Frequently Asked Questions (FAQ)¶

This FAQ accompanies the Training Guide and the Glossary.

Frequently Asked Questions (FAQ)

Basics¶

What are Community Asset Vouchers (CAVs)?
- CAVs are tradable Vouchers, redeemable as payment for goods and/or services of issuers or other participating individuals, organizations, schools, shops, groups, farms, and clinics. Anyone can create their own CAV which can act as a local means of trade and exchange that does not replace but rather supplements (tops-up) lacking national currency. Through increasing trade by matching unmet local needs with under-utilized local resources CAVs enable sustainable economic, environmental and social development. Here you can see our definition of a Voucher.
- Note that we will often call all CAVs on Sarafu Network a Voucher or Sarafu.
How do you create a CAV / Voucher / Sarafu?
- People, groups (chamas) and organizations can issue or create a CAV by creating a backing guarantee or Commitment Agreement - see Voucher creation under Operations.
What is my CAV’s exchange rate?
- When creating a CAV you specify the unit of account. Generally issuers create CAVs denominated in a small unit of their services or goods, like on minute of specific work or 1 egg.
- There is no official exchange for CAVs and national currency - the only guarantee is redemption for goods and services of the issuers - as payment in-lieu of, or in addition to national currency. Please check if your CAV is within any Commitment Pool on https://sarafu.network
How do you get more CAV?
- Buying: By allowing users to buy your goods or services using CAV, this is considered barter trade as you should be able to spend the CAV you receive back at other users in the community. This doesn’t change the CAVs exchange value. n.b. You could also call this selling your Vouchers in-kind. Note that while vouchers can be exchanged for other vouchers or goods and services they can also be exchanged for (purchased with) national currency - but there is no guarantee of redemption for national currency.
- Creating/Minting: People, groups (chamas) and organizations can issue or create a CAV by creating a backing guarantee as part of their Membership Agreement - see Operations.
- Redistribution: A group creating a CAV may give out CAV to members and collect it back as a tax and redistribute for community support.
What is the difference between Sarafu (SRF) and other Vouchers/CAVs on Sarafu Network
- Become a user: When someone first creates a CAV wallet on Sarafu Network they get some (currently 5 but it may change depending on the supply avalible) Sarafu (SRF) tokens. These Vouchers are used to train people how to use the system and prepare for making their own CAV.
- Refer to new users: Sarafu (SRF) is often given as a reward to the first person who trades with a new user.
- SRF is the Voucher of Grassroots Economics Foundation and redeemable for our services such as Voucher creation and training.
What are the benefits of using CAVs?
- Meet basic needs: enable people and their community to meet daily needs during the hard times of the month or year or during a crisis.
- Increase trade: increase your daily sales and customers; and to save more National Currency for needs outside the community.
- Reduce Informal debt: instead of trading increase your daily sales and customers; and to save more National Currency for needs outside the community.
- Strengthen local markets: create a strong community network and market (allowing people to meet, share ideas, trade goods and services and to launch group programs and initiatives).
- Community participation: enable greater participation in community events
What are the benefits of creating CAVs?
- Leverage: By committing resources backing CAV you create a credit (with no interest) against your future production and multiply your purchasing power.
- Share holders: Because CAVs derive their value from social backing (acceptance of goods and services) - by holding CAVs members hold a share of a fiscal commons. This gives holders a stake in the local economy.
- Traceability: Since people and even donors can see anonymous trading data they can choose to support a CAV that is supporting a community in need. CAV's can in turn be purchased by humanitarian orgs and redistributed to both help empower and support vulnerable communities.
Why is it important to keep CAVs circulating?
- The more CAVs are exchanged among members, the more it they develop the local economy. If they stops circulating, they stops helping people trade. As much as anyone spends a CAV they should also be accepting CAV for any goods or services to support the community.
- The impact a CAV has on the local community and economy is higher the more CAVs are used (multiplier effect).
Trade Balance (TB)
- TB can be defined as the amount of CAV spent by the amount of CAV received for goods and services minus the amount they have spent. The goal for good circulation is to maintain a 0 trade balance. Voucher Issuing Members wishing to leave the network should also come back to a zero trade balance before leaving.
- A TB less than zero represents a situation where they have spent more than they have accepted back and are therefore in debt to the community and should accept more CAV.
- While a TB greater than zero would represent having received more CAV than they have spent and the user should spend more CAV in the community.

