Certificate Course in Community Currencies for Grassroots Development

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The following wiki will be used to hold additional material for the MOOC and Github pages created by Grassroots Economics (GE).

http://grassrootseconomics.org/certificate-course https://github.com/GrassrootsEconomics/HowTo-Paper-Currencies/edit/master/README.md


This course will immerse you into the world of Community Currencies as a tool for economic and community development. We will cover why and how Community Currencies have been implemented in marginalized communities as well as their history, set backs and future projections. After completing this course you will be have a strong foundation to design, customize and implement Community Currencies.

Topical Outline:

  • Community Currency Theory: development economics, history of money, financial systems and debt, currency models, goals standards and ethics.
  • Preparation & Development: community participation and ownership, system design, voucher creation, communications, partnerships, and legality.
  • Setup & Launch: cooperative facilitation, collateral asset development, financial sustainability, and marketing.
  • Long Term Care: long-term support, audits, Community Currency renewal.
  • Management: system maintenance, legal reporting, accounting, currency circulation, administration, data collection, and personnel.
  • Fieldwork: on-the-ground survey work and interviews; lessons learned from previous Community Currency models; taking part in community currency events and activities; economic resource mapping.

To register for the course do it directly through the GE page -http://grassrootseconomics.org/certificate-course

Below you will find relevant materials to fully understand the taxonomy of the currencies and support materials to be able to design and implement them.


What is Money?

Definition: According to the Bank of England, in a modern economy, money is a type of IOU, but one that is special because everyone in the economy trusts that it will be accepted by other people in exchange for goods and services.


  • Medium of exchange
  • Store of value
  • Unit of Account


  • durability
  • portability
  • divisibility
  • uniformity
  • limited supply
  • acceptability
  • value

How are National Currencies Created?

  • Sir Mervyn King, Governor of the Bank of England 2003- 2013 - “When banks extend loans to their customers, they create money by crediting their customers’ accounts.”
  • “Right now bank deposits makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of real cash that you can touch.”
  • Martin Wolf, who was a member of the Independent Commission on Banking, put it bluntly, saying in the Financial Times that: “the essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending”

How we got here

  • In UK - Before 1844 only the government was legally allowed to create metal coins. Over time, the paper receipts had for their stored coins, became accepted as being as good as metal money. People effectively forgot that they were just a substitute for money and saw them as being equivalent to the coins.
  • Coins were originally stored with Gold Smiths who became the first banks, and began to issue more notes than they had in reserve.
  • Eventually the gold standard was completely lost and reserve requirements for banks were based on cash. But today those requirements have effectively vanished.
  • Private Banks currently create 97% of the worlds money supply.
  • By creating money in this way, banks have increased the amount of money in the economy by 11.5% a year over the last 40 years. This has pushed up the prices of houses and priced out an entire generation.

“What is the Salient Economic Unit?” - Jane Jacobs

Why do Nations have sovereign currencies at all?

-With banks in control of the credit supply, sovereign money or national currency today has lots much of it's meaning.= -Why should the Kenyan Government have to borrow at interest the money it needs?

Switzerland is a top performing economy in the world with a population of only 8 million people and has retained its own currency. – And 1 out of 4 businesses are part of Complementary Currency Programs – If 8 million people in the middle of Europe can have the top economy in the world and their own Currency – what would happen if all areas of ~8 million people could have their own currency?

Community Currency Theory

Global Economic Problems in Summary

Usury: Interest Bearing Debt: Money created as debt – On a global scale this ensures more money creation to pay interest. Since the ability to repay this debt nationally and globally is impossible (not enough money in the system), more money must be created (at interest) to pay off the current debt – and so on.

Fiat: Money created with no backing. There is little to no regulation on the private banking system’s creation of credit. This is defined as a bubble creating huge profits for banks and increasing instability (bubble) and inequality.

Inflation: a factor of 3-5x faster than production worldwide.

Local Economic Problems in Summary

Market Instability: Money comes into local communities largely from exportation of labor to external markets and leaves communities through purchases of imports. If these external markets, falter, or have any seasonality this drastically effects the amount of money available for trade in a local community.

Lack of Money: The money supply is not sufficient to trade available goods and services.

Lack of Investment: Given a chronically non-liquid market nearly all available money goes toward basic needs and consumption of imported goods. Money is not saved as much as it could be, and the mechanisms for savings are difficult. Investment comes with interest bearing debt.

Capital Ownership: Cooperative development can help low-income groups pool resources and develop local industries. (Competing for scare resources)

Lack of local industries: Over dependence on imports causes money to leave local system. Exporting the majority of labor is inefficient - labor should be utilized and products created for local consumption and export. Rather than tapping the local labor force and building new businesses, the majority of local businesses only sell retail goods to these workers.

===Differences in Characteristics of Money===

Characteristics of Money:

  • durability
  • portability
  • divisibility
  • uniformity
  • limited supply
  • acceptability

Characteristics of Community Currency:

  • Backed by local value
  • Non
  • Interest Bearing and Non-Inflationary
  • Supportive of local industries and cooperatives
  • Building local identity and trust
  • Providing market stability Free to use and develop Community issued and regional in usage

Theory of Change

Mutual Credit: (The term implies that creditors and debtors are the same people lending to each other)

The practice of multilateral exchange can be a mere convenience, but once a common unit of account is agreed, the extent to which members can draw credit limited, a mutual credit system quickly resembles a money system.

Keynes proposed a mutual credit system called International Clearing Union instead of a gold standard.

Theory of Change ----> Growing Local Production Through Liquidity Injection ---> Value circulates within

Community Currencies: A brief Overlook

What is it?

Community Currencies are regional means of exchange that supplements the national currency system. A network of businesses, schools, self-employed and informal sector workers form a cooperative whose profits and inventory are issued as vouchers for social and environmental services as well as an interest-free credit to community members. These vouchers circulate in the community and can be used at any shop, school, clinic or cooperative businesses and form a stable medium of exchange when the national currency is lacking. This injection of money into the community in the form of a community currency, based on local assets, increases local sales and helps directly develop the local economy. The Community Currency programs create stable markets based on local development and trust.

As a socio-economic development tool Community Currency offers an innovative way to improve living standards by:

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

Community Currencies are central to the global commons movement. With long-term social and financial impacts for low income communities. They are distinct from the wider field of complementary currencies because they have the collateral of cooperative assets of the communities that use them.

How it Works?

(1) Local goods and service providers in areas like Kangemi, Kenya, are brought together into a business network and legally registered as a Community Based Organization (Chama) or Cooperative (SACCO). (2) This cooperative develops or acquires a shared businesses, such as a factory, wholesale shop or bus. (3) Inventory and profits from these cooperative businesses form the basis for a voucher that is issued as a Community Currency. Each business member is guaranteed by other members for an initial amount of credit and the community currency is also used for social service work – like tree planting, employing local youth for waste collection and road maintenance. (4) Business owners within the network trade both in Kenya Shillings and Sarafu-Credit. The community currency circulates around the community helping to connect local supply and demand for people who lack regular access to national currency. (5) Community Currency holders may also use any excess to purchase cooperative business inventory.

