Community Currency and Economic Dynamics of Traders in Informal Urban Settlements

Abstract

Majority of world population live in poverty and struggle to fulfil the most basic needs like health, education, access to water and sanitation. Past studies indicate resources deprivation among residents in informal settlements. In Africa, 43% of individuals are living in destitution in urban territories a proportion which compares with 59% of people living in poverty in rural areas. Due to high rate of poverty the traders in urban informal settlements are unable to access financial services to unlock their business potential. This study focused on the influence of community currency on economic dynamics of community groups and networks among traders in the informal settlement in Kenya. This study was guided by Social Capital theory and SCALERS Model. The study results indicated a high correlation between community currency indicators and growth of small scale business among traders in urban informal settlements (R = .871^a). The variation in growth of business of traders in informal settlement is explained upto 75.8% by community currency (R² = .758).  further, the interaction between Community currency and entrepreneurial network  on growth of businesses of  traders in informal urban settlements reveal that the moderating effect of entrepreneurial network caused 77.0% of the variance in growth of small-scale business of traders in informal urban settlements (R² = .770).  This shows that entrepreneurial network has a positive and significant moderating effect on growth of business of traders in the informal settlement.

Keywords: Community Currency, Informal Settlements, Traders, Growth

DOI: 10.7176/RJFA/13-22-07

Publication date: November 30^th 2022