Written by Tatiana Felix
Palma, Maracanã, Castanha, Cocal, Guará, Girassol, Pirapire, Tupi. The list of various names includes more than 40 local currencies that circulate in Brazilian neighborhoods and small towns where there are community banks, created to strengthen the economy in needy communities.
The worth of the local currency is identical to the real, the official currency of Brazil, but it is more valuable than the real because businesses give discounts for purchases made with this alternative money, according to Joaquim de Melo, founder and coordinator of Banco Palmas.
The bank is headquartered in Conjunto Palmeiras, a neighborhood on the South side of Fortaleza, the capital of the northeastern state of Ceará.
The use of the currency is simple: the local residents can trade the real for the local currency in a community bank and use it in regional businesses. If it is necessary to buy something with a real outside of the community where the bank is active, then a person can do the exchange in reverse.
The objective of the local currency is to have the currency circulate in the community. The practice increases sales and generates more jobs in those areas.
Banco Palmas is a pioneer in this area. It was the first community bank created in Brazil, founded in 1998. Two years later it brought out the currency of the same name, the palmas. The communitarian experience yielded such positive results that in 2005 the Network of Community Banks in Brazil was created.
According to Melo, around 240 commercial establishments are credentialed to receive the palmas. The attraction is the discount given by the business if the customer pays with in palmas. If they buy in reais, there is no discount.
“For the businessperson this means that the customer is loyal,” explains Melo. The practice aims to stimulate the use of the social currency.
“The real can be used outside of the community, generating wealth in other areas. The local currency has the power to generate wealth in the neighborhood,” he emphasized.
He estimates that there are around thirty-six thousand palmas circulating monthly in the region and there is already a palmacard, a credit card from the community bank.
Banco Palmas is now an example for the rest of the country. In the same building is the Instituto Banco Palmas, which offers courses on finances through resources acquired from the Bank of Brazil.
Melo explained that the incentive is also given by the Ministry of Work and Employment, through the National Secretariat of Economic Solidarity, “The Ministry is one of our partners and has supported the creation of community banks in the country.”