For example, a mother without sufficient Kenyan Shillings can use her own labor to pay for her child's education, by getting a credit based on her goods and services in Community Currency. A school receiving the credit can use it to help pay for school fees and increase teacher’s salaries. The teachers can use the Community Currency to pay for cleaning services from the mother or any goods and services in the network and it can keep flowing in a virtuous cycle. 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.

Another example - A typical business network surpass 200 accepting businesses within it's first year and includes several to a dozen schools as the centers of those networks. Teachers and headmasters have been guaranteed by other members in the network and registered as part of the trading network. Parents can pay for part of their student's various school fees with Community Currency which helps increase the salaries of underpaid teachers. Teachers then use the Community Currency in the community for goods and services of other participating businesses. Community Currency circulates in the community and eventually ends up back in the hand of parents who can use it for schools fees again. This way parents can pay for part of their children's education with their own goods and services, especially when they are lacking in Kenyan Shillings. School fees represent one of the largest uses of money for people in the community, so their acceptance of Community Currency is a strong boost for the local economy by allowing education to continue even when times are bad. Often parents aren't able to pay fees and their children get chased away from school or end up with a lot of debt. Community Currencies allows parents to pay with a small amount of credit backed with their goods or services to make up for what they are lacking in Kenyan Shillings. The teachers are getting more than they were before, and chasing away less kids.

Preparation and Development

A currency is something that can bring a community together and also something that can break it apart. A currency can be a beautiful circulatory system enabling trade and human connection, it can also act like a jail, promoting greed and scarcity. The standards under which a community currency is developed and maintained are the difference between these two realities. We urge groups interested in implementing a currency program to consider professional consultation at all stages of project development. The steps below are only a rough framework to give one an idea of what is involved and are based on implementations in Kenya since 2010.

Phase 1.

  • Identify Stakeholders.
    • Trainers: CC Course alumni and GE staff
    • Implementers: Lead facilitating organization iii)Partners, Cooperatives and other community groups iv)Focus group trainings
  • Assess capacity of stakeholder assets, businesses and network
    • Perform baseline analysis of community & Legal due-dilligence
    • Assess current levels of cooperation and trust in the proposed network iii)Assess backing businesses – whose goods or services form the CC collateral iv)Identify value addition to those businesses or new businesses
    • Identifying partners: Government Business – large scale employers, NGOs vi)Health Education Environmental
    • Develop long term plan with stakeholders
  • Backing Business(es) Development
    • Value addition / business creation.
    • Training new and existing group businesses on accounting and CC usage

Phase 2.

  • Capacity building Backing Business and Implementers
    • Ensuring the business is profitable and able to provide collateral in goods and services for all CC issued.
  • CC Public Launch
  • As these CC are spent at the backing businesses the accumulated CC are used for: Backing Businesses, Operating costs, Community Services and as additional Member credit.
  • CC Maintenance
    • Branding and marketing
    • Capacity building around leadership and skills
    • Training of various community groups and individual members
  • Member Credit
    • Members registered and trained from the business community. Receive a credit in CC that can be used among each other and also at the Backing businesses. *This is similar to a zero interest loan.
    • Member credit can be increased over time based on participation in activities and CC usage and should be linked to owning shares in cooperative businesses.
  • Community Markets
    • Bringing together people to trade using CC at existing and new weekly and monthly markets
  • Community Service Work
    • Together with local partners using CC to help mobilize and fund educational, environmental and health care providing services.
  • Operating Expenses of Backing Businesses
    • Backing businesses should have a clear policy on usage of CC to reduce their operating expenses through paying salaries, bonuses, rent, maintenance, stocking and so on.
  • Partnerships
    • We recommend government and existing health, environmental and social services and NGOs to convert their funds into CC, and support all activities.
The Sarafu Model

Asset Development Phase

  • Investment/Donation
    • From community, donors and/or investors
    • Investment in the form of bank transfer or (Sarafu-Coin) – initial coin offering (ICO) block chain enabled smart contract.
  • Key Asset Development and Construction:
    • Training on business efficiency and equity
    • Value addition, equipment, stocking, renovation, etc.
  • Operating Costs and Sales
    • Sales of products or services to non-local markets
    • Sales of products or services to local markets
    • Operating Costs in non-local markets
    • Operating Costs in local markets
  • Debt Repayment
    • Return on investment will be accelerated in the next phase.
    • For a donation debt repayment = Social Return on Investment (SROI) generally via community and environmental services.

Community Currency

  • Audit of capacity
    • The key asset value, debt, productive capacity as well as Community and environmental well being are assessed and valued in Sarafu-Credit.
    • This amount of Sarafu-Credit is issued to local businesses, schools and clinics as an interest free consumption credit.
    • This credit can be used as change, to pay school fees and can be accepted and used by anyone. It is backed by the cooperative in general (at everyone’s shops who received a credit), and finally always accepted for goods and services at the Key Asset.
  • Local Market creation and circulation
    • This credit fills a gap in liquidity and helps connect supply and demand. This creates a more stable local market, and increased networking, food security and trust
  • Local Sales of Cooperative products to community
    • The resulting profits are used for local operating costs as well as community services
  • Community Services
    • The community services are organized by the cooperative or partners and involve the whole community.
    • Education: School fees

Local Asset Ownership and Regional Markets

  • A limited amount of Sarafu-Credit and national currency can be converted to Sarafu-Coin and used to purchase externally owned shares at fixed rate.
    • This allows locals to be able to buy back shares from foreign investors and assists in debt repayment.
  • Sarafu-Coin (Shares of local assets) can also be traded in external markets via crypto currency exchanges.
 To get an idea of whats possible take a look of the benefits we've perceived through our programs:


Based on 505 businesses surveyed across 5 networks an average of 36.6% of sales are being accepted in Community Currency (survey done during 2nd trimester 2017):

Social Impacts:

  • Community Services: 57% of members (684) report Community Currency being used for environmental programs (such as trash collection and community gardens)
  • Willing to continue: 93% of members (1114) want the program to continue and increase the amount of Sarafu-Credit in the Community.
  • Education: 23% of members report using Sarafu-Credit for school fees (276 Students with increased education)
  • Trust: 77% of members say that trust in the community has increased.
  • Gifting: When asked “How much over the last month did you give (in money professional services and time) to support people or groups without expecting compensation?”
    • Non-using Groups averaged 191 KSH (equivalent) monthly
    • Monthly Community Currency Users averaged 855 KSH (equivalent) monthly
    • 347.48% Higher amounts of gifting for those using Community Currency

Economic Impacts:

  • Food Security: 6% of daily food purchases are being made by members using Community Currency
  • Job Creation: 17% of members report hiring new employees because of the program (206 jobs created).
  • Customers: 57% of members report increases to customers and 65% report increases to sales because of the program.
  • Member retention: overall we have issued a zero-interest credit to 1700 members totaling roughly 7200 EUR and retained 1140 members (95%).
  • Community Currency usage over time (average daily amount of CC Usage). We find the longer people are in the program the more Community Currency they are using.


