Problems And Solutions - Another World Is Here

The article below is from my site of the moment WorldChanging: Another World Is Here and to me further illustrates that many solutions are always available to us when faced with a problem. The task is always to focus on a solution until you find one. Money is simply an agreement of exchange. From a spiritual perspective the Universe offers an agreement of exchange also; it agrees with you on whatever you believe.


Banking on the Community

Copyright 2001, Mona SerageldinMoney is imaginary.

More precisely, money is the tangible manifestation of an agreement between you and other people that the oddly-colored piece of paper in your hands has value. This lets currency rates slip and slide relative to each other, as people try to agree on exactly what the value should be, but it also has another implication. If you can find enough people to agree on its value, you can make up your own money.

In 1998, the residents of the Palmeira District, a slum in Fortaleza, Brazil, did just that. Setting up an organization called Association of Neighbours of the District of Palmeira, the residents created a new bank — the Bancos des Palmas, or Palm Bank — and a new currency, the Palmas. The bank and currency not only succeeded, they have thrived.

The bank was set up to fight poverty and to improve the living conditions of the residents of the district of Palmeira, through local economic development, encouraging community mobilisation and the re-establishment of community spirit. Before the bank was set up, local producers rarely sold produce to their neighbours and the local residents tended to buy their goods elsewhere. By increasing sales within the settlement, the association hoped that small entrepreneurs would have more income and be able to expand their enterprises, as well as giving the residents a better deal.

The efforts to strengthen local businesses has been very successful. According to an independent 2003 analysis (PDF) of the project by the Dutch microcredit NGO Strohalm, while nearly a quarter of the district’s residents interviewed reported an initial reluctance to participate, 100% — every person spoken with — “stated that they have altered their consumption patterns towards local products” as a result of the spread of Palmas. Spending on local commerce jumped from 16% of purchases to 56%.

But the Palm Bank is more than currency: it’s a source of microcredit loans. In that, again, it has been wildly successful at improving the lives of Palmeira residents. There are five types of loans: business microfinancing; a special microcredit program for “at risk” women; the PalmaCard (credit card); PalmaCasa (for renovating homes); and loans for urban agriculture (such as backyard gardens). The programs have given support to hundreds of Palmeira families. Most widely used is the PalmaCard:

The PalmaCard enables families to obtain goods in local stores and not have to pay for them until the following month, without interest and on a date agreed by the family. This not only allows families to obtain goods ahead of earnings, but also ensures local products and services are bought, promoting economic growth among the community. This has benefited at least 520 families and, during the first three months, sales of local goods increased by 10 per cent, directly generating 20 new jobs.

Dropping out and creating a community currency is surprisingly common, but doesn’t always work; the Palm Bank experience is particularly special. Nonetheless, the Palm Bank is a vivid demonstration that slums and poverty are not due to some defect in the industriousness or desire for a better life in the residents. Sometimes, changing the system is the necessary course of action.

(Posted by Jamais Cascio in Money as a Tool – Finance, Venture Philanthropy, Trade and Economy at 06:26 PM) [WorldChanging: Another World Is Here]

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