• You can think of it as an evolution of carbon credit registries with several important differences.
• We are decentralized, meaning no one person decides what should happen to the registry, nor does one central database hold all of the information. How the network evolves is determined by the votes of token holders.
• Carbon is a very 1-Dimensional depiction of ecological and economic health. We work to expand the processes and relationships considered when defining regeneration. Thus: Carbon Credits → Eco Credits
• You can think of Regen Network as a market governed by land stewards where those same land stewards earn income based on their regenerative practices. They might:
• Sequester carbon and foster local bird populations through agroforestry
• Foster bee populations and replenish topsoil ecology by integrating native plant species onto a farm.
• Remediate polluted waterways and support migration corridors by protecting and maintaining riparian zones.
• Every Eco-Credit is a means to describe part of a system of Regenerative Stewardship.

What are these Ecosystem Services?

• The schematic above illustrates a simple example of compensation for commons stewardship as a loop.
• Upstream : Communities practice Regenerative Land Stewardship supporting essential ecological functions. Have a look at many here!
• Eco — Credits : Planetary regeneration means habitat for biodiversity, replenishing of aquifers, erosion control, decontamination and so much more! Eco-credits are ways of proving regeneration has happened. Credits are typically quantifiable, and transparent about their verifiability. They don’t have to be outcome based. Some are based on practices over outcomes. Have a look here!
• Downstream : Regen is building a market for the voluntary purchase of regenerative eco-credits. See the beta site here.
• Payment : Eco-credits purchased are typically retired. This means the work of the regenerators has be paid for by a buyer who believes in the value of their work and the ecosystems function.

What are Eco Credits

Eco-credits are much more than just carbon sequestration. By rewriting the integrity of carbon credits to include support for greater ecological and economic health, Regen Network builds a system to support regenerative communities in a wholistic way.