Psychological Factors Influencing Community Currency Usage in Nairobi Informal Settlements.

Abstract

The idea of community currency (CC) has been examined on a global scale. It has been put into practice in numerous nations across both developed and developing regions, primarily aiming to support those who are poor. It is designed to supplement or complement the national currency of a country and is typically used for transactions within a limited geographic area. The concept of community currency is rooted in the idea of promoting local economic activity, fostering community connections, and enhancing sustainability. It aims to strengthen local economies by encouraging residents to support local businesses and services, thereby reducing dependence on large-scale external markets. Community currencies often operate on the principles of mutual trust, reciprocity, and social capital. In Kenya, a CC was introduced by Grassroot Economics a Nongovernmental Organization to help connect the unmet needs with unused or underutilized resources. Several studies have been done in Kenya on CC in general but psychological factors influencing CC usage have not been adequately studied. This was important to look at since it helped explain what motivates people, their perception and attitude toward CC. This study's main question is how psychological factors like motivation, attitude, and perception affect the use of community centers in Nairobi's informal settlements. A voucher system is used where people with a common goal come together and form a group where they commit their goods and services. They create voucher systems that will be used in the group. CC usage was looked at as the number of times CC moves from one entity to another. It was also looked at as whether it was used locally, and the numbers of transactions made. Technology Acceptance Model (TAM) was used to explain the acceptance and usage of CC In this study, a quantitative approach was utilized, incorporating descriptive analysis, Principal Component Analysis, and multiple regression to examine both demographic characteristics and latent variables. The study site was Nairobi informal settlements where the project is implemented. The list of beneficiaries was obtained from the organization and the study determined the sample size using the Yamane sampling formula and collected primary data.