Effective community currency networks develop income generating cooperative businesses that reduce the need for importing goods and services into the community. These businesses are incubated and flourish within a community market and in-turn help build greater market stability against volatile external shocks. Example cooperative import replacing businesses could include:

  • Supermarkets – Help created hubs for stocking local products,
  • Flour milling – Process local maize and other grains for consumption,
  • Oil pressing – Cold pressing coconut and other seeds to produce a local source of body and cooking oil,
  • Community farms and food gardens – Produce food locally using permaculture techniques,
  • Local transport – Help buy bicycles, hand-carts and motorized transport for local residents,
  • Local clinics - Offer needed services to people in the community,
  • Nursery and after-school services - Offer children a safe place to grow and learn,
  • Cooperative resource management - Such as grazing lands, water reserves and fuel wood forests can be managed and maintained using community currency.


Community Currency helps ensure children are getting an education by allowing parents to use their goods and services to pay for school fees when national currency is scarce. Community Currency is used to pay for tuition and other school costs and in turn goes to teachers’ salaries then out into the community for goods and services and then back to the schools again in a virtuous cycle. COMMUNITIES RECEIVE MORE SPONSORSHIP

Studies show that when trying to support people that need it most at a part of sponsors and government funds can go missing due to rampant corruption and embezzlement (1). Converting those funds instead to community currency, ensures that the community of beneficiaries will be the only people who can spend those funds. Besides the Community Currency being offered as a zero-interest credit to local businesses, sponsor funds can be issued to students, elders and clinics, where they can be then spent in a network of hundreds of shops and schools. This increases local trade and helps support the local community. (1) See for example a Tanzanian experimental study: Di Falco, Salvatore; Magdalou, Brice; Masclet, David; Villeval, Marie Claire; Willinger, Marc. 2016. Can Transparency of Information Reduce Embezzlement? Experimental Evidence from Tanzania. IZA Discussion Papers, No. 9925


The following categories form the basis for standards under which a community currency is developed and maintained. For each category below a clear implementation and maintenance plan should be established. The topics and questions below are based on community currency implementations by GE since 2010 in Kenya and not meant to be a full or general treatment on the topic.

Risk Management - Identifying and mitigating potential risks

  • Disaster mitigation, What are different types of disasters and worst case scenarios related to the currency system. Loss of trust, corrupt leadership, buy-outs by collectors, hoarding, outside interferance, etc.
  • Currency Security Features - What happens if our currency is counterfeited, or digitally hacked?
  • Transaction and Information Security - How secure is private information about community members?

Community Involvement - Without adequate community involvement, few programs are sustainable.

  • Implementation - At what stage is the greater community involved
  • Diversity - Are all parts of the community represented?
  • Co-creation and cooperation - Are community members an integral part of the creation and maintenance of the program?
  • Net Positive Community Impacts - Can the impacts of the program be felt by the greater community?
  • Behavior Change Communication - How are the community members mobilized and educated?

Legal Framework

  • Taxation - If registered and taxable business transactions are part of the program, how are they being accounted for using the Community Currency?
  • Country specific laws - Are vouchers or promissory notes transferable in your country? What regulations must you follow to uphold existing laws?


  • Administration - Is there adequate local administrative skills, and do these administrators have the backing of the community?
  • Collaborative decision making - How involved is the community in the decision making process?


  • Locally Appropriate Solutions - Is an alternative means of exchange going to solve local problems? Is the program being implemented to solve problems or
  • Are Flexibility, Adaptability, Practicality and Innovation thriving in your system?
  • Maximum or minimum - Debt levels - How do you determine how much of the currency should be created and issued?
  • Backed by national currency or resources - Is it a voucher with a value backed by the national currency? How does it derive it's value? Does it's value change over time? Does it expire? How is it renewed?
  • Exchange Rates - Is the community currency exchangeable with other currencies? On what basis?
  • Fungibility - Does the currency allow any grouping of goods and services to be traded easily?

Economic Viability

  • Independence - How much local vs non-local goods and services are part of the network? How dependent is the community on inports and exports. How dependent is the community currency on official money?
  • Market Diversity - Is there a critical mass in number and type of goods and services being offered for fluid transactions to take place?
  • Resilience - How resilient is the currency to changes in the market and other risks?
  • Cost Recovery - What are all the setup and maintenance costs and how will they be paid for? How much of these costs can be paid int he community currency vs the National Currency?
  • Net Positive Economic Impacts - Can you quantify and verify both the positive and negative impacts of the program?
  • Marketing - How well to people identify and trust the community currency? What modes of marketing are you using?
  • Interoperability between systems - If a neighboring community starts a program in your region will the two currencies be exchangeable? Will they have the same value?

Professionalism - As much as these are community initiatives, they are can become key parts of the communities ability to function and need serious professional standards to keep them going.

  • Accounting and Financial standards - Are accounting and financial standards being kept? Will an auditor be able to verify these records?
  • Transparency / Information sharing - How much information does the community and local government have about how the program works and its daily usage?
  • Effectiveness - How effective do people find trading in a community currency?
  • Efficiency - Does this program offer an advantage over existing means of exchange, credit/debt?
  • Exchangability - Is the currency being traded for all sorts of goods and services, rent, schools fees, taxation?
  • External auditing - Who is auditing your books and verifying that all of the currency issued is properly backed? What third party can assess your currency usage and activities and report to local government, registrars and the greater community?
  • Training - Are your administrative team and members adequately trained?
  • Baseline projections - How aware are you of the situation before you start a currency program?
  • Values and Goals - Are the values and goals clear for the community?
  • Management Capacity - Do you have the local capacity to manage such a system?

Technology and Monitoring

  • Software, mobile phone systems - What are the short and long term costs for technological solutions and how are they going to be paid for?
  • Record keeping and statistics - Will you be able to say after several years of the currency being traded, if it has really benefited the community?
  • Impact assessments - Are you getting enough information to assess impacts on a regular basis?

Terms and Conditions



The purpose of the following Trading Procedures, Policies, Rules and Regulations is to facilitate trading among members of Organizations by promoting a system of good business practice and understanding of the guidelines set forth by various trading networks and organizations that work together with Grassroots Economics Foundation (GEF) Sarafu-Credit (SC) Programs, an entity of GEF, hereinafter referred to as SC Trading Network. These Trading Procedures, Policies, Rules and Regulations also form part of and are included in any voucher or community currency verified, digitally created or printed and allocated by SC Trading Networks, including but not limited to: all Community Currency Programs, Bangla-Pesa, Gatina-Pesa, Ng'ombeni-Pesa, Lindi-Pesa and Kangemi-Pesa.


An orgnaization applies for an audit and verification with GEF. This applicant is hereinafter referred to as Client. By signing the SC Trading Network Agreement, Client agrees to abide by these Trading Procedures Policies Rules and Regulations contained herein. SC Trading Network acts as a facilitator for the development of a trading network and auditor of all vouchers issued to the client. Client is a legal entity that has contracted with SC Trading Network to trade its goods and or services among its members and wishes to be issued vouchers to facilitate barter trade exchange services.


A ‘trade’ is a purchase or sale of goods and or services whereby payment is made in SC Vouchers pursuant to the terms contained in this Agreement. A SC Voucher is an accounting unit used to record the value of a trade – one SC equals one Kenyan Shilling of the value of the trade. Ownership of SC denotes the right to receive goods or services available within the SC Trading Network Marketplace. SC may be used only in the manner and for the purpose set forth in this Agreement; SC will not be considered legal tender, securities or commodities and may not be redeemed for Kenyan Shillings. SC Trading Network disclaims responsibility for the negotiability of SC or for the availability of goods and services from any source.

