Co-operatives in practice

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Co-operatives in practice

Postby stefano » Tue Jul 26, 2011 8:43 am

Residents buy their mobile home park

By Matthew Smith
Curry County Reporter
Published: July 13, 2011

Driving up Jerry's Flat Road passing motorists may not notice a change at Anchor Mobile Home Park, but for homeowners in the park it is a whole new world. Sure the sign in front now reads Saunders Creek Homeowners Cooperative, but the change goes way behind a new sign welcoming residents and visitors to the community.

The park officially became a homeowner's cooperative on April 26, which means residents will have the option of buying into the cooperative in exchange for controlled rent spaces. Residents can bow out of the cooperative, but with a higher monthly rent for their space.

"The land at the park was up for sale, and residents started to worry about someone coming in and jacking up our rent. So the idea for homeowners in the park to purchase the land to be in control of the park started to circulate," commented resident Vivian Downs. "It is nice knowing as residents we have more control of our futures than we may have had with someone else stepping in and purchasing the park."

The park, which consists of 43 mobile home spaces, was purchased through private loans and funds from the residents and grants to help the homeowners achieve their goal.

"CASA and the other organizations that helped make this a reality have been amazing, and they are continuing to help us into the management portion of the transition," said Downs.

The organizations that helped with the purchase and development of a non-profit homeowners organization are: Community and Shelter Assistance Corporation (CASA of Oregon), the Rural Community Assistance Cooperation (RCAC), Oregon Housing and Community Services, and the Community Development Law Center.

So what are the major differences between the homeowners purchasing the land versus another person or management company? The most important is that under the rules of the cooperative, the land must remain as a mobile home park. In traditional sales, the land may be developed as the new owner wishes within the law meaning residents could face eviction or higher space rent even if the land remains a mobile home park. Also under the Oregon standards for homeowners-owned parks, it must remain a manufactured home park and can be sold in the future only to a similar non-profit entity.

The cooperative is the first of its kind in the area, but CASA recently helped Horizon Homeowners Cooperative in McMinnville and Green Pastures Senior Cooperative in Redmond reach the same status. RCAC has help convert seven resident-owned communities throughout the rural western United States.

"We did it," commented David Hanna, president of the resident-controlled board, "with help from RCAC and CASA of Oregon, [and] the dream of owning our community became a reality. It also wouldn't have been possible without the efforts of former resident and board member Kate Rambo. She was the driving force in making the purchase a reality."

CASA of Oregon will continue to provide technical assistance to the cooperative, delivering management training and utilizing available resources to help individual residents upgrade or replace their homes.
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Re: Co-operatives in practice

Postby stefano » Sun Oct 13, 2013 1:45 pm

A Kenyan community's currency, Bangla-Pesa faces trouble

Nairobi has brutally slammed a Mombasa-based complementary currency scheme that offered one local community a path out of poverty.

Few places on earth embody income inequality quite like Bangladesh, a great dusty slum on the outskirts of Mombasa. Home to 26,000 people, it sits atop an ascetic crossroads about 5km from the five-star resorts studding the Kenyan coast.

Some people are prostitutes; others are thieves. If they use this project then they can lift up their lives

The main, winding mud track through town is clogged, and many people cannot afford the KSh20 ($0.20) ride into the city. It was the perfect place, argued economist Will Ruddick, to start an alternative or complementary currency (CC).

But after less than a month the government shut down the newly launched Bangla-Pesa scheme in late May and jailed him and his collaborators on charges of forgery.


CC systems, of which there are around 4,500 worldwide, are commonplace in Europe, Asia and particularly South America, where systems in Brazil and Venezuela have led the way.

But aside from the Doole project launched by a women's group and a non-governmental organisation in Dakar in 1998, and Cape Town's Community Exchange System – which has no physical currency and is a system of exchanging goods and services – Africa has lagged behind other regions.

This is chiefly because of the interventions of central banks and a continued demand for microfinance.

Ruddick is a former United States Peace Corps volunteer and an economic development expert. He worked alongside Koru Kenya, a Mombasa-based charity, to implement Bangla-Pesa.

The currency is based on a system of multilateral reciprocal exchange.

