Community Currency

What is Sarafu-Credit - Community Currency?

Our premier Kenyan Community Currencies, in the Sarafu-Credit family (such as Bangla-Pesa), are 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 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. They are distinct from the wider field of complementary currencies because they have the collateral of cooperative assets of the communities that use them. 

How it works

Sarafu-Credit network model.

(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 and the community currency is also used for social service work – like tree planting, employing local youth for waste collection and road maintenance. 

(4) Business owners within the network trade both in Kenya Shillings and Sarafu-Credit. The community currency circulates 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 any excess to purchase cooperative business inventory.

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.