NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, November 5, 2018

By Dune Lawrence and Eric Ombok

At the Sifa Children’s Center, shacks made of corrugated metal serve as classrooms for some 300 pupils, circling an expanse of dusty, hard-packed earth that’s both playground and meeting space. Beyond the school stretches Gatina, one of the poorest neighborhoods in Kenya’s capital of Nairobi. Headmaster Francis Wanjala is standing in an unused classroom studying his phone; he’s just learned how to trade a blockchain-based digital token.  The school uses Gatina-pesa to buy vegetables, sugar, and other ingredients for lunches.

Four years ago, Wanjala joined a local experiment in economic development, agreeing to accept and use a so-called community currency, paper vouchers that complement the official Kenyan shilling as a means of exchange within Gatina. At the start, the headmaster, and every teacher, got an allotment of “Gatina-pesa” worth about 400 shillings ($3.93)—enough to pay for a simple family meal. They could then spend them at local businesses that had also signed on to use the vouchers.

At the same time, about 20 percent of parents now pay the fees for their children’s education in community currency. Fewer kids are dropping out, according to Wanjala. “We as a school noticed that there were a lot of challenges when it comes to paying school fees, because most of the parents run small businesses,” he says. “Whenever we have a parents’ meeting, we tell them about the community currency.”

Photo courtesy of Erik (HASH) Hersman.