Looking at some facts, I am inclined to say no:

There are currently an estimated 300,000 groups, which collectively hold a combined asset base of at least Ksh300-billion.

Popularly known as chamas by Kenyans (loosely translated as “committees”), investment groups became visible during the 1980s and 1990s when the country’s economy was struggling, and were formed for social welfare purposes. Chamas have matured over the years, with some registering as companies and other investment vehicles. Most of the groups initially invested at the Nairobi Securities Exchange and the real estate sector.

You might remember an interesting post on the Open Book Blog where David Roodman asks whether microfinance is a Schumpeterian dead end.  In that post, Lant Pritchett talks about a trip to India when he was asked how self-help groups work in his own country. The answer: they do not exist, therefore they can be considered a Schumpeterian dead end.

I was asked the exact same question a couple of months ago during a meeting with a group in Nairobi. I  had never thought about it before, so I was caught unprepared, but my instinctive answer was that self-help groups have not disappeared in my country; rather, at some point they evolved into other types of organization like credit unions, social enterprises or formal investment groups.

I need to read lots more on this topic. But my impression so far is that instead of being a sign of backwardness or a dead end, chamas in Kenya tend to evolve over time and to combine elements of “welfare” and “investment” as different opportunities arise -depending on the needs (and salaries) of group members. For the poor, chamas help tackling the huge problem of income volatility; for richer people, they are a vehicle for investments and business growth.