Community Currency


A community currency is a regionally based means of exchange that does not replace but rather supplements the national currency system. Through increasing trade by matching unmet local needs with under utilized local resources, community currencies enable sustainable environmental and social development programs. Community Currencies are distinct from the wider field of financial innovations because they are set up with the asset and productive capacity backing of the communities that will ultimately use them.

Community Currencies bring a radical change to how we think about sustainable development. As a socio-economic development tool they offer an innovative way to improve conditions by:

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

Community Currencies such as the Bangla-Pesa give business communities a way to create their own mutual-credit-clearing (barter exchange) system to build economic resilience and self-fund community development programs. Grassroots Economics is working to spread the benefits of the Bangla-Pesa pilot program in communities around Africa. These programs are effective for creating long term sustainability and ultimately don't need donor inputs past inception. With community currencies, businesses (including schools, the self-employed and informal sector workers) form a network which creates a credit backed directly by the goods and services of the businesses. This creates a form of interest-free credit that the community members can use when the national currency is scarce. Membership fees in these networks (in the local currency itself) can then be used for community development programs.

Community Currencies represent the foundation of what is rapidly becoming a global movement toward democratic and decentralized monetary systems. With immediate social and financial impacts, these currencies bypass the limitations of crypto-currencies and micro-finance, by enabling local resilient markets across Africa.

Grassroots Economics has helped develop five currency programs in Kenya including: Kangemi-Pesa, Gatina-Pesa, Lindi-Pesa (Kibera) Nairobi, Ng'ombeni-Pesa and Bangla-Pesa (Mombasa)

How it works

A demo Tano (5) Bangladesh Business Network Voucher.

Local goods and service providers in areas like Kangemi, Kenya are brought together into a business network and legally registered as a Community Based Organisation or Cooperative. Each business member is guaranteed by other members for an initial amount of credit. These credits are currently printed as vouchers for goods and services, usable at any business in the network. Business owners within the network trade both in Kenya Shillings and to an agreed percentage, using the Kangemi-Pesa community currency. A percentage of these credits are collected by local networks as a tax and used for social service work – like employing local youth for waste collection and road maintenance. The credits rotate around the community helping to connect excess supply and demand for people who lack access to shillings. In order to avoid members collecting too much community currency we facilitate the ability for those members to purchase cooperative assets. Fundamentally the assets of these cooperatives form the collateral basis for community currencies.

For example, a mother can use her own labor to pay for her child's education, by denominating her goods and services into a tradable credit (Community Currency). A school receive the credit can use it to help pay for school fees and increase teacher’s salaries. 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.

Methodology - Community Currencies

Community currencies are a proven alternative means of exchange to supplement the insufficiency in national currency and credit. The analysis from the data we have collected from GE’s community currency pilot programs shows that people living on less than two dollars a day can liquidate their work potential and increase market stability by empowering a network of micro-businesses in informal settlements to issue a rotating credit voucher.

By removing donor dependency and interest bearing loans, slum and rural communities can lift themselves out of extreme poverty by building a foundation of stable markets using a community currency that incubates local business. This increase in sales revenue creates market stability and food security. It taps into all the excess, underutilized capacity of the community. Each business can increase their sales by as much as 100% by being part of a large trading network.

We are creating a new monetary system from the ground up!

Currency Art

Our original artwork was done by Karol Opondo using acrylics. Karo is the Head of Art Department at The Mombasa Academy, Kenya. She finds that the communities around her are her greatest inspiration. The art on the Gatina-Pesa and the Kangemi-Pesa were done by students at Sifa Children's center and Kangemi Youth Center. The security printing and graphic design for Bangla-Pesa was done originally by the Punchlines Security team in Nairobi under the artistic direction of Saul Nassilah. As of 2014 we've begun printing new Community Currencies in Germany with Brunner Inc, with the assistance of security paper from the German Chiemgauer program. Tatajana Posavec is our current computer graphic designer. She has been working for regional voucher system "Chiemgauer“ in Germany for many years and likes helping to establish regional voucher systems in Africa very much.