Mercedes Bidart is cofounder of Quipu Market, a company which takes the idea of a community currency and marketplace and updates it for our age. Quipu market allows marginalised micro-businesses to buy and sell within their communities through a digital marketplace and using a digital community currency. The aim is to build and maintain wealth locally. In this episode, I speak with Mercedes about the intensive co-design process behind Quipu, the challenges of launching in a pandemic, and the importance of creating solidarity economies. You can find out more about Quipu on their website: quipumarket.com
You can find out more about Quipu through their website and find updates on their instagram.
And read here about the company's recent recognition in the Visa Everywhere Initiative awards, in which it won third place in Latin America and the Caribbean.
01:15 - The micro-businesses at the centre of local economies
03:11 - How COVID is both challenging and bolstering local economies
05:47 - The history of community currencies and how they can apply in Latin America today
09:08 - How Quipu uses a digital marketplace and community currency in order to build and maintain wealth locally
14:42 - Launching the Quipu platform in Baranquilla, Colombia, in the midst of a pandemic
16:10 - How micro businesses are using the Quipu platform in Baranquilla
19:07 - Co-designing the platform: What does a solidarity economy mean to you?
23:58 - Helping entrepreneurs access credit at fairer rates
28:31 - The importance of creating solidarity economies, and why its moving up the agenda now
32:06 - Next steps for Quipu
33:41 - Are we all in need of an emergency community currency?
Alice Merry (00:04):
Welcome to the podcast that takes a feminist look at the world of money. My name is Alice Merry, and this is the Feminist Finance Podcast. Today I spoke with Mercedes Bidart. Mercedes is the co-founder and CEO of Quipu Market, a platform that enables micro-businesses to transact. Quipu was recently awarded third place in the Visa Everywhere Initiative Awards for Latin America and the Caribbean, adding this to its impressive string of recognition and awards.
Alice Merry (00:34):
Mercedes is from Argentina where she ran community development projects in informal settlements with an NGO and worked for CIPPC cities program, building capacity across local governments in Latin America. Mercedes has a master's degree in city planning at MIT, and after MIT, she moved to New York to advise the deputy mayor for policy strategy of the city on new economy strategies to support minority and women-owned businesses, all the while, building up Quipu Market. Welcome, Mercedes, to the Feminist Finance Podcast, it's brilliant to have you here today with us.
Mercedes Bidart (01:11):
Thank you, Alice. Thank you, thank you for the invitation.
Alice Merry (01:15):
Great to have you. And before we get into you telling us all about your fantastic initiative, Quipu, it'd be great to hear a little bit about the kinds of micro-businesses that you're working with. So Quipu was launched recently in Barranquilla in Colombia, can you tell us a bit more about the area and the kind of businesses that you're working with there?
Mercedes Bidart (01:35):
Sure. So we are working in Barranquilla in Colombia, we are a team that is coming from different countries in Latin America, and we've seen these types of micro-businesses concentrated in some parts of our cities. So just for you to imagine, one in every four people in Latin America live in an informal settlement, also called favelas, barrios, each country calls it in a different way. And in these parts of our cities is where these informal micro-businesses are concentrated. So what we've seen is that, although they are... Parts of the city that are marginalized, if you want, and are not seen as their mainstream economy, they are actually what makes the city work and where tons of products and services are being offered and traded every day.
Mercedes Bidart (02:31):
And we work with that type of micro-business that is called informal, we call them popular because informal has that connotation of illegal thing, and it's not necessarily illegal. These are the type of business that happens from people's homes, and that actually, they make these neighborhood economies thrive and survive. So we work with that type of micro-business. And it could go from offering any type of product and any type of service, but usually are offered for their proximity, for people that live close to where they live.
Alice Merry (03:11):
So these are really the neighborhood businesses, the life and soul of these areas. And we know that COVID has been affecting the economy across the whole world, it's been affecting formal and informal economies, have you seen... I guess you're starting to work with these micro-enterprises in a time that's a particularly strange time and a time of crisis for them. How are you seeing COVID playing out among these kinds of businesses?
Mercedes Bidart (03:41):
Yes. We've been working in these communities, in these neighborhood economies, for some years now, before COVID, pre-COVID. And after COVID, what we see is that they are living an emergency on top of a pre-existing emergency. These places were areas where there was already an economic crisis that was constant, and now this is increased. The informal lending increased, the lack of access to capital obviously increased, and also the lack of visibility, these are businesses that are not digitalized. And at this point, if you are not in a digital world, then you don't have a chance.
