Community Currency User Guide

Sarafu ya Jamii USER GUIDE - KENYA

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What is the “Community Currency User Guide” for?

This document has been created to overcome the most common challenges you can face and to answer the common questions you can ask as a member of a Community Group using a Community Currency. If you can’t find in this document the answer to the challenge you are facing or the question you are asking yourself about Community Currency, please contact your chama and share your issue with the committee or board members.

What are the questions answered in this document?

  1. What is Community Currency?
  2. What benefits can I expect from Community Currency as a member?
  3. What is the directory and what are its benefits?
  4. Who are my guarantors (backers)?
  5. How much Community Currency should I keep in my pocket?
  6. Why is it important to keep Community Currency moving?
  7. How do I keep an average of 200 Community Currency on a weekly basis
  8. Can I give Community Currency as change to customers?
  9. What should I do if I have too much Community Currency (more than 400 on a weekly basis)?
  10. What should I do if I have too little Community Currency (less than 200 on a weekly basis)?
  11. If my supplier isn’t a member, how can I buy my supplies and stock with Community Currency?
  12. What should I do if other members are not accepting Community Currency?
  13. How should I price my goods and services in Community Currency?
  14. What should I do if a member comes to buy in my shop with only Community Currency?
  15. How do I get a loan in Kenyan Shillings?
  1. What is Community Currency?

    Community Currencies like Bangla-Pesa, Ng'ombeni-Pesa, Kangemi-Pesa, Lindi-Pesa and Gatina-Pesa are local means of exchange that do not replace but rather supplements (tops-up) the Kenyan Shilling. Through increasing trade by matching unmet local needs with under-utilized local resources community currencies enable sustainable economic, environmental and social development programs. Community Currencies are distinct from the wider field of financial innovations because they are set up with the involvement and backing of the people and organizations that will ultimately use them. Community Currency is worth the same amount in Kenyan Shillings of goods and services. As a voucher, Community Currency should not be exchanged for Kenyan Shillings.

  2. What benefits can I expect from Community Currency as a member?
    • To help you to meet your daily needs during the hard times of the month (food, rent, transport, school fees).
    • To help the community through community events such as trash collection.
    • Members are issued 400 Community Currency, 200 of which is kept for community services. This is your membership fee.
    • To help you to increase your daily sales and costumers and to save more Kenyan Shillings. For instance a boda boda 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. This increases the overall efficiency of the market and helps the community weather poor economic periods.
    • To create a strong community network and market (allowing people to meet, share ideas, trade goods and services and to launch group programs and initiatives).
    • If you are not a member, ask a network member to help you with an application form (you must be selling and buying in the local area). You can also take part in community events to receive Community Currency and you can also ask for change in Community Currency.
  3. What is the directory and what are its benefits?

    The Directory is the list of all active members using and accepting Community Currency. It helps members know each other and if you have too much Community Currency it is where you should be spending it; and if you have too little Community Currency, …you should contact the people in the Directory to come to your shop.

  4. Who are my guarantors (backers)?
    • These are the four people who endorsed you to join the network.
    • These four people are committed to buying from you with Community Currency on a regular basis.
    • These four people are committed to selling to you with Community Currency on a regular basis.
    • These should be the people you should trade with the most.
    • If you refuse to accept a balance of at least 400 Community Currency, you and your guarantors (backers), can be expelled from the network including all group/chama activities such as events and loans.
  5. How much Community Currency should I keep in my pocket?
    • Since all members were given 400 Community Currency they should accept at least 400 Community Currency
    • In one week, your balance may go from 0 to 400, back to 0 up to 400 again, but on average you should have 200 Community Currency.
    • By accepting more than 400 Community Currency, you are giving a loan to your customers
  6. Why is it important to keep Community Currency moving?

    The faster Community Currency moves between members, the better the economy is. If it stops moving, it stops helping people trade.

  7. How do I keep an average of 200 Community Currency on a weekly basis
    • Try to buy using Community Currency each day and try to sell your goods with Community Currency each day.
    • Use Community Currency to give change and accept Community Currency as change when you buy from members
  8. Can I give Community Currency as change to customers?

    Yes. As long as they understand how to use it; by bringing back to your shop or the shops of other members. Show the customer the directory explain how and where to use the Community Currency.

