Community Currency

Our premier Kenyan Community Currency, Sarafu-Credit, is a regional means of exchange that supplements the national currency system. A network of businesses, schools, self-employed and informal sector workers form a cooperative whose profits and inventory are issued as vouchers for social and environmental services as well as an interest free credit to community members. These vouchers circulate in the community and can be used at any shop, school, clinic or cooperative businesses and form a stable medium of exchange when the Kenyan Shilling is lacking. This injection of money into the community in the form of a community currency, based on local assets, increases local sales and helps directly develop the local economy. Sarafu-Credit, Grassroots Economics’ Kenyan Community Currency program, creates stable markets based on local development and trust.

As a socio-economic development tool, Sarafu-Credit, a Community Currency, offers an innovative way to improve living standards by:

  • Providing community groups access to an interest-free credit, thereby increasing local trade, employment, small business development and overall local economic stability.
  • Providing a mechanism for communities to build local trust and finance social services, such as education, environmental and health services.

Community Currencies are central to the global commons movement. With long-term social and financial impacts for low income communities, Community Currencies are distinct from the wider field of complementary currencies because they are backed by cooperative assets and productive capacity of the communities that use them. Sarafu-Credit stresses the need for mutual interest-free credit, based on local trust and cooperative assets.

How it works

Sarafu-Credit network model.

In the Sarafu-Credit diagram to the right we see that 1.)Local goods and service providers in areas like Kangemi, Kenya, are brought together into a business network and legally registered as a Community Based Organization (Chama) or Cooperative (SACCO). 2.) This cooperative develops or acquires a shared businesses, such as a factory, wholesale shop or bus. 3.) Inventory and profits from these cooperative businesses form the basis for a voucher that is issued as a Community Currency. Each business member is guaranteed by other members for an initial amount of credit. The community currency is also used for social service work – like tree planting, employing local youth for waste collection and road maintenance. These credits are currently security printed as paper vouchers for goods and services, usable at any business in the network. 4.) Business owners within the network trade both in Kenya Shillings and Sarafu-Credit and the credits rotate around the community helping to connect local supply and demand for people who lack regular access to national currency. 5.) Community Currency holders may also use them to purchase cooperative assets.

For example, a mother without sufficient Kenyan Shillings can use her own labor to pay for her child's education, by getting a credit based on her goods and services in Community Currency. A school receiving the credit can use it to help pay for school fees and increase teacher’s salaries. The teachers can use the Community Currency to pay for cleaning services from the mother or any goods and services in the network and it can keep flowing in a virtuous cycle. This credit acts as a strong buffer to market instability ensuring that hundreds of businesses have a means of exchange even during the worst economic times. Members also enjoy other benefits besides increased customers and stock turnover. They are also invited to many events that the networks facilitate, such as training, community market days, and networking events, as well as participation in savings and loan programs.

If you have more questions, please read the FAQ.


Economic and social impacts of the Community Currency programs:

Based on 505 businesses surveyed across 5 networks an average of 36.6% of sales are being accepted in Community Currency (survey done during 2nd trimester 2017):

Social Impacts:

  • Community Services: 57% of members (684) report Community Currency being used for environmental programs (such as trash collection and community gardens)
  • Willing to continue: 93% of members (1114) want the program to continue and increase the amount of Sarafu-Credit in the Community.
  • Education: 23% of members report using Sarafu-Credit for school fees (276 Students with increased education)
  • Trust: 77% of members say that trust in the community has increased.
  • Gifting: When asked “How much over the last month did you give (in money professional services and time) to support people or groups without expecting compensation?”
    • Non-using Groups averaged 191 KSH (equivalent) monthly
    • Monthly Community Currency Users averaged 855 KSH (equivalent) monthly
    • -> 347.48% Higher amounts of gifting for those using Community Currency

Economic Impacts:

  • Food Security: 6% of daily food purchases are being made by members using Community Currency
  • Job Creation: 17% of members report hiring new employees because of the program (206 jobs created).
  • Customers: 57% of members report increases to customers and 65% report increases to sales because of the program.
  • Member retention: overall we have issued a zero-interest credit to 1700 members totaling roughly 7200 EUR and retained 1140 members (95%).
  • Community Currency usage over time (average daily amount of CC Usage). We find the longer people are in the program the more Community Currency they are using.
Building resilient economies through cooperative businesses

Effective community currency networks develop income generating cooperative businesses that reduce the need for importing goods and services into the community. These businesses are incubated and flourish within a community market and in-turn help build greater market stability against volatile external shocks. Example cooperative import replacing businesses could include:

  • Supermarkets – Help created hubs for stocking local products,
  • Flour milling – Process local maize and other grains for consumption,
  • Oil pressing – Cold pressing coconut and other seeds to produce a local source of body and cooking oil,
  • Community farms and food gardens – Produce food locally using permaculture techniques,
  • Local transport – Help buy bicycles, hand-carts and motorized transport for local residents,
  • Local clinics - Offer needed services to people in the community,
  • Nursery and after-school services - Offer children a safe place to grow and learn,
  • Cooperative resource management - Such as grazing lands, water reserves and fuel wood forests can be managed and maintained using community currency.
Enabling Education

Community Currency helps ensure children are getting an education by allowing parents to use their goods and services to pay for school fees when national currency is scarce. Community Currency is used to pay for tuition and other school costs and in turn goes to teachers’ salaries then out into the community for goods and services and then back to the schools again in a virtuous cycle.

Communities receive more sponsorship

Studies show that when trying to support people that need it most at a part of sponsors and government funds can go missing due to rampant corruption and embezzlement (1). Converting those funds instead to community currency, ensures that the community of beneficiaries will be the only people who can spend those funds. Besides the Community Currency being offered as a zero-interest credit to local businesses, sponsor funds can be issued to students, elders and clinics, where they can be then spent in a network of hundreds of shops and schools. This increases local trade and helps support the local community. (1) See for example a Tanzanian experimental study: Di Falco, Salvatore; Magdalou, Brice; Masclet, David; Villeval, Marie Claire; Willinger, Marc. 2016. Can Transparency of Information Reduce Embezzlement? Experimental Evidence from Tanzania. IZA Discussion Papers, No. 9925


For research results on our Community Currency program, please visit the research page.

Current Programs

For our current programs, please visit the programs page.