Printing your own money might seem like a risky way to solve poverty but a new kind of community currency – one that looks and feels like real money – might offer some of the poorest people in Africa a much-needed financial cushion, one colorful bill at a time.
Wedged inside Kenya’s bustling capitol of Nairobi is the sprawling informal settlement of Kibera, otherwise known as the largest urban slum in Africa.
Densely packed inside this one-and-a-half-square-mile region are hundreds of thousands of homes, markets, shops and restaurants – most held together with rusting scrap metal placed tediously against one another in precarious harmony.
Some say more than 1 million people live in Kibera – a community that lacks basic infrastructure and sanitation services thanks to the government’s refusal to legitimatize local land ownership.
In Lindi – one of 13 neighborhoods that make up Kibera – more than half of the residents live on less than $1 a day according to a study in Les Cahiers de l’Afrique de l’Est. Most residents cite a lack of jobs as the root cause of their economic stagnation.
But that same stagnation was what prompted Will Ruddick of Grassroots Economics to begin working in Lindi and other informal settlements in Kenya in hopes of empowering residents to get out of poverty. His plan? To create a type of community-supported currency that would complement the Kenyan Shilling but could only be used in small, designated neighborhoods.
As risky as it might seem to start printing your own money, Ruddick, a development specialist, isn’t particularly green when it comes to creating complementary currencies in Kenya. In fact, he began piloting radical currency programs in Nairobi and Mombasa, Kenya, five years ago.
But it was the launch of Bengla-Pesa in 2013 that Ruddick’s idea gained level footing.
Named after the Kenyan community of Bangladesh where the currency was first distributed, Ruddick’s Bangla-Pesa was created to trade goods and services by registered businesses or individuals within the Bangladesh neighborhood.
Printed on specialty paper that includes serial numbers and UV ink, the Bangla-Pesa was “issued one-to-one” with the Kenyan Shilling, Ruddick said. Each business – 200 total – were given 400 in credit vouchers, of which half was put into a community fund and the remaining used to purchase anything from photocopies to carpentry.
Just one week after trading Bangla-Pesa money, the results from a study by the International Journal of Community Currency Research (Ruddick is noted as a co-author) arrived citing a 22 percent increase in trade within the Bangladesh network. If continued, Bangla-Pesa could result in approximately $5107.00 of new trade in three months, according to the study.
That sort of success prompted Grassroots Economics to introduce five similar community currencies across Kenya including the Lindi-Pesa in August 2015.
Known as Lindi-Pesa, these colorful sets of freshly minted bills are being used by 180 individuals and eight businesses in Lindi with growing success.
Charles Cheche, an electrician and resident of Lindi, is one of the business owners accepting the Lindi-Pesa. An avid fan of the community-currency model, Cheche said the Lindi-Pesa gives him room to save Kenyan Shillings and also stimulates the local economy with a new flow of alternative cash.
“We use it to improve these small businesses and to maybe have an improved life,” he said. “When we use Lindi-Pesa we find that we save more.”
Spend any time in Lindi – or Kibera in general – and you’ll quickly realize how many people work long hours in backbreaking jobs for little to no money.
Pacing up and down the dirt roads that snake through Lindi and you’re sure to see dozens of hawkers selling everything from spare car parts to dried Maki fish, old socks to lukewarm boiled eggs.
Countless women pass by balancing water jugs on their heads, a consequence of a lack of infrastructure, which forces residents to purchase and haul jugs of water trucked in by businesses outside Kibera. That problem is made even bigger when it comes to handling human waste, which runs openly down troughs carved between the thousands of one-story homes.
Ann Wambui, a single mother and long-time Lindi resident said she knew she would never be a millionaire. Instead, she wanted to be a teacher, a job she now holds as headmaster of Anwa Academy.
Standing outside her two-story primary school crafted out of painted sheets of metal, rotting wood planks and plastic water bottles, Wambui said she attributed the Lindi-Pesa with keeping low-income students in school and off the streets of Kibera.
Many of her 392 students cannot afford their school fees, about 300 Ksh or $3.00 per month.
That was until the Lindi-Pesa arrived, she said.
Wambui started accepted Lindi-Pesa as a form of payment after realizing that many Lindi parents could only pay a portion of the school fees with traditional Kenyan Shillings.
But using Lindi-Pesa vouchers, parents are able to fill that outstanding gap while gaining a bit of financial flexibility that would otherwise cost their children an education, she said.
“If a parent comes with 100 Ksh (Kenyan Shillings) but he needs to pay 150 Ksh, he’ll pay 100 ksh and then add the 50 (Lindi-Pesa) voucher,” she explained.
Any remaining Shillings could be used “to bring the child to the hospital or to buy food,” Wambui added.
In essence, that small stimulus has given Lindi-Pesa users just enough of a financial boost to began saving their Kenyan Shillings – a financial stabilizer that Ruddick’s hoping for.
While most people enrolled these community currency programs are “still living very closely to the poverty line,” Ruddick said that the small voucher stimulus has increased resident’s budget just enough to stay afloat, a success particularly for women who make up about 75 percent of participating business owners.
But despite his positive outcome, Ruddick’s idea to introduce a second, hyper-local voucher-system hasn’t always been popular with Kenyan authorities.
In 2013, Ruddick was arrested and jailed on suspicions of being involved with a secessionist group, and later charged by the Central Bank of Kenya with forgery.
While the charges were later dropped, it seems that Ruddick’s idea can’t quite escape the local hearsay of distributing false money.
“Most are somehow complaining because they don’t understand the idea,” explained Cheche who provides education about the Lindi-Pesa to local businesses. “They feel it’s not legal, that now we are competing with the Shilling, but in time I believe people will come to understand.”
Still, Cheche said that teaching his community about the value of the Lindi-Pesa system remains an uphill battle and that additional assistance from the Grassroots Economics team would help expand the Lindi network.
That said, neither Wambui or Cheche deny the benefits of the Lindi-Pesa in their lives.
Since the August 2015 introduction of the Lindi-Pesa, Cheche said he’s saved about 4,500 Ksh (about $45.00), which he plans to use for living expenses and to improve his business, he said.
Wambui said she’s saved about 290 Ksh ($2.90) – a blessing for her and her students – adding that she and doesn’t plan on “opening the home bank until it’s full.”
That sort of gratification is monumental for many Lindi-Pesa users who “every Sunday, go to their home bank and they shake it and see that they’re saving,” Wambui said.
“If everyone uses Lindi-Pesa, we won’t have any more begging or children out of school. It’s like we are lifting one another.”