The Sarafu Network, which incorporates blockchain-based network monetary standards, has seen a take-up of over 500% since 2019 after the coronavirus and Covid-19 pandemic previously affecting low-pay neighborhoods in Kenya.
As indicated by Will Ruddick, board part at Grassroots Economics, the association running and dealing with the Sarafu Network, there has been a tremendous spike in the quantity of individuals utilizing these blockchain-based monetary forms for indispensable fundamentals like nourishment and water.
Sarafu Credit, the most mainstream network cash, is utilized as a top up installment to the Kenya Shilling where an inhabitant might not have enough cash to pay for fundamentals. Assigned shops acknowledge part installment in Sarafu Credit for merchandise and ventures, and consequently, can trade the cash for nearby Kenya Shillings.
Speaking to BitcoinKE, Will said:
“There are 5,769,071 CICs distributed to 13,040 registered users in Kenya. In the last 30 days as of April 7th we’ve monitored 14,129 Transactions among 4,420 users, for a volume of 5,433,306 Kenyan Shillings. In addition 756,091 Kenyan Shillings were distributed via Mpesa to community groups based on their Sarafu balances usage.”
Below is the usage breakdown over the last 30 days:
- Food/Water – 1,637,713
- Farming/Labour – 1,447,090
- Savings Group – 1,141,108
- Shop – 697,650
- Fuel/Energy – 320,069
- Transport – 101,100
- Education – 71,957
- Health – 8,231
- Environment – 7,555
An average transaction on the network currently stands at Kshs 300 showing the important role these currencies are playing in ensuring households get the basic provisions they need.
Sarafu Credit can also be acquired with Safaricom Bonga Points, a popular digital token for users of the Safaricom mobile network.
According to Antony, one of the Sarafu Network field officers:
“Before Covid-19, we did not have many groups to exchange Sarafu. We used to pitch the idea and let them think about it. Currently, word of mouth is helping skyrocket and bring in new users who are also spreading the word around about the Sarafu Network.
We now have more than 70 such exchange groups.”
Currently, Grassroots Economics is undertaking a campaign to enable more people use Sarafu in order to offset their daily needs including food, soap, water and more.
New registered users are awarded 400 Sarafu (KES 400) and an extra 100 Sarafu for registering and teaching new users how to use it.
Community currencies have been shown to have a more lasting impact than direct cash transfers by helping build businesses in the communities. Red Cross Kenya spearheaded a similar campaign in 2019 in Kenya. Such initiatives are generally more impactful during a crisis like the one currently unfolding.
Red Cross is aiming to reach 320,000 users in the next two years, all of whom are living below the poverty line.
As the current Nairobi lockdown and curfew amid the Covid-19 crisis takes a heavy toll on the economy, the greatest impact is being felt by the two-thirds of the 4.4 million people crammed into informal settlements that lack basic services in the city of Nairobi.
Community currencies are thus helping to greatly reduce the impact of this crisis.