- How does Community Currency work?
Upon accepted membership in a business network (Registered Community Based Organization), a member is audited and endorsed by other businesses to be allocated Community Currency. Community Currency serves as a voucher or promissory note for members' goods and/or services and can be used to account for barter exchanges among network members. It is the accounting mechanism of reciprocal exchange. Terms and Conditions for CC Vouchers usage can be found here
- What is the value of a Community Currency compared to the National Currency?
As with all our community currencies, the Bangla-Pesa is a voucher for goods and services of participating businesses and is denominated in 5, 10, 20 and 50 Bangla. These vouchers are worth exactly the same amounts in Kenyan Shillings and are backed by the goods and services of the issuing business network. The Bangla-Pesa, Gatina-Pesa, Kangemi-Pesa and so on are all vouchers on parity 1:1 with the Kenyan Shilling. Note that Kenyan Shillings are not exchanged directly for Community Currency or visa versa.
- How does one become a member of a Business Network?
You must fill out a detailed registration form and be endorsed by four other members of the network, these four other members act as your guarantors and are responsible for your conduct in the network. After reviewing your application and guarantors a committee may accept or reject your application. Should you be accepted you will have to be trained and then allotted Community Currency which you agree to back with your goods and services according to the statues of the network. A member must be able to both spend and receive Community Currency locally for her or his goods and services.
- If I accept Community Currency (CC) - how am I going to buy more stock outside the local area? (i.e. how will I get the National Currency (shillings) I need?)
Members only accept as much Community Currency as they can use in one day for local needs like your food and water. Each network's statutes state that no one should have a total balance of more than 400 CC. If a member has a balance approaching 400 CC they need to spend it before they accept more. (Members always make sure to have enough Kenyan Shillings to buy the stock they need). Generally members accept and use about 70 Community Currency per day, this causes a roughly 20% increase in local sales and no decrease in the use of Kenyan Shillings (according to survey data from Feb 2014). Community Currency is for daily spending connected to a businesses excess capacity, which enables them to save their Kenyan Shillings for savings and investment.
- Who is backing Community Currency?
Each member agrees to back 400 CC with their goods and services when they register. In addition each member has a guaranteeing group of 4 members that endorse and back their membership and Community Currency.
- How can this help my business and what are the economics benefits?
Community Currency (CC) is meant to help businesses and schools utilize their excess capacity and hence increase sales and spending in a designated area. This increase in trade allows for Kenyan Shillings to be used for buying things outside the communtiy and investing in education and business. It is a circulating credit-like voucher with no interest among the businesses and schools of an area. For instance a bicycle operator may have the capacity for 20 customers a day, but in general only has 10. Now he can give rides to those businesses in exchange for goods and services they have in excess, such as a woman who has extra tomatoes to sell or a teacher who has time for more private lessons. This increases the overall efficiency of the market and helps the community weather poor economic periods and overall stabilizes the local and National economy of Kenya.
- How can non-members take part?
Community Currency helps stabilize the those businesses that are the foundation of the local economy. BBN members can also setup community service events which non-members can take part in.
- How can I get more Community Currency?
By selling your excess goods and services to those who have it. Note that Community Currency must be guaranteed by each member's commitment and ability to redeem it's value in goods and services.
- Does Community Currency replace National Currency?
No. Community Currency merely assists members in trading their excess capacity, such that they can use their shillings for savings and investment. It is complementary to the Kenyan shillings and does not replace it. We expect an overall rise in Kenyan Shilling use in the area due to more efficient markets, business practices and investments.
- How much Community Currency is in circulation in Kenya?
Community Currencies (CCs) using the Bangla-Pesa model are in use in 5 Informal Settlements in Kenya. In each community roughly 100 members are audited and guaranteed by four other businesses for 400 Kenyan Shillings worth of Community Currency. Since Community Currency is only a voucher or promissory note, the amount in circulation is equal to what the network commits to backing and is limited by local production levels. Therefore in each community there is roughly 40,000 Kenyan Shillings worth of Community Currency for a total of approximately 200,000 KSH in circulation in Kenya. Each CC voucher is security printed in Germany with denominations of 5, 10, 20, and 50. This is the same in Bangladesh, (Bangla-Pesa), Kawagware (Gatina-Pesa), Kangemi (Kangemi-Pesa), Kibera (Lindi-Pesa), Kwa Ng'ombe (Ng'ombeni-Pesa)
- What is the difference between counterfeiting and complementary barter based currencies?
The 2011 case of the U.S vs. Bernard Von Nothaus points out, private barter currencies are perfectly legal, whereas coinage that is created and distributed in resemblance and similitude of Central Bank issued currencies may be deemed as counterfeit currencies. Community Currency does not seek to imitate National Currency, such as Kenyan Shillings, or any other currency in any way and is clearly labeled as a voucher.
- On August 23rd 2013 Bangla-Pesa was deemed by the Director of Public Prosecution in Kenya to not have broken any laws. Read his report here.
- Does Bangla-Pesa relate to the Mombasa Republican Council or any secessionist or terrorist organization?.
No. There is no affiliation whatsoever. We hope Bangladesh remains a strong part of Mombasa County and Kenya and continues to become a thriving community.
- Do Community Currencies work in other countries?