  9. What should I do if I have too much Community Currency (more than 400 on a weekly basis)?

    If you receive more Community Currency than you spend you might end up with too much. You can easily solve this problem by:

    • Using the directory to find new businesses to buy from using Community Currency.
    • If you can’t buy regularly from members, give Community Currency as change to your customers.
    • If none of this solution is working, refuse to accept the Community Currency from the next members and contact your four backers and the committee to explain the situation.
    • The network members owe you their services and goods.
  10. What should I do if I have too little Community Currency (less than 200 on a weekly basis)?
    • You are in debt! By spending your Community Currency you have received a loan of goods and/or services from other members. In order to repay this debt, you must accept up to a balance of 400 Community Currency for your goods and services. If you spend more than you receive you might end up without enough Community Currency. You can easily solve the problem:
    • You need more customers with Community Currency. Advertise yourself to more members by contacting them through the directory.
    • If no one is buying your goods and services using Community Currency:
      1. Contact your four backers or guarantors
      2. Notify the committee and ensure that you’re in the directory
      3. Buy goods and services from members and accept change in Community Currency
  11. If my supplier isn’t a member, how can I buy my supplies and stock with Community Currency?

    If your supplier isn’t a member explain to them the benefits of the program and give then an application form and a directory. - If your supplier refuses to become a member, you will make sure to accept as much Kenya Shillings as you need to buy your stock.

  12. What should I do if other members are not accepting Community Currency?
    • Make sure the member understands the program; they might not understand how to price their items using Community Currency
    • Give the person a chance to explain why they are not accepting it and come back another day
    • If the member has too much Community Currency already, help them find a way to use it (make sure they have a directory)
    • If all else fails, contact their guarantors (backers) and committee (they may need to be expelled from the network).
  13. How should I price my goods and services in Community Currency?
    • First, look at your profit on that good or service and charge half of that profit in Community Currency.
    • For example, if you sell Unga for Ksh.100 and you’re making Ksh.20 profit, half of the profit is Ksh.10; this is how much you would charge in Community Currency. The final price for the Unga is Ksh.90 and 10 Community Currency.
    • In general, for every Ksh.100 you could accept 10 Community Currency.
    • For every Ksh.50 you could accept 5 Community Currency
  14. What should I do if a member comes to buy in my shop with only Community Currency?

    If someone comes to your shop with no Kenya Shillings tell them to come back when they have some Kenya Shillings.

  15. How do I get a loan in Kenyan Shillings?
    • Community Currency is a loan of goods and services which you pay back with your own goods and services.
    • To get a Kenyan Shilling loan, you must save Kenyan Shilling in the group/chama account and apply for a loan from the group itself or the bank
    • By using Community Currency more, your business should have more customers and more stability and hence more deserving of a loan.

Test your Knowledge with the Community Currency Quiz below

NOTE: Many answers may be correct; mark all that apply.

  1. How much Community Currency were you first issued as a member?

    (a) 100 (b) 200 (c) 400 (d) 500

  2. How much Community Currency did you pay to be a member?

    (a) 0 (b) 100 (c) 200 (d) 400

  3. Can you exchange Community Currency for Kenya Shillings?

    (a) Yes (b) No (c) Sometimes

  4. What is the value behind 100 Community Currency?

    (a) Ksh.50 (b) Ksh.90 (c) Ksh.100 (d) Ksh.100 of goods and services (e) Ksh.110

  5. What does it mean if you have 400 Community Currency in your pocket at the end of the day?

    (a) I have too much Community Currency
    (b) I need to sell more products for Community Currency
    (c) I have as much Community Currency as I was first issued
    (d) I should be spending it as fast as possible
    (e) I can buy Ksh.400 of goods and services with members of the network

  6. What does it mean if you have 500 Community Currency in your pocket at the end of the day?

    (a) I have too much Community Currency
    (b) I need to sell more products for Community Currency
    (c) I can exchange my 500 Community Currency for 500 ksh.
    (d) I have 100 more than I was allocated and should spend it as soon as possible

  7. What does it mean if you have 0 Community Currency in your pocket at the end of the day?

    (a) I have too little Community Currency
    (b) I should be spending it as fast as possible
    (c) I have received a profit of at least ksh.200 of goods and services from members for free and need to repay them.
    (d) I need to sell more products for Community Currency

  8. How do non-members use Community Currency?

    (a) Receive it for work done during community events
    (b) Choose to accept it as change when buying things in Kenyan Shillings from members
    (c) Never get to use it
    (d) Can only use it once they become members

    Quiz Answers: 1.) c 2.) c 3.) b 4.) d 5.) c, d, e 6.) a, d 7.) a, c, d 8.) a, b