The Implementation of a Community Inclusive Currency in Cameroon
ASAFE comes up with a design ready for implementation everywhere in the region
After field studies, that revealed pressing constraints on smoot trade and exchange in communities, found out that one factor that bogged down fluid trade exchange within a community was the lack of a steady circulation of cash for reasons that are varied.
One solution that came out strongly; and easily implemented thanks to digital technology was that of a “Community Currency”. It is showing that thanks to technology; financial inclusion is possible and mostly access to credit.
ASAFE decided to go from concept to implementation.
The site of Nylon quarters in Douala that harbors 5000 inhabitants was chosen for the pilot program because it is inhabited by low income earners who supplement their income with a variety of trades. Contacts were made with the Chief of the Quarter for sensitization meetings with inhabitants.
The main objective was to know their needs in terms of social development of their locality and present to them our proposal to digitize local resources and talents. And moreover develop a system of credit that enhance the productivity of entrepreneurs. Our testing is made in the low income area but can be used for all fringe of the society.
Discussions were held on the economic situation, the weakening of purchasing power and highlighting the difficulties faced by households in meeting their needs
The field surveys highlighted local resources that could help strengthen the local economy;
Another outcome was that the concept was accepted by the quarter leaders and it was agreed that the population should be sensitized and their view known.
The project then contacted the Association of students of Economic Science (AISEC) at the University of Douala for the recruitment of 15 volunteers for the sensitization purpose. A questionnaire was drafted and the students trained and drilled on how to carry out the process. The trainees proceeded to the Nylon quarters for a trial session and the mapping of the quarter into zones that will be covered by the volunteers for the sensitization and information gathering purposes. The information gathering and sensitization process that was supervised by Ferry Toussé took four days.
The field report revealed that 71% of the people in the quarter use Android telephone, 21% use basic phones while 1.5% used the iPhone. The statistic provided a clear indication as to the type of mobile Application that will be used for the Community currency process.
The legal framework
This then resulted in the project organizing roundtable discussions on the way forward. One of such a round table was to get Jurists, economists, Fintech specialists from Ejara, Gooddollar, Kola and government officials. The discussions centered on the legal framework in existence in Cameroon, the type of technology to be applied and how users will be protected and took place at a conference hall of Afrique Hotel in Douala on March 20, 2024.
With regards to the legal framework, Dr. TIETSIA TATIEKAM Dhuamel a Juris Counsel revealed that there was no legal instrument binding community currency transactions in Cameroon. Currency issues, he said, are regulated by the Central bank of Cameroun (BEAC) that issues the Franc CFA which is the legal tender. He further revealed that the Community currency was regulated in France by a law instituted in 2014. The Jurist however said that the void of a legal infrastructure can be substituted by the mutual agreement of members who have recognized and accepted to use the currency as a means of exchange. “Once a community accepts and adopts it, it becomes a valid tender like it happened in France before the 2014 law. On like the FCFA that is issued by the Central Bank, a Community currency is issued by a legalized organization like the New faces New Voice or any other for regulatory purposes. He however stressed that the organization must be legalized by the authorities of the country.
When asked to state the form of the currency, Dr. Tietsia said that the vouchers will be in the forms of 50, 100, 500, 1000 and 5000 FCFA. “But where will a user obtain FCFA for out of community transaction?” a participant asked. “The members will just have to walk to a Counter created by the issuing agency to exchange his Vouchers on agreed terms” the Jurist replied. He further stressed the needs to see Mayors promote Community currencies in order to boost council revenues accruing from booming business.
On Security and Data protection.
A second roundtable involving almost the same actors and users gathered 25 participants at the Afrique Hotel Hall on March 22, 2024 to discuss about Data protection and the way forward. It has been noted that falsification of banknotes is quite easy, as shown by the example of the Credito currency system (in Argentina) which, between 2001 and 2002, was invaded by counterfeit money (according to some estimates, the proportion of counterfeit notes reached between 80 and 90 per cent of the money supply). Therefore setting up banknote protection (paper, special ink, watermark, etc.) can be expensive. From the discussions there was unanimity that the falsification can be curbed by using electronic complementary money since most users already have cell phones. What needed to be put in place was a Users’ charter that assures members of the community. There was also a need to put in place a system of control that surveillance agencies charged with controlling money laundering can have access when needed. It was advised that nothing in the form of minted currency apart from the authorized legal tender which is the Franc CFA shall be used. There was also the need of putting place a unique means of clearing through Blockchain that has been proven to be the most secured.
Creation of an organization charged with the management of the community currency
It was agreed that the community currency will be known and referred to as ABBIA and organization charged with its management created and legalized as required by the regulations of Cameroun.
A committee charged with the creation of the ABBIA organization was put in place to draw up the constitution register members and call up a general Assembly to take care of the administration and management of ABBIA. Council and Administrative authorities have been informed about the activities of the ABBIA. The organization is entering into contact with GIZ the organization that launched the first community currency in Cameroon for cooperation modalities that will enable the project use their platform. Ejara, Gooddollar and Kola Fintechs have been preselected to provide the technology that will be used on the platform.
Recruitment of an Extension Worker
There is a need for an Extension worker to be recruited.
The principal terms of reference for this Extension worker implementing the currency project will involve the following:
1. Understanding the context which means knowing the institutional and economic context in which the Community currency (CIC) is to be implemented. This will include understanding the goals for which the CIC was created, the process and mechanism that underpin its operation and how it is evaluated according to its goals.
2. Design and put in place principles that will guide the implementation of the CIC project and should be oriented towards sustainable development goals.
3. Community engagement. It is understood that extension principles are paramount for both the Extension worker and the communities. The Extension staff therefore will have to engage with the community, understand their needs, and ensure that the CIC project is designed to meet their needs
4. Impact Assessment: The Extension worker will have to assess the effectiveness and the impact of the CIC project. This will involve evaluating the program’s impact on the lives of the beneficiaries and the community at large in a detailed report.
5. Program sustainability: The Extension worker shall develop strategies to sustain the Community extension program of the CIC in the various spheres of activities within the community.