While the Community Currencies used by Grassroots Economics is unique, there are hundreds of similar systems in dozens of countries around the world, often called Complementary Currencies, Barter or Reciprocal Exchanges. Read a paper by the City of London on the topic. Note that Grassroots Economics recently helped two communities in South Africa to implement similar programs.
- Are there other examples of communities using the Bangla-Pesa Community Currency system?
We are working with several communities in Africa that are just starting to adopt the model. As of 2015 there are five CCs in Kenya and 2 in South Africa using the Bangla-Pesa Community Currency Model.
- How does one prevent counterfeit of Community Currency?
Each voucher is printed by Kenya's top security printer, Punchlines Ltd. In order to deter people from copying Community Currency vouchers they have included several security features such as, Ultra Violet Ink, specialty paper, micro-lettering and serial numbering and a metallic stamp.
- What is the connection between Community Currency like Bangla-Pesa and the National currency (Kenyan Shillings) and how do they merge?
Members can accept payment for their goods or services in Community Currencies which they can then use for goods or services at other members businesses, hence facilitating multilateral barter trade or reciprocal exchanges. This allows a water seller to sell water to a customer with Community Currencies that might not have afforded his services. The water seller can then use the Community Currencies to purchase food at a local restaurant utilizing excess local capacity for trade. All members continue to use and accept Kenyan shillings and increase their ability to save or invest in their families or business.All members are allocated a fixed amount of Community Currencies at no cost. Community Currencies are not purchased like M-Pesa or the Brixton Pound.
- What is going to happen to the National Currency?
For each transaction we recommend the Community Currency only be used for 50% or less of the profit of the good or service sold. The purpose of the Community Currency is to top-up missing National Currency, so that trade in the area can increase. There will be times when there is plenty of National Currency in the community for trade and other times when the Community Currency is needed more. It is important to note that stabilizing local trade should only increase the overall stability of the national economy and increase Kenyan Shilling trade and savings. Our goal is a local credit reserve where at least 10% of local consumption is locally produced and trade facilitated by Community Currency. The National Currency is still needed for 90% of local trades as well as all imports and exporting in an area.
- The local government has failed us many times, what can this program do for us?
This program is not run by the local government, but rather it allows local businesses to take an active role where the local government hasn't been able to help. The intention of the program is that it is owned by the local business community after a 1 year introductory period.
- How do i get backers or guarantors?
Your backers or guarantors should be other businesses that purchase goods or services from you, and that you in return buy from. An ideal backer would be one of your customers who is also a supplier. Ultimately your backers should represent the core group in which you will be trading Community Currency.
- Where will the money be used? at which businesses?
The Community Currency will be used at businesses of all registered members. A list of these members will be made available when you receive your Community Currency. Community Currency can also be used in your own business to give advances on salaries for employees.
- How will it be regulated and controlled?
The program is under the supervision of Grassroots Economics, the University of Cape Town and in coordination with the local local government. Community Currency (which are vouchers equal in value to National Currency), will be issued per registered member of the business network. Future issuance will be in coordination with the business network. All the issued Community Currency will be 100% backed by the goods and services of members who are members of a certified Community Based Organization.
- How much CC is allocated per member of the networks?
The initial allotment of CC has been set to an average amount of money prospective members spend on food daily. As a lower estimate GE determined that each member could produce or sell at least 400 CC worth of goods and services daily and spend those CC on food at a minimum. In addition, as each member joins the network he must be guaranteed for 100 CC by four other members. Since the CC is akin to a loan without monetary collateral it is important that not too much is issued, (but rather that it circulates rapidly.) This initial amount is highly dependent on the spending habits of the community.
- How will it help my business grow?
It will allow customers to buy your goods or services even when they don't have enough National Currency. This will increase your sales and customers and help stabilize the local market.
- How are we going to get this Community Currency?
Each registered member will receive Community Currency. Of which a portion of Community Currency will be kept for community service programs. This is your contribution to help the community. There will be a public launch event during which allotment of Community Currency will being for registered members.
- If my supplier is not going to accept Community Currency, wouldn't that have negative effect on my business?
Note that members are required not to collect a balance of more than the amount of Community Currency that was allotted. Even if your suppliers do not accept the Community Currency, you can still spend it yourself as you would National Currency for other goods and services from other members of the business network. In this case you will only accept as much Community Currency as you know you can spend locally.
- What if this Community Currency ends up putting our businesses in jeopardy?
As long as the business only accepts up to a balance of 400 Community Currency (they amount they were initially allocated) they should be in no fear of jeopardy. Should a business accept more Community Currency than they are able to use in the Business Network, their backers are responsible for educating that member and helping them use the CC. Ultimately it is up to the Community Currency user to understand the risks and make appropriate business decisions.
- If the Community Currency collapses what will happen to the Community Currency already in circulation?
Since the Community Currency is backed by the goods and services of members it can only collapse if a majority of members of the Business Network decide that the Community Currency should not be used in the area, In that case each member should return as much Community Currency as they were allotted to the Network's committee. If the member has an excess of Community Currency beyond what they were allotted, it is up to other members, who have less Community Currency than they were allotted, to exchange those Community Currency for goods and services.
More FAQs and Arguments on Community Currencies in general can be found here: http://complementarycurrency.org/helpdesk/faq.html