Sitting on a low bench at her shop in a Nairobi slum, Grace Wangari sifted through a handful of grains that a waiting customer had just ordered.
As she poured them into a shopping bag, the customer scrolled through her phone to pay for the purchase.
Normally, Wangari would have been paid in shilling notes, Kenya’s hard currency, but in some ways she preferred the digital payment that was instantly transferred to her phone.
“I am happy with this transaction, because there is no risk of losing my stock to conmen or people who have come to take goods on credit,” said Wangari, a middle-aged trader in Mukuru Kayiaba, one of the city’s poorest slums.
The transaction happened through Sarafu, a blockchain-based community currency that is helping thousands of Kenyan slum dwellers pay for food, water and sanitary items as they battle through the COVID-19 economic downturn.
Each week, families are issued with virtual vouchers worth 400 Kenyan shillings (US$4), which they can use to buy essential goods, said Roy Odhiambo, an innovation officer at Kenya Red Cross Society (KRCS), one of the groups behind the project.
Vendors can then send the vouchers to Grassroots Economics, the Nairobi-based social enterprise that codeveloped Sarafu (“coins” in English) with US-based engineering firm BlockScience, and redeem them for cash.
Odhiambo said that more than one-third of the vendors in Mukuru are already signed up to the project, which launched in 2019 with the aim of helping struggling families get hold of everyday basics without worrying about having cash on hand.
Now the project is providing a lifeline for families trying to cope with the financial pain of the pandemic, he said.
Antony Ngoka, a field coordinator with Grassroots Economics, said that thousands of slum residents, who are mostly casual workers, have lost their jobs during the pandemic.
Unable to get loans from traditional banks, many become easy prey for loan sharks, Ngoka said.
However, blockchain can help poor Kenyans avoid economic exploitation, said Nelson Ochieng’, a rights activist and social worker in Kibera, Nairobi’s largest slum.
“Blockchain can foster local trade by tapping resources that are ignored by mainstream businesses. It also increases levels of trust among struggling communities,” Ochieng’ said.
In Mukuru Kayiaba slum, about 9km from Nairobi city center, about 4,000 residents have registered with Sarafu, Odhiambo said.
Developed with funding from global government donors, the platform can make an average of up to 1 million Kenyan shillings in daily transactions, he said.
Unlike cash aid, which can be spent on anything, Sarafu can only be used to pay for essentials, such as food, health supplies and educational resources, he said.
Because the platform runs on blockchain, meaning all transactions are tracked and transparent, that ensures people are spending the money only on necessities, Odhiambo said.
Odhiambo said that KRCS is working with the Danish Red Cross and Innovation Norway, the government’s business development agency, to roll out Sarafu across Kenya.
However, seeing the platform as a threat, loan sharks are using political and financial manipulation to lure Kenyans away from it, Ochieng’ said.
Informal lenders recruit people to spread rumors that blockchain is a Ponzi scheme with no backing from local leaders, a tactic that has successfully stifled the uptake of other blockchain-based projects in the past, he said.
“The aim of loan sharks is to divert people from innovations that are helping them access basic services in the slums without having to pay interest,” Ochieng’ said.
They also pull in customers by offering much higher sums than they can get through Sarafu, with exorbitant interest rates, he said.
Violet Muraya, who sells water in Mukuru slum, said that informal lenders can offer loans up to 10 times larger than anything available through the community currency.
“When people have emergencies and need huge amounts of money, they cannot use Sarafu. So, they go to loan sharks for help and end up being trapped in financial slavery,” Muraya said.
Odhiambo said that the Kenya Red Cross Society is running education and awareness-raising campaigns in areas where the project has been rolled out, to reassure users that the platform is safe and fair.
“At first there was resistance ... because of the propaganda, but the community has accepted this cashless transaction, because they know it is not some type of betting or loan facility,” he said.
At Isaac Makavu’s food kiosk in Mukuru, people lined up to order his steaming rolls of baked flat bread, chatting about an upcoming Premier League soccer game and sharing funny stories about their day.
Makavu said that Sarafu has helped people in his community avoid eviction during the pandemic by allowing them to save their cash.
Some come together to pay each other’s rent through table banking, a form of savings scheme where a group contributes a set amount of money every month and then uses that money to help members who need it.
Charities say evictions have been rife in parts of east Africa during the pandemic.
In one instance in May 2020, Human Rights Watch reported more than 8,000 people living in two Nairobi slums were evicted from their homes.
However, “there have been no evictions in areas where Sarafu is being used by slum communities because they were able to pay their rent on time,” Makavu said. “No one is going to sleep hungry here because they have community currency.”
Some say that the third time’s a charm. Not so for SpaceX, whose unmanned rocket on Wednesday exploded on the ground after carrying out what had seemed to be a successful flight and landing — fresh on the heels of two fiery crashes. It was yet another flub involving a prototype of the Starship rocket, which SpaceX hopes one day to send to Mars. “A beautiful soft landing,” a SpaceX commentator said on a live broadcast of the test flight, although flames were coming out at the bottom and crews were trying to put them out. The rocket exploded a few minutes later,
‘GRAVE CONCERN’: A critic of the government died immediately following his complaints of torture at the hands of security forces, a human rights group said Students on Friday clashed with police in Bangladesh’s capital, Dhaka, as anger mounted at the death of a writer and government critic in a high-security jail. At least 18 police and an unknown number of protesters were injured in the clashes, authorities and witnesses said, amid international demands for an independent investigation into the death of Mushtaq Ahmed. An Agence France-Presse correspondent witnessed police using batons and firing tear gas at students who staged a torchlight march calling for “justice” near the University of Dhaka. At least six students who allegedly attacked security forces with torches were detained, police said. More protests were planned
LEGAL ORDEAL: The heavy caseload involving 47 defendants and the vagaries of a Beijing-imposed security law made it difficult for the court to rule on bail requests Dozens of Hong Kong democracy advocates charged with subversion yesterday returned to court to complete a marathon bail hearing that was adjourned overnight when four defendants were rushed to hospital after hours of legal wrangling. Police on Sunday arrested 47 of the territory’s best-known dissidents for “conspiracy to commit subversion” in the broadest use yet of a sweeping National Security Law that Beijing imposed on the territory last year. The defendants represent a broad cross-section of Hong Kong’s opposition, from veteran former pro-democracy lawmakers to academics, lawyers, social workers and youth advocates. Hundreds of supporters gathered outside a courthouse on Monday for the
China, under growing global pressure over its treatment of Uighurs in Xinjiang, is mounting an unprecedented and aggressive campaign to push back, including explicit attacks on women who have made claims of abuse. As allegations of human rights violations in Xinjiang mount, with a growing number of Western lawmakers accusing China of genocide, Beijing is focusing on discrediting the female Uighur witnesses behind reports of abuse. Chinese officials have named women, disclosed medical data and information on their fertility, and accused some of having affairs and one of having a sexually transmitted disease. Officials said that the information was evidence of bad character,