Ashish Kothari interviews Ruth Mwangi about the path-breaking idea of “Community Currencies” and how it is being implemented in Kenya.
Ashish Kothari: Ruth, could you give us a short introduction to the work you are doing in Kenya?
Ruth Mwangi: Sure. I work with Grassroots Economics Foundation as its program director. We work with Small and Medium Enterprises (SMEs) in slums and villages of Kenya, specifically with networks of vendors, craftsmen, and schools to help them obtain credit so that they can trade with each other when the national currency is scarce.
Ashish: Which cities do you work in?
Ruth: We work in Nairobi and Mombasa. Mombasa is in the coastal area of Kenya.
Ashish: How large are the populations of low-income people in these cities?
Ruth: In Nairobi 61% of the urban population lives in informal settlements, and we work in some of them, viz. Kibera, Kawangware and Kangemi.
Ashish: And specifically, what are you doing to help them to be less fragile in regard to the currency or the economic systems?
Ruth: So, one often finds that during harsh economic times, these vendors would have goods and services to trade, but lack the medium of exchange, which is money, the national currency, which is the Kenyan Shilling, and they end up taking goods from each other on credit. This really reduces the trust in the community. But with a community currency that they have created themselves, they are able to trade, compliment the national currency using the community currency and in one way or another they have been able to trade their ‘debts’. So at the end of the day, if a child faced the possibility of missing school because he/she did not have enough money for tuition, the teacher could accept part of the payment in community currency. And the parents are able to put food on the table because they are able to buy food using community currency.
Ashish: And do a lot of people within the community like shopkeepers, schoolteachers and different kinds of people accept this currency?
Ruth: At first, it was very hard to have them accept it because community currencies are very complex, and so it needed a lot of capacity building and training on how the voucher and community currency worked. But, the first thing we did was to work with already existing businesses, which traded within an existing network. These are businessmen and women who have already lived in the same community and know each other because of the business relationship they have. They already knew whom they bought their charcoal from, and which hospital clinic would they take their child to etc. So, after extensive training and developing an understanding of the operations it becomes easier for them to start accepting community currency as a voucher.
Ashish: How long has this process been on?
Ruth: The pilot was done in 2010, and the first community currency called ‘Bangla paisa’ (there is an area called Bangladesh in Mombassa) was launched in 2013. The highest denomination is 50 which is equal to half a dollar or 50 cents. And this note can only be used within a particular community. So, for example in the Bangladesh community, it would have a stamp saying Bangla paisa, paisa as you know is Swahili for money, also Hindi for money. Yes, so this has been officially running since 2013.
Ashish: And do you know approximately how many people use the community currency?
Ruth: We have about 280 in each of the communities that we work with, and now we are working with 6 communities in Kenya.
Ashish: Okay. And how much money will they be able to save on an average, if they use this a few times?
Ruth: Ho much will they be able to save? So we credit them with 400 worth of currency that amounts to 4 dollars. This is the amount they will be using in one or two days, you know. So, they will be able to save at least about 20% of the national currency everyday, which would probably go into their savings, long-term savings or anything that they would really need to buy outside of the community.
Ashish: Great! And do you have plans to expand this in some way?
Ruth: Yes! We have had numerous requests from other villages, from other parts of Kenya. The challenge with expanding is that it needs a lot of training and capacity building and it’s also quite expensive to start a community currency program. So, what we are doing right now is that we have started a community currency course, which trains people on how to start their own currencies. As a result, we, as Grassroots Economics do not need to be there physically. We’ve also had a couple of students, both, from Kenya and outside of Kenya, who have attended the two weeks course. They’ve gone back and are now doing a feasibility study to see whether it is something that is viable. Interested people from Kampala, Uganda invited us about one and a half years ago to start a similar program, there. The tricky part about Uganda is that the people who invited us were an equivalent to the municipality in Kampala and they want to roll it out to the whole of Kampala, and that is a couple of million people. And the challenge is that we don’t have the experience working with so many people. So, we are working on a digital currency for them and that is what we hope to pilot in the coming months.
Ashish: Are you connected with the other global, community currencies elsewhere.
Ruth: Yes. So when you talk about community currencies in Africa you’re talking about Grassroots Economics. But, we do get invited to international community currency conferences. Currently, we are in touch with Time Credit, Palmas in Brazil, and many others.
Ashish: Great! Anything else that you would like to add…
Ruth: I think as we continue to experiment with these alternative methods of trade and alternative ways of living, we should also think about how sustainable can they be. Are the next generations going to find them efficient and easy enough to implement? So, as we think about work we need to think about the sustainability of whatever programs we are working on, currently.
Ruth Mwangi is the Program Director for Grassroots Economics Foundation, Nairobi, Kenya. ([email protected])
Ashish Kothari is a co-founder of Kalpavriksh.
The interviews published in the RED Conversation series are not based on an exact transcription of the recorded interviews. They are an approximation based on an interpretation as well as a summation of the original interview. To view the recorded interview, click on the link below:
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