Running a Business¶

How do I top-up my CAV once I have used it?
- Try to buy using your CAV each day and try to sell your goods with CAV each day. Balance your purchases and sales.
- Get CAVs for volunteer work from supporting organizations.
- Create your own CAV.
How do I cash-out my CAV to get National Currency?
- This is not possible.
Who is a CAV Issuer?
- Any group can issue a CAV by completing a Membership Agreement. Generally these are community groups with the permission of Village Elders/Admins.
Who are CAV holders?
- Anyone agreeing to the Sarafu Network Terms and Conditions can have a CAV account via mobile phone and is considered a Member of the Grassroots Economic Commons. The CAVs stored in your account are yours alone and represent an investment you hold in an economy made up of other CAV holders.
How much CAV should I keep?
- Your balance may go up and down but on average you should match your spending with your income of CAVs.
- If you decide to hold CAVs long term you are investing in the growth of the economy they represent (markets and businesses using the CAV).
What should I do if I have too many CAVs?
- If you receive more CAV than you are able to spend, you can solve this problem by:
  - Finding workers or businesses to buy services from using CAVs
  - Enrolling businesses that you want to spend CAVs at!
  - Giving CAV as change to your customers or as top ups or salary advances to your workers.
  - Contact the CAV issuer or group and explain the situation and ask for help.
What should I do if I have too little CAVs?
- By spending your CAVs you have received goods and/or services from other users. You must accept CAVs back for your goods and services.
- You need more customers with CAV. Have your customers register and advertise yourself to more members.
- If no one is buying your goods and services using CAV
  - Contact the CAV issuers or chama
  - Enroll your clients and get a referral bonus
  - Buy goods and services from members in Kenyan Shillings and accept change in CAVs.
What should I do if other members are not accepting CAVs 1:1 with national currency as indicated on the CAV?
- Make sure the member understands the program; they might not understand how to price their items using CAVs
- Give the person a chance to explain why they are not accepting it and try again later.
- If the member has too much CAV already, help them find a way to spend it.
- If all else fails, report the user to the CAV issuer or chama or local chief.
How should I price my goods and services in CAVs?
- Price of goods or services should be that same price in CAVs as that used for National Currency.
- In general accept as much as you think you can use. It is your responsibility to make sure that you can use all the CAVs you receive.
What happens if a CAV Issuer stops accepting back CAVs?
- There are repercussions as per the Membership Agreement and the issue can be taken to arbitration and the local administration.
Restocking: If I buy stock and my supplier isn’t a member, how can I buy my supplies and stock with CAVs?
- If your supplier isn’t a member, explain to them the benefits of creating more business. Vouchers are a normal part of many businesses.
- If your supplier refuses to become a member, you will make sure to accept as much Kenya Shillings as you need in addition to CAV to buy your stock.
- Accepting CAV for your profit margin only is a way to avoid not being able to restock.
- Ultimately it is up to the CAV user to make appropriate business decisions.

Group usage and Regulation¶

How are CAVs regulated?
- On August 23^rd 2013, Bangla-Pesa which is a CAV was deemed by the Director of Public Prosecution in Kenya to not have broken any laws.
Do CAVs expire?
- CAVs gradually expire in the form of a levy on balances. Which generally accrues to 2% a month and automatically goes to the creator or community group creating that CAV.
How does a Savings Group (Chama) use CAVs?
- Chama members can register for an account and begin to save and loan CAVs just like they do with National Currencies.
- One chama member account is designated as the Chama account where members store their savings.
- The chamas unique CAV tokens will be distributed to the members of the chama and used for paying people inside or outside the chama for goods or services.
- The Chama can facilitate market days and weekly deposits as well as loan repayment in CAVs.
Why would someone hold CAVs long term?
- Because of the holding fee we do not recommend holding CAV long term.
- Users are expected to use the CAV mainly as a means of exchange in the local business community and to keep the KSH to build up savings or buy “imported” products.
Your CAV vs other CAVs (Trading between communities)
- If someone sends you another CAV from another community, you will have multiple CAVs in your wallet and can choose between them.
- Each CAV represents the goods and services of a particular community.
What is the technology behind CAVs?
- CAVs are digital and residing on a public blockchain.
- CAVs accounts can be accessed through USSD on feature phones - and soon an app and web interface.
- The Sarafu Network was built using Python and Typescript and Solidity
Is the technology open source?
- Yes all docs and code can be found here
How do you prevent a run on the reserves of a CAV?
- There is no automated reserve on-chain.
- CAV should be created against goods and services.
- The real world reserves of goods and services offered by CAV Issuers should always be more than the amount of CAV created.
- Sarafu Network will not mint/create more CAV (Vouchers) for an issuer than they can redeem in a year and generally 1 month.

Quiz¶

Test your Knowledge with the Quiz

Last update: 2024-07-09