Mercedes Bidart (04:28):
So what we see is that COVID actually increased poverty, increased informality, and obviously, these are actually businesses that they're hustlers and they try to survive however they can, and what we've seen is that people reinvented themselves. They started selling things that they were not selling before, such as hand sanitizer, for example, and that type of stuff. There is more offering in the neighborhoods of products and services because of the lockdowns, people had to stay at home and some of them lost their job, their boss, maybe they were working in factories or in, I don't know, cleaning houses or other types of jobs, construction, outside the neighborhood, and most of a lot of people lost their jobs.
Mercedes Bidart (05:10):
So they started to offer whatever they can inside the neighborhood using their skills inside. So we've seen that there is an increase of amount of micro-businesses in the neighborhood economy, there's an increase of digitalization, people are sending what they offer per day through WhatsApp mainly, and there's also an increase of purchases inside their neighborhood. So if you want, COVID is hitting hard, and at the same time, it's, if you want, making the neighborhood economy more strong.
Alice Merry (05:47):
That's really interesting. So it's also building this local economy that these small businesses are such an essential part of. It's interesting, we're talking about this local economy, and part of what Quipu brings to these economies is the idea of a community currency, or a platform building on the idea of a community currency. I wonder if you could tell us a little bit about the history of community currencies, what are they, what are they trying to achieve?
Mercedes Bidart (06:21):
Yes. So community currencies mainly started in the 1930s with the Great Depression, and they were a way, and they are still a way, of resiliency of communities, towns, cities during economic crisis. So the main concept is that when there's not enough money to buy, but actually there is demand and offer of products and services. So the community currency comes to replace that gap, to fill that gap and enable trade, even if there's not enough money, Fiat currency.
Mercedes Bidart (07:01):
And the main concept is also that they allow communities to generate and retain wealth among them. So it's a tool through which you can make sure that the money that you are trading with, that more money is sustained locally. So that's basically the goal of the community currency worldwide. What happened is that, and what we learned, is that in continents like Europe or the United States, there are tons of towns, and maybe small communities, that they have their own currency, and mainly they started their currency when there was an economic crisis. And that's why in the 1930s, there were a lot of community currencies around the world.
Mercedes Bidart (07:47):
What we see in the informal settlements, in these poor places of our cities, is that the economic crisis is constant. There's never enough cashflow, money, liquidity, to buy and sell, even though there is demand and offer of products and services. So that's where we come in with thinking of community currencies for the places where there is a lack of money, actually. And that is, as I was saying, that's constant, that is structural also, it's a structural problem. So that's why we propose the use of community currencies in informal communities as a way to bring money liquidity, and as a way to allow money also to stay in the community.
Mercedes Bidart (08:35):
What we've seen is that these are the types of communities where there is money getting in the community, but this money mostly flows outside of it, there are a few mechanisms to make it retain there and to make that economy itself grow from a subsistence to a more productive economy. So the community currency is one of the mechanisms that we are working on to see if it could be a way of retaining wealth in the communities.
Alice Merry (09:08):
So tell us a bit more about how Quipu works. How does the platform bring this concept of community currency? And I know that you do a lot more as well beyond that.
Mercedes Bidart (09:18):
Yes. So our goal is to, as I was saying, it's the same as a community currency, but we take it broader than that. We say we want... We see that these places in the cities were structurally marginalized from the mainstream economic system, but at the same time, they have a lot of commerce, they make our citizens in our cities survive and thrive. So our goal is to create and retain wealth locally, that's why we work every day.
Mercedes Bidart (09:54):
The first mechanism that we found to make this possible is to make the offer and demand in the local communities visible. So now, as I was saying, there's a lack of digitalization and a lack of concentrating all these offering in one place. And that's what do we do as Quipu, we create a marketplace that mirrors how their informal economy and their neighborhood economy works. So it's a market place where people can, is free for users, it's very easy to digitize your business, you can have more than one business because these are dynamic offers.
Mercedes Bidart (10:33):
So maybe I have one business today, tomorrow I have another one, or maybe I run two at the same time. So you can have more than one business, you can hide your address as you are also an informal micro-business, sometimes you don't want to show where you're running your business so you can hide your address, you can bargain prices on a chat and change prices just for one costumer, and other types of features that actually mirror how this economy works. So that's the first part of it, it's a very robust marketplace.
