Mutual-Credit in Informal Settlements (Bangla-Pesa)

The launch of Bangla-Pesa May 11th 2013 marked the beginning of a sustainable development program for Kenyans living in poverty. Information about the system can be found here, and socio-economic baseline data can be found here.

In a mutual credit system credit equal debts and the ultimate backing of the currency is mutual commitment among members. In Bangladesh, Kenya members of the Bangladesh Business Network (BBN) have implemented a system to allocate and guarantee credits exchangeable among themselves. After finding four backers, a member is allocated paper-vouchers worth 400 Bangla-Pesa. (4 50's, 4, 5's, 6 10's and 6 20's.) Half of this they pay to the BBN as their membership fee. This credit the BBN will use for community service works. The other half they are allowed to start using for goods and service. With a diverse network of businesses and enough backers of the currency systems like Bangla-Pesa act as a flowing means of exchange that need not be purchased for national currency.

Using Bangla-Pesa (BP) is akin to a delayed payment in goods and services. By paying someone for water with 20 BP the issuer is promising to accept payment in his or her own goods and services at a later time for BP. This creates an interest free form of new-money in the local community that can push families above the poverty line.