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Grassroots Economics

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Grassroots Economics is both a nonprofit foundation based in Kilifi, Kenya, and the economic model it pioneers. The model builds resilient local economies from the bottom up, starting from a community’s own needs, resources, and commitments rather than from the scarcity of national currency or the volatility of external markets. Its mission is to empower marginalized communities to take charge of their own livelihoods and economic future.

The approach rests on community inclusion currencies and a coordination mechanism called commitment pooling, which lets people formalize and exchange promises of goods and services without depending on national money. This makes it possible to incubate projects and enterprises even when conventional currency is scarce.

The Foundation

Founded in 2010, the Grassroots Economics Foundation focuses on community development through economic empowerment. Since its inception it has supported more than 26,600 people across over 290 communities. Its work aims to build thriving economies grounded in the abundance of local resources and commitments, while supporting ecosystem restoration.

All of the foundation’s software and tools are open source, released under the copyleft AGPL 3.0 license to encourage global adoption.

Core Principles

Community empowerment: Marginalized communities take charge of their own economic development by valuing their local resources (skills, goods, services) instead of waiting for external investment or humanitarian aid.

Community inclusion currencies (CIC): These are local exchange systems based on digital vouchers (eVouchers) that let community members trade goods and services without relying on the national currency. As complementary currencies, they create local liquidity even during economic crises or shortages of national money.

Commitment Pooling

Commitment pooling is the central innovation of the model. It allows individuals to:

  • Formalize their commitments to provide goods or services as Community Asset Vouchers (CAV)
  • Pool these commitments into collectively managed “pools”
  • Exchange the vouchers among community members, creating a multilateral exchange network

Unlike traditional employment systems where power is hierarchical, commitment pooling establishes reciprocal and equitable relationships between providers and beneficiaries of services. Conceptually it is close to mutual credit, modeling exchange as flows of commitments between agents rather than transfers of scarce tokens.

Sarafu Network

The Sarafu.Network platform is the concrete implementation of this model in Kenya. Running on a blockchain (xDAI), it enables:

  • The issuance of community tokens (new members receive 400 Sarafu on registration, roughly equivalent to 400 Kenyan shillings for local purchases)
  • Transactions without an internet connection, accessible from a mobile phone
  • Full traceability of exchanges through blockchain technology
  • A significant multiplier effect: studies show that 30 USD in CIC tokens generates roughly 93 USD of balance across beneficiaries’ wallets

Between January 2020 and June 2021, the Sarafu network facilitated more than 400,000 transactions among 40,000 users, circulating 293.7 million Sarafu tokens.

Impact and Goals

The grassroots economics model aims to:

  • Build economic resilience: maintaining local exchange even during monetary crises or shortages of national currency
  • Improve food security: preliminary data show a meaningful impact on access to food in marginalized communities
  • Advance financial inclusion: enabling unbanked populations to participate in the formal economy
  • Restore ecosystems: integrating environmental stewardship into local economic models

The result is an alternative to conventional economic systems, prioritizing cooperation, transparency, and local economic sovereignty over dependence on global markets.

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