social currency

Social currencies increase employment and income in Brazilian communities

Inspired by The Future of Money Project, we have translated the present article from Mercado Ético, originally written by Naná Prado, from Instituto Akatu. Special thanks to Christina Carvalho Pinto and Henrique Carvalho.

We all know the dollar, the real, the euro. But have you ever heard of the Apuan? And what about ‘freires’, ‘sampaios’, ‘vistas lindas’ or ‘moradias em ação’, do you know? They are the five social currencies accepted by the trade in some communities in São Paulo since last year. This means that in some neighborhoods the Real ( the official brazilian currency) is not the main currency.
In Jardim Filhos da Terra neighborhood, in the north, traders have accepted the Apuan. In Jardim Maria Sampaio, in the south of the town, the currency that circulates is the Sampaio. The Freires are accepted in the Jardim Inacio Monteiro, in the east, the vistas lindas in Jardim Donária in the west, and the Moradias em Ação in Jardim São Luiz, in the south.
“The social currency is very important to the community because it makes wealth circle around the neighborhood. This happens because it is accepted only by businesses enrolled in the district Community Bank, enabling those enterprises to make the exchange of social currency to Real “, said Diogo Jamra Tsukumo, coordinator of the Solidarity Economy (NESOL) at University of São Paulo (USP).
The Community Banks are projects that support the popular economy of  communities with low Human Development Index and provide solidarity financial services in a network of associations and communities. In addition, community banks operate to generate employment and income by promoting the social economy. The community banks belong to the community, which is also responsible for its management.
Tsukumo says that the social currency allowsa greater circulation of wealth in the community, increasing numbers of economic transactions and enabling local economic development. In this respect, both residents of the community, who get access to credit, and local businesses, which gets more clients, win.
“For many people in the community, this project was a dream. Now everyday we see an improvement in the self-esteem of everyone, “says Hilda Pires, manager of the Apuan Bank, created in June 2009 as part of the Housing Development. Hilda is part of the Landless Movement for Housing in the north of Sao Paulo, which has the support of the Technological Incubator of Popular Cooperatives of the University of São Paulo (ITCP / USP).
Just over a year after the establishment of the Bank Apuan, Hilda is confident that the community is reaping good results, “today we have a sewing cooperative in full development, a cooperative of cleaning products and once a month we conducted a fair to sell all products made by the community. ” But none of this would be possible without the bank Apuan. “In addition to local development we have increased the demand for jobs and, consequently, the income of residents as well,” concluded the manager of the bank.
Throughout Brazil, there are currently 51 social currencies. They do not replace the Real – the idea is that they work in a complementary way to the national currency, developing local economies. For this purpose, they must have real backing , which means that for every amounty of the social currency there must be a real currency saving. Recognized by the Central Bank, the social currency needs to be created in communities with a well structured neighborhood association.
According to the coordinator of the Solidarity Economy of USP, the currency is an instrument of exchange and it is important to boost its circulation and reduce the idea of accumulation. “The social currency creates and recovers the identity of the community, enhancing local production and generating development in all senses of the word in a given community,” he says Tsukumo.
The social currency shall not prevent a bank customer who was benefited from a consumer credit (in social currency) to spend this resource on any product that is available the neighborhood. This means that the consumer does not necessarily need to buy any object produced by the community. He can buy any product offered on the market or nearby pharmacy.
For the coordinator of USP, what really guarantees the responsible consumption of products is the educational process and cultural transformation that occurs with the implementation of a Community Bank and a social currency.


Tsukumo believes that a process involving campaigns for local consumption and support of solidarity economic enterprises is an interesting way for future sustainability and conscious consuming in communities. Combining these points to productive and to actions by the credit agent, enterprises can offer alternatives to the consumption of neighborhood residents.
“The system also has an identity function, it allows  people to consume in the neighborhood where they live, using a currency that has the name of the neighborhood,” says Tsukumo. To encourage the public to use the social currency, traders call for discounts. This way money is getting in the community. “The more money staying in the community, the more it will circulate internally and will generate more wealth. The more times it passes from hand to hand, the more you will be creating value and wealth. ”
Besides discounts, maps of consumption and production to evaluate consumers needs versus local production is made to foster the growth of the use of these currencies. The community also organizes forums to discuss issues such as interest and guidance of community banks in granting credit.
Tsumuko believes that the potential growth of these experiments is as large as the number of communities in Brazil and worldwide. “Even more now that the Central Bank at the end of last year, has created a working group by an agreement with the National Solidarity Economy Ministry of Labor and Employment to study these innovations, publicly acknowledging the importance and value of these initiatives for the development of communities and the country, “he argues.

Did you know?
The first Brazilian community bank was Palmas Bank, which appeared in 1998 in the Conjunto Palmeira, a neighborhood on the outskirts of Fortaleza. In 2003, the community organized itself and established the Palms, which is now responsible for the opening of most community banks in the country, among them those in São Paulo. The expectation for the next two years is that 100 community banks to be created over throughout Brazil.
– Ceará is the state that focuses more on social currency. In small municipalities, they can be used in the whole city. This is the case of Acaraú, Tamboril and Paramoti.
– The social currency also exist in other countries. In Argentina, they came to reach nearly 1 million people, after the 2001 economic crisis.