SC Vouchers are issued with an expiration date or maturity period called the term. At the end of the term all SC used by the member must be returned. Failure to return SC will result in a debt of the member to the Client plus service fees not exceeding 10% of the amount. If at the end of the term a member holds more SC than was allocated, this extra SC is considered a claim against an equal value in Kenyan Shillings of the Client, and my be purchased by indebted members or the Client organization.


As a responsible third party record keeper and auditor, SC Trading Network facilitates the development and operation of peer-to-peer Client's mutual-credit clearing systems. Each client is audited for the number of members that qualify for a SC Voucher allotment. This verification process involves a questionnaire and the establishment of local guarantors for the new Client member. The amount of SC Vouchers allocated to the Client depends on the size and types of members therin. The vouchers issued are to be used as the vouchers of each businesses among the client.


SC Trading Network serves in a trade coordinating capacity in organizing and facilitating trade among Clients and members of Clients. Responsibility for the conduct of a trade is exclusively that of the Clients and members of the Client participating in the trade. The duty to inspect goods for quality and quantity and fitness for purpose, to evaluate the quality of services, or to obtain or act upon any warranty rests upon the buyer Client. SC Trading Network will use its best efforts to broker the Client’s SC into goods and services, to accurately record trades, and to administer Client agreements and trading rules in accordance with their terms. However, Client acknowledges that the sole principals in any trades are the buying and selling Clients involved, that the trades are entered into voluntarily and that SC Trading Network is not the guarantor of any product, service, trade or SC. SC Vouchers are ultimately and fully backed by the assets, goods and services of the Client.


SC Trading Network or its owner entities may maintain an account in the system and transact business through the network and agree to abide by the same terms and conditions of all Clients. Any SC Vouchers associated must be audited, allocated and maintained using the same criteria that are applied to all Client accounts. Such Clients shall have no privileged access to goods or services or special treatment.


SC Trading Network shall use its best efforts to solicit new businesses as Clients, having goods or services to satisfy the needs of all Clients. Because of high Client demand and short supply, certain items may be available on a limited basis only (i.e., appliances, TVs, furniture, airline tickets, tires, computers, cameras, lumber, etc.). SC Trading Network is committed to showing availability of those products or services actually available in the exchange system.


A Client and all client members who conduct trades in accordance with this agreement, is current in any monies owing to SC Trading Network, and has a valid unexpired SC Vouchers, is considered, a ‘Client in good standing’. Only Clients in good standing are entitled to the services of SC Trading Network. However, the status of a Client in good standing shall not constitute any representation by SC Trading Network regarding the reputability of any buyer or seller in any trade transaction and SC Trading Network shall have no liability for the conduct of any Client or the quality of goods or services traded. Where a Client has by his or her conduct or misconduct displayed to SC Trading Network inability to meet the standards set in Client’s own industry relative to the quality of goods or services, or has been charged with the commission of a crime involving fraud or moral turpitude, or otherwise exhibits to SC Trading Network that Client’s reputation in the business community has been diminished, then for the protection of the remaining Clients, GEF reserves the right to terminate said Client’s account or restrict the rights of said Client to sell or advertise Client’s goods or services for sale until such time said Client can exhibit to SC Trading Network that the standard expected in Client’s own industry can be met.


  • Membership Changes
    • The Client must keep GEF informed as the the registration of new members and removal of members. Each Voucher issued must be 100% backed by the goods and services of the Client and the clients members.
  • Credit-Clearing
    • Definitions
      • Indebted members are those who have used their SC to purchase goods and or services and have not been able to re-accept SC of equal or greater value than which was spent by the end of the term in which the SC was allocated.
      • SC Debt is the difference in SC balance at end of Term and Original Allocated SC balance.
      • Claim Holding members are those who have a higher balance of SC, due to sales of goods and or services, than is higher than the SC was allocated. These members hold claims valued in Kenyan Shillings on any matured SC they own higher than their original allocation.
      • Excess SC is the amount of matured SC above which was allocated.
    • Ensure that at term limits all Indebted members holding less SC than issued at term beginning pay back these debts by:
      • Offering goods and services for Sarafu-Credit
      • Using any savings of the member in the chama
    • Ensure that all Claim Holding members' excess SC , is replaced with Kenyan Shillings or assets of equal value by:
      • Offering debt repayments from members to purchase excess SC.
      • Offering any chama funds to purchase excess SC.
      • Use of GE's Collateral Fund:
        • In the event that the Client and it's members are not able to clear excess SC claims. GE will offer to purchase claims on matured SC when sufficient funds are available. GE is not a deposit taking organization but will endeavor to use it's own funds as a collateral account equal to at least 10% of the amount of SC in circulation with BN members.
        • In the event that GE's collateral fund is used to purchase matured credits, the BN is responsible to pay back the used collateral within the next month. BN will collect these funds from members or from existing assets or accounts and use these funds as a payment for the service. A service fee of 10% of the collateral used will be charged on a monthly basis for outstanding BN debts to GE.
        • If GE's funds are not returned after three months, GE can no longer act as the collateral fund and will no longer be able to issue credit securely and will terminate the agreement. Any outstanding debt will be perused via legal channels.


In the event the Client has not informed GEF of changes of membership beyond sixty (60) days, Client agrees to waive all rights to Client’s usage of any CCs in amounts greater than their initial allotments. In default each member of the Client should return the amount of SC Vouchers initially allotted to them. At the discretion of SC Trading Network, an account closed for lack of transparency may be re-opened within one hundred and eighty (180) days and Client may reclaim the trade Vouchers.


Client may elect to donate SC Vouchers to a qualified charitable organization or individuals. A ‘qualified charitable organization’ is an organization with charitable status as granted by the Kenya Revenue Service and which is or has agreed to become a Client of the SC Trading Network. SC Trading Network agrees to facilitate the donation by allocating Clients’ Vouchers, but the donation will be deemed to be from Client to the charity and Client shall have sole responsibility for ensuring any tax deductibility of the donation and the charitable status of the organization. SC Trading Network or the Client shall make the transfer of donated trade Vouchers upon written notification by Client stating the amount of the trade credits to be donated and the name of the qualified charitable organization designated to receive the donation. Any required receipts for the donation shall be issued directly by the charity to Client.


Client shall abide by all applicable laws or regulations appropriate to the conduct of its business and any trading transaction and SC Trading Network shall not be responsible on the part of Client to comply. Client shall hold SC Trading Network harmless for any action SC Trading Network takes to comply with the applicable laws or regulations.


The buying Client shall pay all tips and gratuities in cash at point of purchase. SC Trading Network will not keep any record for tips and gratuities payments.


Seller shall charge the appropriate sales taxes or VAT in cash, and collect and record these on the invoice at the time of sale. SC does not collect sales taxes on members' behalf. Clients are advised that transactions involving SC Voucher are generally treated as taxable events for Kenya Revenue Authority and Local tax purposes. The declaration and reporting of all applicable Local, County and National taxes resulting from trade transaction rests solely with the Client. Client agrees to not hold SC Trading Network liable for any actions SC Trading Network takes to comply with Kenyan tax law.