Starting on 11 May of this year, 109 businesses in Bangladesh signed up to the scheme by contributing KSh400 each, which acted as mutual credit. Of that, KSh200 was retained to be spent in the community on projects such as drainage systems and schooling.

There were 1,000 tokens circulating in denominations of 5, 10, 20 and 50. Within a fortnight, local trade was up 22%. More than 83% of users reported increased sales.

Koru Kenya had other experience with alternate currencies after working on a pilot project, Eco-Pesa, in the Kongowea region of Mombasa in 2010 and 2011.

Eco-Pesa used vouchers as a means to strengthen local businesses and to encourage participation in donor-backed health and environment programmes.

The backers reported that three-quarters of the businesses in the Bangla-Pesa network are operated by women, many of whom live in extreme poverty.

Mildred saw a big increase in trade at her shop after the launch of Bangla-Pesa. She exchanged her excess goods for Bangla-Pesa.

Because the system was mutual, on Mondays – the slowest day for trade in Bangladesh – those who could not afford eggs used Bangla-Pesa to buy them from Mildred, preventing them from languishing in the shop and going bad.


Paul, a greengrocer who has lived in Bangladesh his whole life, normally buys a box of tomatoes for KSh500. If he sells all of them, he could make KSh700 profit.

But frequently he could not, which meant that if Paul needed supplies or a ride across town, he might have to sacrifice a meal or two.

"Before it was only survival," he says. "We were doing good business, but there was no money."

With Bangla-Pesa, Paul could trade excess tomatoes for Bangla-Pesa instead of shillings, which were at a premium on some days due to remittances or the payment of school fees.

But on 29 May, the authorities, tipped off by a journalist, banned Bangla-Pesa and threw Ruddick and five others from Koru Kenya in jail – first on charges of treason, then later forgery.

The case remains open and all six are facing the possibility of seven-year sentences. The next hearing is planned for 22 August.

The Bangla-Pesa team included members of Alpha and Omega, a community group headed by Alfred Sigo.

"I am one of the ones who could be going to jail," he said, at the group's tiny office. "The government has got this all wrong."

Bangla-Pesa supporters argued the government felt threatened by anything that supported a strong local identity due to the presence of the separatist Mombasa Republican Council.

Kenya's central bank also does not support CC systems that challenge its dominance atop the national economy. The central bank did not respond to The Africa Report's requests for comment.

"The transactions were actually around KSh100 per day [per person]," says Ruddick. "This wasn't a replacement for shillings. In fact, people were just selling their excess capacity. The shillings stayed the same."

Ruddick and Koru Kenya had planned to create a system that would allow for the exchange of Bangla-Pesa via mobile telephones before the end of the year, but any new developments will now depend on the outcome of the court case.

"As we already know, the roots of poverty are a lack of education, skills training, opportunities for production and distribution, and access to money and credit," explains Stephen De Meulenaere, founder of the Complementary Currency Resource Center.

"If we can find an integrated solution that deals efficiently with each of those roots," he says, "then we can say that the Bangla-Pesa and thousands of other currencies like it are a very necessary vehicle for people to put poverty behind them."

Meanwhile, the community of Bangladesh is waiting for the central bank's next move. Many have since stashed their notes away.

Paul is frustrated that the government is missing a chance to transform the lives of some of its most disenfranchised citizens.

"We lack jobs here," he said. "Some people are prostitutes; others are thieves. If they use this project then they can lift up their lives. When the government knows that this brings a profit to our people, then we will be good," added Paul.

"We are low value. We are not hurting anyone in the government."●

Bangla-Pesa: Slum Currency and Implications for the Poor in Developing Countries
Mwangi S. Kimenyi and David Muthaka | July 17, 2013 5:27pm

First came M-Pesa, the now famous mobile phone money transfer system in Kenya, which has made it possible for millions to access the life-changing financial services previously not available to them.

Now there is Bangla-Pesa, a complementary currency that has become a medium of exchange in the Bangladesh slum in the city of Mombasa. Bangla-Pesa—appropriately named as it is only accepted within the confines of this particular slum— is a voucher that traders and service providers are using to do business. Unlike vouchers that are used for a particular good or service, Bangla-Pesa coupons are accepted for many transactions and therefore represent a complementary currency acting as a means of exchange in the slum. For this slum, Bangla-pesa operates alongside the official government issued currency.

