Eco-Pesa, a program of Eco-Ethics International Union, is an alternative local currency used to reduce poverty, support environmental conservation, and stimulate the economy of the Kongowea sums in Mombasa, Kenya.
When I first heard of Eco-Pesa, the community-based currency being experimented with in the Kongowea slums of Mombasa, I knew I had to make Kongowea a stop for The BoP Project. I was skeptical at first, wondering why and how anyone would attempt to create an alternative form of currency in a slum, where there is hardly enough of even the official currency circulating around.
As I soon discovered, while wading through the flooded alleyways of Kongowea in a brief but intense downpour of November rain, Eco-Pesa was not some utopian currency with zero value intent on replacing the Kenyan Shilling. It was created specifically to try and keep more of the national currency circulating within the community, while at the same time promoting youth-driven environmental sustainability.
Eco-Pesa, developed by Peace Corps alum Will Ruddick as a program of Eco-Ethics International Union, acts as a business voucher that can be exchanged for local goods and services at registered businesses in Kongowea. Its main goal is to keep money, and donor funding, continuously flowing within the community instead quickly leaving through purchases outside of the slums.
The Eco-Pesa vouchers are introduced into the Kongowea economy in two ways;
First, local businesses can register with Eco-Pesa and purchase the vouchers with Kenyan Shillings from the Eco Pesa Kiosk, which is opened twice a week. Each Eco-Pesa is backed by its equivalent value in Shillings (1 Eco-Pesa = 1 Kenyan Shilling), and can always be redeemed for Kenyan Shillings at no penalty.
Second, local youth are paid in Eco-Pesa by Eco-Ethics International for local trash collection & tree planting in Kongowea. While paying youth for trash collection is clearly not a financially self-sustaining solution, Eco-Ethics sees the payments for these services in Eco-Pesa as a way to implement their donors funds in a responsible way (they call it Responsible Aid). Eco-Pesa allows full accountability for each dollar donated and ensures it stays within the targeted community.
After only four months of circulation, Eco Pesa has achieved modest success in the small section of Kongowea in which it has been launched. Over 70 businesses, including water vendors, food vendors, barber shops, schools, and small general shops, are accepting and using the currency. The Eco-Ethics team has also paid local youth in Eco-Pesa for collecting over 20 tons of trash in the community and planting thousands of trees, which will be used green the slums and develop a profit-generating business for the youth.
So far, the impact of Eco-Pesa on Konogwea is not yet clear. Most businesses accepting Eco-Pesa do report an increase in business, but there is much number crunching and analytics to be done if Eco Pesa wants to determine exactly how many local transactions they are responsible for stimulating.
The long-term goal of Eco-Pesa is to slowly expand the currency to more neighborhoods of Kongowea, eventually introducing it in Kongowea Market, the largest market in Mombasa, just a few kilometers away. This would provide a greater range of goods and services available for purchase through Eco-Pesa, while at the same time open up the Eco-Pesa program to a host of other opportunities. For example, nearby resorts and hotels could exchange Kenyan shillings for Eco-Pesa, and tap into the eco-tourism market emerging around the world by encouraging tourists to shop responsibly.
Eco-Pesa is also working to collaborate with a local Kenyan Micro-Finance Bank, to begin issuing small business Eco-Pesa loans to the Kongowea community.
Eco-Pesa is an innovative experiment in the making, and if successful, has the potential to be a model that is replicated and implemented in slums around the world. Being hardly four months old, it will take some time to evaluate the impact, develop metrics, and understand how the currency is flowing within the community. Keep posted on The BoP Project, and http://www.ecoethics-kenya.org/projects/eco-pesa.html for updates on the program.