A New Kind of Cash

“Cash is the enemy of the poor,” wrote Rodger Voorhies, director of the Bill & Melinda Gates Foundation’s program aimed at improving financial services to the poor.

While, I have a soft spot for technology - targeting cash as the enemy of the poor is sadly short sighted and self serving coming from the big money behind the Gates foundation.

If all the poor in the world could suddenly switch to using debit cards, or mobile phone money transfer - would we really see a change to current level of inequality? Or would we just see a those who sell the services and hardware making a killing in profits? Turning that concept on 'developed' nations is equally ridiculous - Is cash the problem in Greece or Detroit causing economic devastation?

Providing cheap tech solutions for financial services has been touted as:
  1. potentially beneficial to the poor
    - and much more so -
  2. as huge new market for tech companies - selling software, cell phones, etc.

Whatever the motives for pushing more and more tech solutions, the fundamental problem is definitely not cash, nor is it simply lack of cash - The problem is rooted in failing monetary system that gives private banks the power to create money in-order to profit off peoples' debt. What this means on the ground in places like slums in Kenya, is that to get money to grow your business you have to go into debt - which is likely to land you in a lot of trouble at usurious interest rates. People that do end up raising above unstable markets and horrible conditions have little trouble at all accessing financial services for their money.

Promoting savings is the icing on the cake - the financial services promoted by tech giants are really of one main variety, like M-Pesa, they offer money transfer services with middle men raking in huge profits. The financial service that no one seems interested in providing is currency issuance, not transfer. Mainly because it involves empowering communities and less profits rising up the pyramid.

What is really lacking is not financial services that move money back and forth. What is missing are financial services that enable the poor to create their own currencies.

Articles like this one tout Bitcoin for could work for the poor. Yet Bitcoin has shown the same flaw in mirroring the inequality of our current failing system. Who gets to mine Bitcoins? Who gets to issue credit? Certainly not the poor - unless we change that.

This key financial service can be provided to communities at little cost and doesn't need mobile technology.

Cash is still king - but we need a different kind of cash, like Bangla-Pesa

With minuscule cost to develop or implement - and zero cost to run and transact Bangla-Pesa, a community currency, has hundreds of 'poor' people trading more than 10,000 shillings of paper/cash Bangla-Pesa daily. This is a currency issued and back by a local community with their own goods and services. It isn't purchased. It isn't mined. It is issued and guaranteed by a local business network and starting to be adopted areas across Kenya.

Perhaps down the road services like Bangla-Pesa could be offered via mobile phone (this really depends on the cost to users) - but the tech aspect is secondary to the innovation of giving communities the key financial service they lack - the ability to issue their own credit not tied to debts in national currency.

Each year we see big businesses and big money trying to push the new tech revolution on the poor - are they simply pushing technology or are they actually interested in ending poverty?