A Client’s account is not assignable or transferable to any person, third party or businesses without SC Trading Network express prior written consent. If clients/company assets/goods or services being used as security against any SC loaned are no longer available, sold, or the company itself is sold or merged with another company, SC Trading Network will withdraw the allocated SC Vouchers or call for repayment on demand (see clause 26 Termination). If a Client ceases trading for any reason, any goods or services that have been purchased which results in a Client having a balance in Vouchers less than their initial allotment (negative balance) remain secured to SC Trading Network until the negative balance has been reduced to zero. The SC Vouchers may not be advertised for sale without SC Trading Network express prior written consent.


Client agrees to furnish all goods and services at Client’s normal prevailing prices. SC Trading Network reserves the right to investigate complaints of overpricing, i.e. where seller is charging a higher price for goods or services sold on SC Vouchers than normal terms. Violations may result in termination of Client’s account.


A Client can request in writing to SC Trading Network that their account be placed on ‘standby’ in the event that they wish to temporarily suspend trading within the network but not terminate their account. An account may be placed on standby under the following conditions: 1) Client account must have a positive trade credit balance (equal to or higher than their starting balance in SC Vouchers).


SC Trading Network reserves the right, at its sole discretion, to suspend the trading privileges of any Client who:

1) Commits fraud against SC Trading Network or any other Client. Fraud shall include furnishing false information to SC Trading Network in this agreement or SC Trading Network vouchers application, which Client warrants is accurate to the best of its knowledge.

2) Violates the terms of this Agreement or any other agreement with SC Trading Network.

3) Has outstanding cash fees due to SC Trading Network which are more than sixty (60) days past due.

4) Client who has a negative trade balance (purchases exceed sales), who does not promptly respond to requests from other clients purchase inquiries will be interpreted as a refusal to repay the trade credit loan.

5) Behaves in a manner that is detrimental to the SC Trading Network and/or fellow Clients. Such detrimental behaviour shall include abuses of the Client list, including spamming or the unauthorized release of Clients information to third parties.

6) Conducts trades of illegal or prohibited items. Prohibited items shall include firearms or other weapons, illegal drugs, drug paraphernalia, prostitution, and pornography. SC Trading Network reserves the right to amend the list of prohibited items at its discretion.

7) Violates the terms of confidentiality contained in this Agreement by disclosing online trading system information or by failing to take reasonable measures to protect such confidential information.

8) Ceases to be a Client in good standing in SC Trading Network.

9) Clients reputation rating as a buyer or seller does not meet minimum standard as set by SC Trading Network.

In the event of such suspension, SC Trading Network shall give written notice to Client and Client shall immediately cease the use of the trading system.


Either party may terminate this agreement, with or without cause, upon ten (10) days written notice to the other party. Upon termination, all cash and trade credit service fees outstanding become due and payable; transaction fees are non-refundable. If Client has a negative SC balance (purchases exceed sales) at the time of termination, Client must balance the account with trade credit within thirty (30) days of the termination date. If any negative trade balance remains after the thirty (30) day period, Client shall immediately pay SC Trading Network any remaining balance in cash. Failure to repay within the required time-scale will result in immediate legal proceedings being instigated to recover the debt in cash Kenyan Schillings (KSH) and any legal costs incurred. SC Trading Network reserves the right to transfer the debt to a Debt Collection Agency. If Client has a positive SC balance (sales exceed purchases) at the time of termination, Client may stay active for a period of thirty (30) days for the purpose of making purchase trades only until purchases equal sales by paying SC Trading Network in advance the cash service fees on the positive SC balance, until SC Vouchers are spent. Any positive SC Voucher balance not spent within thirty (30) days of termination shall be forfeited by Client and will be considered forfeited.


SC Trading Network may, in its sole discretion, change the Trading Procedures, Policies, Rules and Regulations and reserves the right to change the annual retainer fees and transaction fees from time to time by giving Client thirty (30) days prior written notice. Failure to give SC Trading Network written notice of rejection of such changes within such thirty (30) day period and engaging in purchase or sales transactions after such after thirty (30) day notice period shall be deemed as acceptance by Client of the new terms. All changes to this agreement must be in writing and must be signed by an authorized representative of SC Trading Network.


SC Trading Network makes no representation or warranty either expressed or implied and disclaims all liability as to the fitness, quality, delivery date, merchantability, prices or any item of the trade transaction. Client does hereby indemnify and hold SC Trading Network harmless with respect to any claim, debt, or liability whatsoever, arising out of any transaction wherein Client is buyer or seller. Client acknowledges that any trade transaction in which it participates is strictly voluntary. Client further agrees to hold SC Trading Network harmless for any liability whatsoever arising out of the use, administration or operation of the trading network.


SC Trading Network is functioning in a trade coordinating capacity, and as a third party record keeper, is to be held harmless from any liability arising out of transactions between Clients. In the event of any dispute arising out of a transaction between Clients, the parties seeking resolution shall refer the dispute to binding arbitration under the rules of the Kenyan Arbitration Association within twenty-one (21) days of the receipt of the goods or services or the commencement of the dispute. The decision of the arbitrator(s) in such dispute shall, unless waived by both parties, be referred to a court or whoever has jurisdiction in the matter and entered into judgment.


Each and every term and provision and every last term and provision contained in these Trading Procedures, Policies, Rules and Regulations is severable from every other term and provision therein. If any such term or provision shall be judged invalid, illegal or unenforceable, it shall not affect the validity, legality or enforceability of the remainder of any other term or provision of these Trading Rules and Regulations. The remainder shall remain valid, legal and enforceable and in full force and effect. In the event that legal action must be taken by SC Trading Network against a Client to enforce any provision of these Trading Procedures, Policies, Rules and Regulations, SC Trading Network shall be entitled to recover solicitor’s fees, costs and late fees of $20 per month from the date of default until payment.


Unless otherwise stipulated between the parties to this agreement, Client authorizes SC Trading Network to notify and advertise to other Clients the availability of Client’s products or services.


The following procedures apply to transactions involving special orders, construction jobs, service work, long term leases and other work-in-progress transactions: 1) Client should obtain a written estimate before authorizing work to begin. 2) Before starting, Client should obtain a deposit or down payment in Sarafu-Credit, with an online or SMS confirmation and authorization number, or with a physical trade voucher (if one is used) in the same manner as a cash transaction.


Client acknowledges that, as a Client of the SC Trading Network, it will have access to information and materials that are confidential and proprietary to SC Trading Network or other Clients of the network. Client agrees not to disclose information about the credit-clearing software, Client account data, Client contact data, Clients list or Clients’ email addresses to any person or entity except to other Clients or those specifically authorized by SC Trading Network to have access to this information. Client also agrees to take reasonable precautions to safeguard the confidentiality and security of such information.


If this application is accepted and an account is opened for the Client in SC Trading Network, the Client and the individual signing for the Client hereby assume joint and separate responsibility for all purchases and fees as outlined in this agreement.