Mercedes Bidart (11:05):
The second part of it is that by uploading your business to the marketplace, you can buy and sell to one another using this token or community currency that is meant for exchange and not for accumulation, and that allows users to save their money to spend outside their community in things that they cannot find in their community. So that's the second part of it, it creates a trading system that you access when you upload a product or a service. So this currency is backed by your production capacity, it's not backed by Fiat currency. It is called mutual credit system. If you want, these are mutual credit that we give to one another interest free.
Mercedes Bidart (11:53):
So that's mainly what the product is about, the marketplace with this trading system. But in the end, the marketplace is recording all these transactions that were unrecorded before, but they were happening. And what we've seen is that nowadays, these micro-businesses access, or they don't access a capital like financial services, or if they access, they do it in a, the interest rates comes from the informal lending that is predatory, or the micro-loans, they also have a very high interest rate because there's no data, no information about how much they are selling, how much they're buying, their performance as a business and their risk.
Mercedes Bidart (12:45):
So that's the third part that we want to tackle, is the access to equitable financial services. And we do that by creating a credit-worthiness system, if you want, for each business. And based on that, is that we unlock the access to equitable financial services.
Alice Merry (13:04):
So if I have a small business and I'm selling shoes or I've pivoted now to selling face masks, how do I practically use this platform? I assume that you access it through a smartphone, an app, or how do I use it?
Mercedes Bidart (13:23):
Yes, this is a web-based app, because phones in these places, they usually don't have enough memory to download apps. So it's a web-based app that it's connected also to WhatsApp and Facebook, so you can share your products and services also on WhatsApp and Facebook. So imagine you live in this community. In the first community where we are is a 10,000 inhabitants, probably, housing community in the outskirts of Barranquilla.
Mercedes Bidart (13:54):
Imagine you live there and you sell cakes. So you create your profile, your business profile, you upload your business, your products and services, and you receive a certain amount of tokens that you can start using to buy to another neighbor. So you use those tokens to buy shoes to Julio, and Julio uses that to buy arepas to Rafael that also lives in the neighborhood. And that's how the token starts to be in circulation, and the way you access it is through your smartphone. In Latin America, the access to smartphones is three times Africa, so people are usually using WhatsApp and Facebook and they mostly don't have home phones.
Alice Merry (14:42):
Brilliant. You've just started introducing this program into a community in Barranquilla in Colombia, congratulations for starting that up. And I guess it's been a really strange time for you because this has been introduced in a community where you've been present for quite some time, so you have strong relationships, but nonetheless, in a really strange time where, I suppose, you probably can't visit in person. Tell us a bit about how that whole experience of starting up the Quipu program in a new community during lockdown, during COVID.
Mercedes Bidart (15:20):
Yes, you're exactly right, it was very challenging. We launched July 21st, and we couldn't be there because at that point also Barranquilla was hit very hardly by COVID, so the lockdown was very strict. And the way in which we advertised the existence of Quipu was through videos, was through flyers that we sent on WhatsApp groups, Facebook groups, we also sent SMS, and what happened is that actually people uploaded their business and their products and services. And we started to see that that was happening, in my view that it was more word of mouth or neighbors helping neighbors to use the platform.
Mercedes Bidart (16:10):
And at the beginning, our platform is still in beta version, so it's not the best UX that you can imagine, it could be better, should be better. And we're working on that. But at, at that point, it was like, wow, like all these people are uploading their stuff and actually it's not as easy to use as Instagram. And so that was fascinating, for me to see more and more businesses popping up on the platform, that was great. And now that we could go, actually two weeks ago, we went to a neighborhood and we could start talking physically with people, and they started to give us feedback. And that's what you need when you're developing technology, you need to talk with people, and you need to see how people are using what you built, because if not it's very difficult to improve it.
Mercedes Bidart (17:01):
And we've seen that they were saying that there are more businesses in the neighborhood than before, they were saying that they didn't expect it to see as much offer things inside their neighborhood, and that it was very useful to see what people were offering. And at this point... But we've seen also a behavior that we were not expecting. We actually proposed the use of the token as our way of exchange and not of accumulation and to allow people to actually save in pesos and not in Quipus, and there were some users saying, "No, I will save in actually my Quipus to spend later when I really need the money." So we are actually, at this point, really collecting the feedback and improving the platform and the system itself.
