#### STICHTING BAKENS VERZET

#### 1018 AM AMSTERDAM, THE NETHERLANDS

Director,

T.E.(Terry) Manning,

Schoener 50,

1771 ED Wieringerwerf,

The Netherlands.

Tel: 0031-227-604128

Homepage: http://www.flowman.nl

E-mail: (nameatendofline)@xs4all.nl : bakensverzet

## MODEL FOR SUSTAINABLE SELF-FINANCING INTEGRATED RURAL AND POOR URBAN DEVELOPMENT FOR THE WORLD'S POOR

Incorporating innovative social, financial, economic, local administrative and productive structures, numerous renewable energy applications, with an important role for women in poverty alleviation in rural and poor urban environments.

"Money is not the key that opens the gates of the market but the bolt that bars them"

Gesell, Silvio The Natural Economic Order

Revised English edition, Peter Owen, London 1958, page 228

Edition 14: 17 April, 2007

5.21 : PRINCIPLES OF THE LOCAL MONEY SYSTEMS.

Establishing local exchange trading (LETS) systems to overcome the chronic lack of "formal" money in the project area is fundamental to the project. LETS systems create local currency units to exchange goods and services. They eliminate common complaints concerning the operation of development projects such as:

"There's no money to pay people to write out the water bills"
"There's no money to collect the monthly contributions"
"The people can't afford san-plats for their toilets"

Very often, all that is needed is a way to transfer goods and services within the community without having to use formal money. This helps to avoid financial leakage from the local economy system.

New Economics Foundation, Powerpoint presentation on local economies "Plugging the leaks".

New Economics Foundation, Handbook on "Plugging the leaks" in local economies.

We propose to make participation in the LETS systems compulsory for all people in the project area of working age because everybody will benefit from and participate in some of the community level initiatives undertaken within the project. For instance, PV lighting for study will be financed at local tank commission level and its costs written off against the users in that tank area only. Others, such as tree-planting or road building may benefit the whole community and every member will be charged for his share. Compulsory membership is also needed where common assets are being used or sold or when goods and services for the project have to be supplied in the local currencies.

Nearly all LETS transactions are open to normal "free market" negotiation between the parties.

Many goods and services like those provided by the Community Health Clubs, and those needed to build the sanitation and water supply services can be paid for using the LETS systems. We have included formal currency estimates for these goods and services so that enough micro-credit loan money is available to start developing local production.

LETS system(s) will be set up in (name of places.)

The local money system(s) is organised at tank-commission, well-commission, and central management level.

The structure of the local money system(s).

At the level of each of the (200) tank-commissions in the project area a number of facilities are set up. These include:

- professional assistance for completing transactions (at least one job for each tank commission area).

- points for the deposition of transaction slips.

- information boards.

- fixed agenda point during tank-commission meetings.

- transfer of transaction slips for registration.

Transaction registration centres are built and equipped at the level of each of the (35) well-commissions in the project area. Each centre can support from 2 to 6 transactions registration staff, with a registration rate of 200 transactions per hour, for one, two or three shifts. Maximum daily capacity is therefore 4.800 transactions, or about three transactions per day for every adult in the well commission area. The registration centres keep back-up, electronic and paper records of transactions.

The transactions centres liaise with the central system management.

The central system management keeps back-up, electronic and paper records of transactions and prepares statistics. It liaises with other local money systems, resolves operational conflicts, and is responsible for any decisions not taken at tank-commission and well-commission level.

For detailed information on LETS systems refer to:

Annexe 06: Simple LETS course.

Annexe 07: LETS UK information pack.

Annexe 21: Computerised administration of local money systems.

THE LETS LOCAL MONEY SYSTEMS

(One, two, three, four) Moraisian workshops will be held, one for each local money LETS system.

Indicative participation (all workshops together)

The Moraisian trainers.
The project coordinator.
The general consultant.
2 representatives of the NGO.
Representative of the Finance Ministry.
Representative of the Rural Development ministry.
At least 5 observers (possible coordinators for future projects).
100 persons, indicated by the well commissions, who will have indicated their interest in registering transactions.
400 persons (men and women) indicated by the Tank Commissions interested in taking responsibility for the management of the LETS systems at tank commission level.

Duration of (the, each) workshop: about six weeks.

The Workshops will be expected to produce the following structures:

a) Definition of the social form of the LETS structures
- statutes.
- rules.
- professional and administrative structures.
- financial aspects.
- relationships with other non-formal local money systems.

b) Structure for the registration of transactions.
- physical working space (offices).
- adaptation of environments against weather and dust.
- safety and back-up procedures to protect information.
- purchase of computers, printers, equipment for registration of members et electrical connections eventually using PV.
- distribution of physical structures: LETS boxes, notice boards.
- preparation of cheques or other instruments of exchange to be used.
- publication of the services available within the system.

c) Coordination with users.
- preparatory meetings with users at tank commission level.
- presentation of the local coordinator.
- registration of members.
- distribution of cheques or other instruments of exchange.
- starting transactions.

d) A communications structure.
- vertical, at project level (project coordinator, transaction registrars, those responsible at tank commission level, users).
- horizontal, with the various persons responsible at the same level (amongst transaction registrars, amongst tank commission level operators).
- horizontal, amongst local money systems.
- commercial, radio, website

Forward: micro-credit structures.

Back: environmental impact report.

Complete index of the Model.

Main menu for the Model.

List of drawings and graphs.
Typical list of maps.
List of key words.
List of abbreviations used.
Documents for funding applications.

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