One feature of slum economies is business volatility. Sometimes within a month, businesses are booming and demand for goods and services is high. This could, for example, coincide with times when workers receive their wages. However, good times are often followed by downturns within the same month, where economic activity quickly slows down. A survey conducted in the Bangladesh slum in Mombasa found that many residents were not able to get basic necessities during periods of business downturns.

Consider a bicycle operator who provides transportation services in the slum. He can make enough income for sustenance if he makes 20 trips a day. However, during the slow periods of the month, demand for his services might be only 10 trips a day. Thus, he won’t make enough money to buy groceries and put food on the table. In the same slum, there is a grocer facing similar problems of low sales, and she needs transportation services to get around the slum. Yet, both slum traders don’t do enough business during the slow periods and therefore have to go without certain goods and services during these times.

But now introduce Bangla-Pesa (BP), vouchers with designated values, into the slum. Businesses that are members of the Bangla Business Network enroll in the program, which distributes an equal number of vouchers to each member. In addition, all the members agree to honor the vouchers as means of exchange. Now when all or some of the traders experience downturns in their business, they can make business transactions among themselves with Bangla-Pesa. Given that the bicycle operator needs to purchase some groceries, he will give the grocer BPs (amount depending on quantity of groceries). The grocer accepts the BP vouchers and gives him the groceries he needs. When the grocer needs to get somewhere via bike, she can go to the bicycle operator (who is also a member of the Bangla Business Network) and take a ride using her BPs. The transactions do not have to take place simultaneously. This is not a barter trade system because the vouchers are used to make transactions for many goods and services among all members of the business network. As a result, the traders in this slum are able to engage in a whole range of transactions using Bangla-Pesa.

The Bangla-Pesa program aims at cushioning residents against falling below the poverty line during periods when business slow and poor. The program also aims at stimulating the local economy and assists its members in trading their excess capacity. The idea is that this will increase overall efficiency in the market. The program therefore seeks to create an avenue for the poor to enhance their participation in a market economy. It should provide a means for the poor to purchase goods and services from the market even without normal currency.

The Bangla-Pesa program seeks to cushion the poor whose flow of money is often limited and sporadic. It is only used within the membership network and serves as a mutual-credit clearing (or multilateral reciprocal exchange). It is described as credit since traders receive goods and services without paying any cash (they only present the coupons).

A survey of the impact of the Bangla-Pesa program reports impressive results. Around 83 percent of participants in the program reported that their total sales were increasing as a result of the vouchers with only 0.05 percent reporting a decline in sales. Average daily sales through Bangla-Pesa represent 22 percent of the total daily sales reported by businesses from the baseline level. However, daily sales reported through Kenyan shillings have not changed from the baseline level. This suggests that the 22 percent of daily trades conducted with Bangla-Pesa represents additional sales which might not have happened without the program. Overall, the use of the complementary currency appears to expand market exchanges in the slum.

It is often claimed that complementary currencies strengthen community spirit, increases community participation in social and economic activities, reduce imports into the community, and lead to improved quality of life. The evidence from the survey seems to suggest that this program is having a positive impact on participants.

A quick review shows that complementary currencies are a growing phenomenon in developing countries. It does appear that such complementary currencies help ease indentified constraints facing poor people. But questions about the broader implications of using a complementary currency such as Bangla-Pesa remain unanswered. For example, could such use of a localized currency weaken linkages with other communities and the larger economy? What might be the impact on the economy if many other slums in country or city adopt their own complementary currencies? Is this a program that should be restricted or regulated? Is it a case of “bad money” driving “good money” out? These are questions that researchers should explore before complementary currency programs explode in Kenya and other developing countries.
Bangla-Pesa Survey Results

Initial baseline studies showed that the business community of Bangladesh Kenya had a large capacity for trade that was not being utilized due to a lack of an exchange medium. Following several weeks of registrations and Bangla-Pesa deliveries, 109 members received their Bangla-Pesa and were ready to trade their excess capacity. One week after the initial launch of the Bangla-Pesa, a follow-up interview with 49 Bangla-Pesa users was done.

