Introducing Bangla-Pesa; Kenya’s new beautiful currency

Bangla-Pesa: Image Source:qz.com

Adapted from qz.com. A new currency, The Bangla-Pesa, was introduced two weeks ago by a Mombasa-based NGO. It is not designed to be an alternative to the Kenyan shilling, but rather to complement it by boosting economic activity in Bangladesh- a crammed village in Mombasa, where shillings are scarce. Bangla-Pesa are scrip born out of mutual consent: some 200 businesses have agreed to accept the currency, and in return, each has been awarded a credit of 400 Bangla-Pesa.

That credit works like a zero-interest loan. Every new business that joins the Bangla-Pesa network must be supported by four guarantors who are already members. If the new business spends its 400 Bangla-Pesa, then fails to earn as much back, its guarantors must make up the difference, or all five businesses will be ejected from the network and forced to pay back the debt directly in goods and services.

The Bangla-Pesa has a direct predecessor in another Kenyan local currency, the Eco-Pesa. Eco-Pesa began circulating in August 2010 in Kongowea, which like Bangladesh, is made up of multiple
villages crammed together tightly. Apart from acting as currency, Eco-Pesa helps dispose of trash and trash and sewage.

Here’s how: After the currency was introduced to Kongowea, the settlement held a large trash disposal event, in which local youths were given five Eco-Pesa for each trash bag they filled (the trash was ultimately sent by truck or hand-cart to the nearest landfill). They spent this cash at local businesses, which could either use it to buy goods or services from other local sellers or exchange it for shillings. After three months with the Eco-Pesa, the monthly income of businesses in Kongowea had risen by 22 percent, and the settlement had rid itself of 20 tonnes of trash.

Unlike the Eco-Pesa, the Bangla-Pesa wasn’t introduced to solve the waste management woes of Bangladesh, nor can the currency be exchanged for shillings. The goal is to create an interest-free system of microfinance that doesn’t rely on a bank or financier, but allows new businesses to get started by buying local goods and services on credit. Will it work? Hard to say, but Koru, the Mombasa based NGO, plans to release a progress report at the end of the year.

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