Bangla-Pesa makes huge comeback after court battle
By LINAH BENYAWA
When the concept first hit the Coastal town of Mombasa, State agencies including the Central Bank of Kenya (CBK) panicked. They feared the complimentary currency voucher circulating in Bangladesh area, Mombasa County, might replace the shilling, Kenya’s legal currency.
With the fear seeming palpable, the authorities rushed and arrested the founder of the then famous Bangla-Pesa Will Ruddick, an American economist, and five beneficiaries of the complimentary currency and charged them in court.
There was closure of all Bangla-Pesa related business. But soon, all was over. The currency has been relaunched. Business is back to normal in the informal settlement of Bangladesh after the re-introduction of the Bangla-Pesa voucher.
Now, Koru’s Bangladesh Business Network residents are happy they can conduct trading using the vouchers to improve their livelihood.
“I am happy that things are now promising since our re-launch in November 23 where the area Member of Parliament Badi Twalib and other county representatives attended including the provincial administration” says Ruddick.
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Ruddick observed that the membership has increased from 100-130 people, are registering more people.
He explains that since the re-launch, the market has been stable and the locals were now able to afford basic needs through the trading system. “Since the Government is supporting the project, our next step is to see how we will help other local communities especially from the informal settlements”, he says.
When Weekend Business’s visited the settlements, there was a flurry of activities as people conducted trade with no fear as opposed to last year when some members of the business network were arrested after vouchers were mistaken to be complimentary currency competing with the legal currency.
Mwololo Mwania a member of the business network who operates a small kiosk say he is grateful. He is now able to fend for his family. “Since the re-launch, business has improved, we are now able to save the Kenya shillings as we use the vouchers on our day to day trading with members of the network,” explains Mwania. Mwania said they were forced to change from the name “Bangla Pesa” to “Bangla Voucher” arguing the decision was informed by the confusion that marred the coastal town and the entire country.”
“We decided to remove the word Pesa and replace it with voucher, since it had brought confusion in the country. People thought that it was a currency that was competing with the legal currency,” he says. He says that since the re-launch that was presided over by the area member of Parliament Badi Twalib and other local leaders, business has improved, and nobody has interfered with their trades.
Maciana Anyango 64, a widow is another beneficiary. She trades porridge, maize and beans with the use of 200 Bangla vouchers every day. She is the sole breadwinner and takes care of her disabled 17-year-old daughter and a son who trained as a driver and has not secured a job yet. “I support this household from the sale of porridge, beans and maize soup. I take 200 Bangla vouchers every morning to buy sugar from Mwololo to make my porridge,” says Anyango.
“When I get customers, I will buy fish and other foodstuff to fend for my family.” A visit by Weekend Business reveal trading without use of the Shilling, which means the money from trades, which do use Kenyan shillings, can be saved and used for other kinds of purchases.
When we spoke to Anyango, she had 400 Bangla-vouchers after a day of trading. The next morning, she would take half of it to buy sugar.
The remainder was used to buy food and water for herself and her family. “I used to be without food because we wouldn’t have enough Kenyan Shillings, now I can eat even when I don’t have the real money because I still have the Bangla-Pesa to use,” she says.
On May 31 last year, the six Ruddock, Immaculate Onyango, Alfred Osigo, Paul Mwania, Rose Auma and Caroline Dama were charged for being in possession of printed papers that had currencies a charge they denied and were each released on a Sh50, 000 surety bond.
The arrest and charges created animosity as the local community blamed a section of the media of misreporting, claiming that it was not their intention to replace the legal currency but to uplift their economic standards.
But three months after arrest, the Director of Public Prosecutions Keriako Tobiko dropped the charges. On dismissing the charges, Tobiko said, “From the facts of the case no offense is disclosed under CBK Act, and also the Kenya Revenue Authority confirms that no offence is disclosed from the facts of the case under the VAT Act and compiled with my earlier observations in my letter dated July 8, 2013, I therefore agree with your recommendations that this case against the accused persons be withdrawn.”
Though withdrawal of the case was a sigh of relief to the accused and Bangladesh community, the damage had already been done. The circulation of the vouchers had stopped and according to them, the local economy had dwindled.
“As a poverty reduction programme, Bangla-Pesa points in a new direction for community development by fundamentally re-thinking our means of exchange and how it issued,” he explains.
“It gives those living in dire conditions the ability to create their own means of exchange and stabilise their own economy.” Ruddick explains that Bangla-Pesa voucher were complimentary currency aimed at reducing poverty levels in the community. “Majority of the Bangladesh locals are living in poverty and are unable to afford the high standards of living and that is why we came up with this concept which is more of a barter trade so that the locals could be able to sustain themselves economically,” says Ruddick.
“The concept was more of a trading system to facilitate and keep the economy of the locals growing. In this area, people have the capacity to work but they cannot work because there is no money, that is why we decided to come up with these vouchers where interested members would trade within themselves using the vouchers hence able to get basic needs,” he explains.
]Ruddick argues the network was using the vouchers printed by punch-line security printers a printing company which he says prints security papers in the entire country.
“These trading vouchers were done by locals who own businesses and there was a limit for trading with the Bangla-pesa vouchers so that the seller could also accept cash from people who are not members of the network and other locals outside Bangladesh area,” he adds.
“We want more shillings. That is why we came up with the trading vouchers to enable locals save money and use them to better their lives and businesses..”
He noted that since the inception of the project in January this year, the economy of the local community rose to 22 per cent, arguing that the locals were saving the money they receive from selling their commodities. “When the innovation was stopped by the state, locals were hopeless as they became poor,” said Emmaculate Onyango, a beneficiary.
Now, the locals are happy after the re-launch of the trading system on November 23 last year when the entire community including local leaders attended and showed their support for the project. They can now do business.
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Bangla-Pesa Central Bank of Kenya