And thus, the Sarafu Network was formed. The initiative came about through Rudrick’s Grassroots Economics Foundation and has been in operation since 2010. Although it was initially started on the coast, Sarafu has spread to various other communities in the country.
The model by Rudrick’s Grassroots Economics Foundation has been so successful that in 2020, the Kenya Red Cross partnered with the foundation to launch the network’s basic income system in response to the critical implications of COVID-19 among vulnerable communities.
Undoubtedly Sarafu is an innovative project that’s changing the lives of many Kenyans. Have a look at the network’s unique model and impactful efforts among the vulnerable.
Understanding the Sarafu Network
The project’s name Sarafu means ‘currency’ in Kiswahili, the country’s official language.
Sarafu is a Community Inclusion Currency (CIC) designed to create a regenerative economy among low income communities. CICs are a form of DAO that issues members access to shared services through tokens (eVouchers).
Sarafu relies on trust and community participation. The SRF voucher’s circulation provides support for vulnerable households among communities, all while building a more resilient economy.
Today, the network has about 10,000 registered users and 50 currencies enabling various communities. Initially, Sarfu used paper vouchers for its tokens but has since moved on to eVouchers.
The Sarafu network model
Grassroots Economics (GE) invites communities to create their vouchers on the network. Once a community expresses interest in Sarafu, GE’s first step is picking a hub in the local community, which will serve as the point of entry. This hub could be a school, business, or any community-owned enterprise that can facilitate Sarafu’s integration into the local economy.
Grassroots Economics then relies on humanitarian organizations, service fees, and donors to build the network’s infrastructure. In return for the SRF CIC tokens, the organizations commit to offer their goods and services, which could range from installing water tanks in the community to supporting agricultural endeavors in the community.
The SRF token gets its value from the community. Members decide what they value the most and set that as the unit of account. They also agree on accountability measures and GE involves community elders and local leaders to audit the commitments. In doing so, the voucher’s supply is always over collateralized.
Additionally, the network incorporates a model that discourages SRF HODLing. Token holders are subject to a 2% tax to hedge against network attacks. The tax implication encourages community members to redeem their SRF tokens for goods and services within their locality.
The community eVouchers are created on a blockchain tagged Kitabu. Users can then access the vouchers using an USSD code or SMS services that don’t require internet connectivity. This is especially critical, as many people in the target communities have no access to a smartphone, let alone reliable internet connectivity.
To further encourage SRF usage, the vouchers gradually expire over time, and the expired ones are renewed to ensure a stable supply and support reissuance.
What’s more? SRF holders can redeem the token as payment for services offered by Grassroots Economics.
Joining the network is free to all, although GE considers having a product or service as a crucial criterion in onboarding new users. New users join in by dialing *384*96# and *483*46# on Safaricom and Airtel networks, respectively. Upon successful registration, new members receive 50 SRFs, and have to sell a product to earn more.
Undergoing projects under the Sarafu Network
The Sarafu Network has had tremendous success in launching community tokens among various communities in Kenya. The initiative, which started in Kongowea, has grown to encompass communities in Mombasa, Nairobi, Kisumu, Malindi, among others, all of which are significant towns in the country.
While there are many notable projects under the Sarafu Umbrella, here’s a look into two of them which are quite outstanding.
Farming in Kilifi
A quick Google search on Sarafu and this is probably the first thing you will see.
Farmers in Kilifi County are perhaps among the biggest beneficiaries of Sarafu. Community members can easily access agricultural products, such as fertilizers, thanks to SRF’s circulation in the area.
Kilifi residents don’t have to rely on the kenyan shilling, which is inadequate in the area, to run their day-to-day activities. Merchants in the areas are SRF users, allowing farmers to redeem their vouchers for just about whatever they need. They can also accept SRF as payment for their farm produce.
Just think about it; you could easily swap your tomatoes for school fees. Incredible, right? It might not seem like much, but for households that struggle to get the basics, it makes so much of a difference.
Malindi Desire Initiative (MDI)
MDI’s focus is to create sensitization among the queer, a community that is constantly sidelined in Kenya, and even more in the rural areas.
Through the initiative, the LGBTQ+ community in Malindi has developed a community currency, MDI, which aims to upgrade the living standards of the community and create visibility for its members.
Kenya, a country where LGBTQ+ rights are vague, has been subject to recent profiling cases. Projects, such as MDI, therefore, provide refuge for the community that often feels alienated from the rest of the population. The initiative provides a home and hub for economic empowerment for its members.
The token’s official launch is scheduled for 25th September, and we have more details outlined in the upcoming sections.
We sought to find out more from the people who are actually involved and got in touch with some people on the ground. Cryptorrence talked to Isavary Khabuqwi and Shally M. who are involved in the MDI project, and here’s an excerpt on what they had to say about Sarafu’s efforts.
Given the success with Sarafu so far, do you think CICs could be a solution to crypto mass adoption?
No. “Crypto” as a catch-all for anything deployed on a blockchain is far too general. At GE, We have standards and an opt in Commons License
Vouchers are legal credit obligations like Telecom Airtime Credits or an IOU- they are an ancient form of agreement. Much of the “crypto” you see today has no such clear or legal agreements.
I think the Sarafu Network is an example of a cosmo-local approach where people are enabled to create commons and financial instruments.
SRF has helped increase liquidity among various communities. How impactful has this been for the members?
There are several benefits from SRFs circulation in the local economies. For starters, community members get a sense of identity from the projects. The established community supports an individual in finding out what he or she can offer to others.
SRF also helps citizens preserve their dignity. With the Kenyan shilling in scarcity, many people turn to borrowing to access the needed goods and services. Voucher issuance also helps reduce debt as members issue credit using the vouchers.
What’s more is that SRF leads to increased trade and trust among community members. The vouchers make it possible for traders to continue selling their products and services in spite of the lack of Kenya shilling.
Continued redemption of vouchers for goods and services by different issuers to users increases trust in it as a medium of exchange.
What are some of the challenges you’ve had to deal with when implementing the Sarafu project?
The biggest challenge has to be the language barrier. Our target communities mostly come from rural areas where most people are mainly accustomed to conversing in their native languages. We’ve, therefore, adopted a model where we identify a few people conversant in Kiswahili, train them on the project’s initiative, and then rely on them to help educate the community.
Grassroots Kilifi unSafari
With EthSafari coming up, Cryptorrence sought out the group’s opinion on the biggest ETH conference in East Africa.
Sadly, Sarafu doesn’t have the funds to attend the conference nor do any of the communities they work with.
‘Safaris’ in Kenya are organized to see the wildlife and often ignore communities on the ground. The cost for a tourist’s ticket and travel represents months to years worth of income for most people living here in Kenya. Safaris often serve an elite group of people and ignore people on the ground. The project aims to unSafari ETHSafari so the initiative does not make that mistake.
“We would love to encourage attendees to participate in helping local economies by experiencing how members of different communities here in Kilifi are implementing the use of digital tokens to make an economic difference. ETHSafari participants can have access to local goods and services in exchange for local blockchain vouchers using their Safaricom sim cards as locals do without the need for the internet.”
The conference’s participants can interact with the locals using blockchain technology in Kilifi and Kenya at large. They could buy their goods and services using blockchain vouchers, establish information sharing between experts and users, and experience and promote blockchain use cases in Africa.
To support this, the Sarafu Network is hosting a Grassroots Kilifi unSafari.
Sarafu’s efforts haven’t always been received well by the government. The group has previously received threats of being shut down. However, Sarafu is currently working with the government to reach more vulnerable communities.
