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A New Kenyan Currency
Jeremy Faludi, 5 Jul 05

The BBC reports on microcredit in Kenya; it's more good news about that meme's success, but an extremely exciting new tidbit is buried towards the end of their article: The recent creation of mobile-phone minutes as a tradeable currency.

Safaricom is Kenya's largest mobile phone company, and almost the country's biggest company... it is run by a thoughtful South African engineer called Michael Joseph. Just the other day he unveiled a new service allowing Safaricom subscribers to buy prepaid phone cards which then enable them to transfer any selected amount of surplus minutes to other subscribers, using text messaging.

You can pay a supplier with it, or even create a little bank of phone call credits to sell to others. What Michael Joseph has actually done is to create a new currency --a cyber currency that can be sent anywhere in the country at the press of a button, without needing a bank account or incurring high bank charges. You see what's happened: the mobile phone is multiplying its revolutionary impact on the lives of the poor, giving them facilities once available only to the rich.

Interest-free currencies circulating within communities can have big benefits which we've described before. And that's in addition to the normal leapfrogging due to cell phones which the BBC describes earlier in the article: "Shopkeepers...are text-messaging their suppliers. Hours of travel and the sending of letters or messages are replaced by a phone call. Farmers are getting accurate information about the market price of their crops as they harvest them."

(Thanks, George Irish!)

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Comments

Carbon credits could become another interest-free currency. Small greenish businesses trading amongst their own network of partners, could exchange credits in parallel to $$$, for example, while still transacting their usual fees and invoices.


Posted by: Paco NATHAN on 5 Jul 05

Except, of course, the minutes can't be transferred between mobile phone companies, making them a non-convertible currency, and the value of the currency fluctuates due to competition in the mobile minute market, or even the whim of the cell phone company.

C'mon, bankers, would it really be so difficult to create a real currency that could be managed via electronic networks?


Posted by: Randolph Fritz on 5 Jul 05



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