Vulnerable communities do not lack demand, or labour, or ideas. They lack a medium of exchange to deploy their underutilized resources and an ability to generate financial capital themselves. Red Cross' community inclusion currencies project will allow people affected by crises to effectively create their own local currencies to bootstrap development. The project is now scaling from Kenya to Cameroon.
What is the humanitarian challenge?
Traditional aid programs have failed to address the fundamental problems plaguing the economic infrastructure of marginalized communities. Chronic lack of cash and the subsequent debt cripples a huge segment of the population served by humanitarian agencies, especially displaced populations such as refugees and Internally Displaced People. The bulk of the aid flows out of the community too quickly to provide lasting impact. Finally, there is simply not enough aid to go around.
What is innovative about this project?
Norwegian Red Cross and partners have with great success scaled Community Inclusion Currencies (CICs) in Kenya, and is now scaling to Cameroon. CICs are blockchain-based eVouchers that community members use to buy and sell basic needs in the face of scarce national currency. CICs introduces a replicable mechanism for communities to eradicate poverty by creating connected, inclusive, and sustainable local economies through the use of community currencies and open source blockchain technology. The project aims at reinventing cash transfer programs to act as a catalyst for communities to develop and trade their own medium of exchange. The project in Kenya have shown that CICs enable vulnerable communities to have a long term multiplier - more than 21 times - effect on cash transfer fund impacts.
The first phase of the project was in partnership with Kenya Red Cross, Danish Red Cross, Grassroot Economics Foundation and the payment platform provider Sempo. For Cameroon, the ICRC joins the effort to expand and scale CICs with several objectives in mind.
In Cameroon, ICRC and the project partners will test the suitability of tokens as a means of transferring humanitarian assistance, versus the current practice of cash paid by bank tellers at ICRC’s instruction. Second, for those beneficiaries who prefer to avoid SIM card ownership, a single use voucher will be developed. These vouchers will be spendable with any SIM-owning user. Lastly, the team will introduce ‘impact claims,’ or rewards of tokens for users that perform verified, beneficial acts within their communities. The reward tokens might be given for attendance at a community cleanup event, providing training, or onboarding new users. These additional tokens offer donors a chance to both increase the tokens in circulation and link their introduction to SDGs.
What are the expected outcomes?
The traction of the CIC pilot indicates potential for CICs to be a globally replicable tool for communities to lift themselves out of poverty. In order to make CICs accessible worldwide, open source technology and methods are needed along with rigorous evaluation. The main expected outcomes of this project is to further develop and test the technology while scaling up to reach more users. The proejct is aiming to reach 320,000 users in the next two years, all of whom are living below the poverty line.
Who are the project partners?
This project is a partnership between Norwegian Red Cross, Danish Red Cross, Grassroots Economics, International Committee of the Red Cross and Croix-Rouge Camerounaise.
Read more about the project here.