In the event that SC Trading Network terminates or otherwise ceases to do business, all Clients in a negative trade position will pay amounts they owe in cash (one trade Voucher being equal to one Kenyan Shillings) into a fund. The fund, less expenses, plus any SC Trading Network inventory will be distributed pro rata to all Clients who are in a positive trade position. Thus, all Clients in a positive position will receive cash and/or goods for their trade dollars to the extent that the funds permit. SC Trading Network shall not be liable to any Client’s cash or trade Vouchers beyond the distribution of such funds as aforesaid. Cessation of the SC Trading Network’s operations does not release any Client from liability to make any payment due to SC Trading Network at the time the SC Trading Network ’s operations cease.

28. LAW

In the event of any legal disputes arising from these Trading Procedures, Policies, Rules and Regulations the Laws of Kenya shall apply. All transactions using SC Vouchers should be considered as barter trade.

1. Central Bank of Kenya Act Cap 491 - S.21 states that : "All monetary obligations or transactions entered into or made in Kenya shall be deemed to be expressed and recorded, and shall be settled, in Kenya currency unless otherwise provided for by law or agreed upon between the parties"

The highlighted part in section 21 above gives parties in a transaction the leeway to decide what "currency" to use when transacting Consequently , it is my belief that one can chose to use Kenyan currency , Foreign currency or barter for goods /services so long as the parties are in agreement.

2. Interpretation and General Provisions Act Cap 2 - S.3: This Act defines the word sell as follows : “sell” includes barter, exchange and offer to sell or expose for sale.."

From this and other statutes examined , barter trade is envisaged as part of normal trading .i.e. a normal buying and selling transaction in the Kenyan market.

None of the Statutes reviewed expressly prohibits or deems barter trade as an illegal activity

Conclusion: Barter Trade is a legal method of transacting between parties . In my view therefore, an illegality will only arise where the Foundation attempts to counterfeit currency - which is an offense with very steep penalties under Kenyan law ( See Penal Code - Cap 63). Also note that usage of Bangla-Pesa an example SC Voucher was deemed not illegal under the CBK or KRA act by the office of the D.P.P. See his comments here.


Client acknowledges that they have read the currently effective Trading Procedures, Policies, Rules and Regulations, and that such Rules and Regulations may be changed by SC Trading Network from time to time in accordance with these Trading Procedures, Policies, Rules and Regulations. Client warrants that it provided all information to SC Trading Network in good faith and that such information is accurate to the best of its knowledge.


SC Trading Network is only responsible for any commitments and representations made in writing by a duly authorized officer. Brokers, agents, or employees of SC Trading Network have no right to bind SC Trading Network to any obligation or representation whatsoever without such written authorization.

Sarafu Credit Community Currency User Guide (FAQ)

  • What is Sarafu-Credit?

Sarafu-Credit is a voucher for goods and services of Sarafu-Shops and participating organizations, schools, shops, farms, and clinics. Sarafu-Credit acts as a local means of exchange (money) that does not replace but rather supplements (tops-up) lacking Kenyan Shillings. Through increasing trade by matching unmet local needs with under-utilized local resources Sarafu-Credit enables sustainable economic, environmental and social development programs. Sarafu-Credit is a voucher worth the same amount in Kenyan Shillings of goods and services. Sarafu-Credit is a mutual credit, which means that it is fundamentally backed by the community, i.e. individual members’ own goods and services. As an additional collateral source cooperative businesses are developed, which also allows for the growth of the trade network.

  • How do people get Sarafu-Credit?

People receive Sarafu-Credit: As a zero-intrest loan. For community service work. As payment or change for goods and services. As a top-up.

As a zero-interest loan - Sarafu-Credit may be loaned to members of local organizations. Potential members fill out a detailed registration form after they are deemed credit-worthy by running a local business and being guaranteed by the chama organization. After reviewing your application, a committee may accept or reject your application. You can use the Sarafu-Credit to trade goods and services among members. You need to accept Sarafu-Credit for your goods or services, in order for Sarafu-Credit to help the community. Loans should be renewed each month during chama meetings. Members that have not been able to renew their Sarafu-Credit in a month are in debt to their local organization and the community.

Community Service work - Participating non-profits, NGOs and other organizations may wish to support their activities by rewarding volunteer efforts with Sarafu-Credit. Organizations may support needy children with school fees, or encourage youth to plant trees and protect the environment. Sarafu-Credit given in this way can be used at participating shops, schools and so on.

As payment or change for goods and services - anyone may use Sarafu-Credit to pay for goods or services or offer Sarafu-Credit as change. This is considered as a form of barter and should circulate around the community to increase trade.

As a top-up - when the participating member is not able to renew their monthly loan, and in debt to the local organization, he or she has to top-up his credit using Kenyan Shillings.

  • What benefits can I expect from Sarafu-Credit?

It will enable you and the community to meet daily needs during the hard times of the month and year(food, rent, transport, school fees). It will enable you to increase your daily sales and customers; and to save more Kenyan Shillings. It will create a strong community network and market (allowing people to meet, share ideas, trade goods and services and to launch group programs and initiatives). You can also take part in community events to receive Sarafu-Credit and you can also ask for change in Sarafu-Credit. Any Sarafu-Credit you have after repaying your loan can be use to purchase from the Sarafu-Shop. Members are invited to open-air markets where they can trade with each other.

  • Why is it important to keep Sarafu-Credit moving?

The faster Sarafu-Credit moves between members, the more it helps develop the local economy. If it stops moving, it stops helping people trade. As much as you use Sarafu-Credit you should accept it back into your business.

  • How do I renew my Sarafu-Credit loan?

Try to buy using Sarafu-Credit each day and try to sell your goods with Sarafu-Credit each day. Balance your purchases and sales. Use Sarafu-Credit to give change and accept Sarafu-Credit as change when you buy from members. Use Kenyan shillings to top up the amount missing from your loan.

  • Who are my guarantors?

Your guarantor is an organization, CBO or self-help group that endorses you to receive a loan of Sarafu-Credit. If you do not repay your Sarafu-Credit loan, your guarantor may use your savings to or, eventually, expel you from the trade network.

  • How much Sarafu-Credit should I keep?

As a member you should keep about as much Sarafu-Credit as you were loaned. In one term (generally one month), your balance may go up and down but on average you should have as much Sarafu-Credit as you started with by the end of the term.

  • What should I do if I have too much Sarafu-Credit?

If you receive more Sarafu-Credit than you are able to spend, you might end up with too much. You can solve this problem by: Find businesses to buy from using Sarafu-Credit. Giving Sarafu-Credit as change to your customers. Contact your backing organization and explain the situation. Use your Sarafu-Credit at your nearest Sarafu-Shop.

  • What should I do if I have too little Sarafu-Credit to renew my loan?

You are in debt to the community! By spending your Sarafu-Credit you have received a loan of goods and/or services from other members. In order to repay this debt, you must accept Sarafu-Credit back for your goods and services. You can easily solve the problem:

You need more customers with Sarafu-Credit. Advertise yourself to more members. If no one is buying your goods and services using Sarafu-Credit: a) Contact your guarantors or chama b) Buy goods and services from members in Kenyan Shillings and accept change in Sarafu-Credit

Note that at the end of the term (usually one month) you will be required to pay back in Kenyan Shillings whatever you are missing. If you have savings at the chama, these might be used for repayment of the debt. Repaying your debt means that your Sarafu-Credit level will be topped up again to your initial loan amount. This is needed to ensure liquidity in the community.

i.e. If your loan was 400 Sarafu-Credit and you have a balance of Sarafu-Credit is 350 at the end of the term, you will pay the chama 50 Kenyan Shillings, in return you will receive 50 in Sarafu-Credit as a top-up.