Bangla-Pesa Circulation

On average, business owners reported using around 70 Bangla-Pesa a day for purchases at 4 other member businesses. However, of those surveyed, 12 reported not yet using the Bangla-Pesa. If we assume these usage rates are the same for all 109 individuals using Bangla-Pesa, 82 people were likely actively using a total volume of 5,740 Bangla-Pesa daily.

Business owners also reported receiving 65 Bangla-Pesa a day at their businesses from around 4 other members. This suggests member businesses were both spending and receiving Bangla-Pesa at a similar rate and from a similar number of individuals. And, in fact, they tended to be both buying and selling goods from a very nearly the same group of 4 businesses. Each trade was for items valued at between 5-170 Ksh, with an average of 34 Ksh.

Sales Changes

The vast majority of members using the Bangla-Pesa felt that their business was benefiting from the vouchers. 83.33% reported that their total sales were increasing, and only 2 people (0.05%) reported decreases in sales.

Average daily sales in Bangla-Pesa represent 22% of the total daily sales reported by businesses in the baseline survey. At the very least, then, businesses were doing around 22% of their trades in Bangla-Pesa. However, this number remained the same for those businesses who reported that their sales in Kenyan shillings had remained stable. This suggests the 22% of daily trades done with Bangla-Pesa represent additional sales which might not have happened without this means of exchange (at least for those 12 people whose sales in Kenyan shillings remained the same). And, since most people reported an increase in total sales, it seems likely they are experiencing a similar increase in sales.

Economic Changes

Should this program continue in a similar manner, we expect to see an overall increase in local market stability. The fundamental driver of this stability and increase in trade is due to the member’s ability to trade their excess capacity. For instance a bicycle operator may have the capacity for 20 customers, but in general only has 10. Now he can give rides to those businesses in exchange for goods and services they have in excess, such as a woman who has extra tomatoes to sell. This increases the overall efficiency of the market and helps the community weather poor economic periods.
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Re: Co-operatives in practice

Postby stefano » Sun Oct 13, 2013 1:46 pm

From a comment by Will Ruddick on one of those articles:

This video shows how a huge (60k+ members) program works in Switzerland

Here is a report from: 20 years of barter networks in the US. ... urrencies/
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Re: Co-operatives in practice

Postby Elvis » Sun Oct 13, 2013 2:28 pm

Good thread, thanks.

Mark your calendars:

Oct. 17 is International Credit Union Day :yay
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Co-operatives in practice

Postby stefano » Fri Mar 14, 2014 3:17 am

Worker-owned firms in Scotland 'more successful'
13 March 2014

Businesses owned by their employees outperform their competitors on employment, sales and productivity, new research has found.

A team from St Andrews, Edinburgh Napier and Stirling universities looked at what they have called the "John Lewis economy" in Scotland.

They said there had been "considerable growth" in the number of such firms.

They identified 45 employee-owned firms headquartered in Scotland, which employ about 2,500 people.

Recent examples of firms becoming employee-owned include AquaScot, Clansman Dynamics, Voice Technologies and Woollard & Henry.

The universities said their study marked the first time Scotland's employee-owned firms had been examined in a detailed way by academic researchers.

Lead author, Dr Ross Brown, of the University of St Andrews, said: "The John Lewis economy is alive and well in Scotland.

"However, it appears that it is small dynamic SMEs who are most eagerly embracing the employee-ownership model in Scotland."

He added: "Scots employees appear to be very successful capitalists and employee involvement seems a very good recipe for the success of these businesses."

Prof Robert Raeside, who also contributed to the study, said: "The performance of Scottish employee-owned businesses is generally superior to their counterparts on a number of different variables.

"In terms of their employment and sales growth, employee-owned firms do better than non-employee owned firms."

Prof Ronald McQuaid, from the University of Stirling, said: "These findings largely mirror other research undertaken elsewhere in the UK and abroad and further strengthens the evidence base concerning the growth performance of employee-owned firms."

Prof McQuaid claimed the findings suggest that "support for fast growing employee-ownership firms is likely to lead to benefits throughout the Scottish business community."

A spokesman for Clansman Dynamics said the company had seen turnover, productivity, profits and employee numbers increase significantly since becoming employee-owned in late 2009.

He added: "Employee ownership has help produce a workforce who are both knowledgeable and engaged in our markets and product development strategy."
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