  • What is a Sarafu-Shop?

Sarafu-Shops are those shops run by Grassroots Economics in collaboration with community groups that provide the backing for Sarafu-Credit. The inventory and profits from these shops determine how many Sarafu-Credit vouchers can be issued to a community. Sarafu-Credit can be used for any purchase from a Sarafu-Shop.

  • What is the directory and what are its benefits?

The directory is the list of all active members using and accepting Sarafu-Credit. It helps people know where to spend Sarafu-Credit and for members to know each other. The directory of active members is displayed at your local Sarafu-Shop.

  • What should I do if other members are not accepting Sarafu-Credit?

Make sure the member understands the program; they might not understand how to price their items using Sarafu-Credit. Give the person a chance to explain why they are not accepting it and come back another day. If the member has too much Sarafu-Credit already, help them find a way to use it. If all else fails, contact their chama (they may need to be expelled from the network).

  • How should I price my goods and services in Sarafu-Credit?

You can accept as much as you can use. It is up to you to make sure that you can use all the Sarafu-Credit you receive. As you being, for every Ksh.100 you could accept 10 Sarafu-Credit. For service shops, like barbers, you can charge as much as 50% of an item price in Sarafu-Credit.

  • How do I get a loan in Kenyan Shillings?

A Sarafu-Credit loan is a loan of vouchers for goods or services which you pay back with your own goods and services when you accept Sarafu-Credit. To get a Kenyan Shilling loan, you must save Kenyan Shillings in the group/chama account and apply for a loan from the group itself or a bank By using Sarafu-Credit more, your business should have more customers and more stability and hence be more deserving of a loan.

  • If my supplier isn’t a member, how can I buy my supplies and stock with Sarafu-Credit?

If your supplier isn’t a member explain to them the benefits of the program and give them 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 in addition to Sarafu-Credit to buy your stock. Ultimately it is up to the Sarafu-Credit user to make appropriate business decisions.

  • Is Sarafu-Credit legal?

On August 23rd 2013, Bangla-Pesa was deemed by the Director of Public Prosecution in Kenya to not have broken any laws. The Sarafu-Credit programs are under the supervision of Grassroots Economics and in coordination with the local government. Community Currency (which are vouchers equal in value to National Currency), will be issued per member of a registered Kenyan organization. Future issuance will be in coordination with the business network and available backing.

  • When do Sarafu-Credit Expire?

Sarafu-Credit vouchers each have an expiration date. After or the month before the expiration date members in good standing and no debt may turn in their vouchers at the nearest Sarafu-Shop for vouchers with an extended expiration date. Any expired Sarafu-Credit are no longer valid and should not be accepted at the Sarafu-Shops or by any members.

Test your Knowledge with the Sarafu-Credit Quiz below


1. How much Sarafu-Credit are members first loaned?

(a) 100 (b) 200 (c) 400 (d) 500 (e) depends on the member

2. How many Shillings did you pay to receive a Sarafu-Credit loan?

(a) 0 (b) 100 (c) 200 (d) 400 (e) or more

3. When can you exchange Sarafu-Credit for Kenya Shillings with a fee?

(a) End of the month (b) After you have repaid your Sarafu-Credit loan (c) Never

4. What is the value behind 50 Sarafu-Credit?

(a) Ksh.50 (b) Ksh.45 (c) Ksh.55 (d) Ksh.50 worth of members’ goods and services

5. What does it mean if you have extra Sarafu-Credit after repaying your loan? (mark all that apply)

(a) I have more Sarafu-Credit than I started with (b) I need to sell more products for Sarafu-Credit (c) I should be buying more goods and services with Sarafu-Credit.

6. What does it mean if you don't have enough Sarafu-Credit to pay back your Sarafu-Credit loan? (mark all that apply)

(a) I have too little Sarafu-Credit and am in debt. (b) I should be spending Sarafu-Credit it as fast as possible (c) I have received goods and services from members on credit and need to repay the debt. (d) I need to sell more products for Sarafu-Credit.

7. How do non-members use Sarafu-Credit? (mark all that apply)

(a) Choose to accept it as change from members (b) Never get to use it (c) They can accept it voluntarily as payment for work or community services.

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

Additional Resources

Municipal and County Finances

Without going into debt or relying on national allotments how can local governments fund local development? Local governments typically loose over 50% of their potential tax revenue through informal business activities. Community Currencies offer a way for local government to work together with the informal and formal sectors. Grassroots Economics pulls together hundreds to thousands of informal businesses in an area under the umbrella of a business network.

This business network monetizes the excess capacity of the community in the form of a rotating voucher or community currency that is backed by local production. This community currency facilitates trade when national currency is scarce and can increase sales revenues by more than 25% in only a few months of implementation. The business network also collects a membership fee in the community currency which acts as a community fund. This fund is dedicated toward community and municipal services and is a key tool for local governments.

The local business network can create large sums of community currency vouchers, which can be used to purchase anything in the community. The municipal government could use these resources to fund local labor for a myriad of purposes. Similar to social impact bonds, community currencies allow a local government to have access to the capital needed for local development. The ability of these programs to vitalize regional economies has put them in the spotlight as a key tool for social and economic development. By creating a circulating credit, backed by local goods and services, municipalities can reduce unemployment, increase the tax base and increase trade. Local goods and service providers in regional districts are brought together into a registered business network. Each business member is guaranteed by other members for an initial amount of credit. These credits are printed as vouchers for goods and services and usable at any member of the network. Businesses are encouraged to accept the credits as a percentage of their sales in shillings. A percentage of these credits are collected by the municipality 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 2010 Grassroots Economics' founders implemented their first complementary currency project in Kenya, which accomplished health and environmental aid objectives in a Kenyan slum, collecting 20 tonnes of trash and planting thousands of trees. The pilot program confirmed that health, environmental and economic issues could be addressed simultaneously and successfully through the introduction of a complementary currency.

Community Currency Flow Maps

A community's ability to share resources and skills is one of their primary life support systems that make them sustainable and adaptable. An example local flow between Sally's fish to Kevin's matches, to Marcy's hair salon, to Jim's repairs and back to Sally's fish – is part of a life supporting - resource distribution system.

This system of interconnected nodes (producers and consumers (prosumers)) forms a security web over the community. When one node has trouble (like the fish season is over) and Sally is no longer trading – there is a hole in the community web. How fast the community, and Sally can recover is a key to adaptability.

Establishing and strengthening a network of local flows – is like creating a network of highways – over which resources are reliably distributed. The highway can have lots of different goods and services virtually traveling over it (represented by community currency) – and goods and services can take many different paths. Businesses in large cities can often think of their customers as a one time client, but the flow of their money for the businesses goods or services is the beginning of a chain of subsequent interconnected purchases. With a community currency that money will continue to flow through the area indefinitely. Hence these paths and trades are different from what one might see as by-chance clients in a city, but much more like a continuous highway and stable resource distribution system.

This map of highways – are like the veins and arteries of the community bringing important nutrients to all parts of the community so it can thrive. So as we make a map of currency flows between community members, we are visualizing the beginning of this stable resource highway. The adaptability, efficiency and sustainably of this highway can have the following example measures: - Interconnectedness - the more ways there are for goods and services to reach each other – the more resilient the community is are to various market problems. - Velocity of money - The faster goods and services can flow the faster they can react to community needs. - Diversity – the more types of goods and services on offer in the community by many types of businesses, enables a more rich fabric to life and again the ability to weather losses. This resource distribution system – is loosely a part of what we call and economy: “An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location”

In today's markets these distribution channels are overly determined by an artificial abundance or scarcity of money, rather than a community's production and needs. Hence local economies suffer from a lack of interconnectedness and a dependence on foreign markets, and are prone to failure and extreeme volatility. Hence the local path from Sally to Kevin to Marcy to Jim and back to Sally is a path we want to see made visible so that it can be stable, encouraged and reinforced.

Community Currency Game

This game is a fun and practical simulation to explain how a community currency works and discuss issues surrounding them. It has been in use since 2010 with some modification. It is used in the first stages of implementation - but can be good to do shortened versions (without the barter section) at regular meetings and outreach events.

  • Time: The game should take roughly 1.5 hours.
  • Participants: It is geared as an introduction to community currencies for local businesses (local producers and consumers = prosumers), but could be used with some modification for other interested groups. The game can work with a minimum of 5 businesses and up to 30 businesses comfortably. If the group is much bigger you may break them into smaller groups or choose a set of people to do the game in-front of everyone.
  • Materials: Each participant will need:
    • A pen or pencil
    • 10 item cards - these can be blank paper (of a different color than the game currency). For non-business groups you can pre-write goods and services on them (see below)
    • Colored paper to represent the community currency. Use several denominations 5, 10, 20 and 50. These represent the equivalent in National Currency. These can be as fancy as you like. The participants should be encouraged to think about the physical design and name of the community currency. Each participant should get an equal amount of community currency and it should be enough to satisfy a day to a week of typical purchases in the community. The denominations as well as the amount of currency per participant depends heavily on the area and demographics of the participants.
    • Flip-chart and chart markers - to keep track of pros and cons and discussion items.
  • A: Introduction ~15 minutes
    • Each participant should say a little about themselves, what they sell and where they are located.
    • Ideally move people in the room to be situated spatially based on where their business is in relationship to eachother (neighbors sitting by neighbors). The development of a community currency involves a lot of local awareness and interaction in neighborhoods and with neighbors.
  • B: Barter Exchange ~30 minutes
    • The premise is that one day there is no more money in the community because of some disaster. So what would happen if we had to trade with our goods and services via barter directly?
    • Goals:
      • To get the participants to realize how much abundance there is in the community and also the importance of money.
      • Also to establishing relative value with their goods and services – i.e. the value is in the goods and services – not 'money'.
    • Each participant is given 10 cards to represent their goods and services. (reduce this to 5 cards if time is limited).
    • On each card the participants are to write the name of the good or service - The quantity / amount of that good or service - and the cost for that quantity or amount. Finally their business name or personal name (If the participant is not a businesses and would still like to take part - you can have a set of pre-written goods and services for them to sell)
    • Each card should represent one commonly sold good or services. If someone sells fish by the fish at 10 dollars only, they can have 10 cards that say '$10 fish'.
    • After finishing writing, the participants are given 15 minutes and asked to trade everything they have for goods or services that they want. They are asked to think about the things they need over a week. (or use a theme -see below-)
    • Afterward everyone needs to sit down (this can be hard sometimes, so it is nice to have a timer)
    • Discussion:
      • Each person takes a turn reading off what they have bought and also their experience.
      • Each person is asked to remember who they traded with.
      • What were the benefits and challenges?
      • The importance of trust here is very important. When do people feel comfortable with barter. What about IOUs or layaway?
    • Wrap up: Everyone is asked to return the goods and services they bought. So they end up with their original cards and are ready for the next part.
  • C: Community Currency ~45 minutes
    • Premise: In the previous exercise we saw some of the challenges we would have without money. What if we wanted to re-create money in this community – and it could only flow between these members?
    • Goal: Simulate a community currency and identify strengths and weaknesses.
    • The group must all agree that they trust each other and are going to form a businesses network (for the purpose of the game) In reality each new member must be guaranteed by at least four other members.
    • Each participant in the room they are 'allocated' X Community Currency (we use 400 in Kenya). These are worth the equivalent denomination in National Currency. It is important to note that this currency is a voucher for the participants goods and services (the amount issued should be equal to the average value of goods and services of the player in part B).
    • Explain that for each of these community currencies / vouchers the businesses uses - they are accepting to redeem them at a later time. (When they use it to buy something, they are also agreeing to sell their goods and services for the vouchers later on.)
    • Each participant is also asked to contribute an amount of vouchers toward a community fund (which will be used later).
    • They are asked again to try and sell all of their goods and services. They are asked to think about the things they need over a week. (or use a theme -see below-)
    • After 5 minutes of trading they are told to stop and vote on a community service that the non-business participants (NBPs) and the regular participants in the room will do. The NBPs are given some of the community fund to do the activity and are then allowed to buy from the shops (they should spend it all). If there are no NBPs the facilitator can act as the group doing the community service work. To avoid a long delay the facilitator can suggest a community activity, or a disaster like a flood that needs community assistance.
    • Trading continues. After 15 minutes they are all told to stop. (Use a timer!)
    • Discussion:
      • Each person takes a turn reading off the goods and services they have bought and also speaking about their experience.
      • If themes or tasks were used (see below) they can be scored by the other participants. (How good was your party? What was missing? etc...)
      • What were the benefits and challenges? Generally most of these items can be touched on time allowing.
  • D: Discussion
    • The implementation team should begin to have an idea of what design choices will make the system work, such as denominations, amounts, guarantors, typical things people sell, amounts and values.
    • The team should have the ability to replicate the exercise as a tool to explain how a community currency works.
    • Business Participants: Have a clear understanding of a community currencies – and also the willingness and security to participate.
    • Often these introductory sessions are a good place to start building a core working group from the business community that will start moving things forward.
    • Options:
      • Themes
        • Each participant can be given a theme or task, that gives them a goal in the game (for both the barter and community currency section).
        • These themes can include, weddings, funerals, a birth, getting kids ready for school, throwing a party, starting a small business. If someone has the wedding card their goal is to barter for or purchase things for a wedding.
        • After the game participants can say if they finished their goal or they still need more items - and where those items could be found. Looking at missing items in the network is important for people to think about building a diverse market.
      • Creating a trading Map
        • Through the trades in the previous exercise the participants should be able to visualize the flows of goods and services.
        • e.g.: Place everyone's name on a printed map of the area and draw arrows between them representing the trades that they recorded.
        • Note the loops and stranded members. Talk about how the interconnections creates resilience, and how to make it more connected.
        • This map can be used again and again at future sessions.
      • A Board/Card Game
        • While it is invaluable for local prosumers to think about what they actually sell and interact with each other in the game - developing a board or card game with pre-printed currencies, trading cards, theme cards, a score list and so on, would make this accessible to non-purely local business groups.