Alice Merry (17:54):
That's really interesting, implies a high level of trust actually, for something very new that people are willing to save Quipus, given that that's something that they've only just come across, but they feel, it seems like they feel sufficient trust in it as an alternative currency or as a platform that they think that it's worth holding onto those.
Mercedes Bidart (18:14):
Yeah. Well, it's what we're trying to figure out, it's like, what is it, how is that, that people are actually relating to it? All design of Quipu was a long way of community co-design of the platform, so they know already the team, they know already the platform, because a lot of them designing with us. So I think that's also why they trust it. The behavior is what we are learning right now and I'm trying to improve, but, if you want, as a marketplace, it's being used, even if we couldn't be there physically talking with the users.
Alice Merry (19:07):
It's really interesting to hear about this co-design process that you had with the people who would end up using the platform in the end. And just hearing that, it made me curious to ask how people reacted to the idea when you first brought it to these businesses, how did they respond to the idea of a community currency? How did they respond to the idea of maybe digitalizing their businesses, their sales for the first time?
Mercedes Bidart (19:34):
Yes. Well, actually I went to a community with a question. The question was what it means, a solidarity economy, to you. And we started working on that, what it means to have a more collaborative economy that is different from the mainstream, if you want. And one of the answers of one of the users, the neighbors actually, now they're users, but they are neighbors, and she was saying, and they're mostly women, 70% of the people that are on Quipu are women. And one of the neighbors, she was saying, "Well, the solidarity economy for me is an economy where we work as a chain. If you are benefited by it, then I'm benefited too. We are helping one another." So that was the first question on the first workshop that we've been really.
Mercedes Bidart (20:32):
And then we implemented our consumption and production mapping, this is a method that was used also in other communities where they have their own currency and they have their own more solidarity economy. So I brought this model from Kenya and Brazil, and we adapted to the reality of that neighborhood. We carried out the research with the micro-business owners, and we call this process a participatory action research, because when you train the beneficiaries of the research as researchers. So it's not trying to extract information to use it in a paper, if you want, but actually to go for information and data that could help us to build something that will benefit the same community.
Mercedes Bidart (21:24):
So we carried out the survey and then we analyzed the results together with around 30 micro-business owners. And we started to think on real solutions, like, okay, what can we do? If we could use technology and the smartphones that we're using everyday, how these could be a solution to the problems that we mapped about the economy of the neighborhood. And that's how people started to say, "Well, I would love to have an Uber, but for our neighborhood, where I can ask whatever I want, then it can come to my house." Or, "I would like to have a place where I can see what people are offering."
Mercedes Bidart (22:06):
Another one said, "I will have to have a bono voucher system among micro-businesses." So that's how, even though I studied local currencies before all this process, this is how the whole process started. So it actually came out from these workshops, it was not something that we got there and we said, "This is the solution we are bringing," but actually it came out from the workshops. And then it was crazy because this was in 2018, and then we started creating a prototype, and then we create an MBP, and then we ended up releasing the beta version. It takes a lot of time to assign technology, to build technology, and mostly if you want it to be as co-design as possible, it takes time.
Mercedes Bidart (23:00):
And I ended up writing my thesis about this whole process and I call it, technology like Quipu, I call it situated technology because it's a technology that actually is place-based, speaks about the dynamics of places and proposes a more collaborative way of transactions, if you want, and speaks to the territory, to the hierarchy, to the environment. And lastly, what we say is that we need technology that can help us visualize our systems, thinking of the neighborhoods and systems that, if we want to transform our systems, we need first to visualize. So that's one of the goals of Quipu, is helping communities themselves see how much assets they have and work starting from there.
Alice Merry (23:58):
So you've mentioned that part of what you're trying to do with Quipu is to help people get access to financial services that are at lower rates for them. You've mentioned informal loans have higher rates, and MFIs also offering credit at quite high rates. What's your vision for that? Do you see that happening within Quipu, or do you see this as something where people are going to be able to use their records within Quipu to access more traditional banking programs?
Mercedes Bidart (24:29):
Yeah, that's a great question. So I will start again by our goal of creating and retaining wealth locally. So if we want to create and retain wealth, then we need to bring more resources to these communities. And the way in which credit and lending missions and other financial services are happening in these places is that as they are so "informal," "invisible," there's no record of their activity to base the risk they have as a borrower. So the problem, as I was saying, is that money gets in their pockets through loans, there is access to financial services, financial inclusion is solved, there's no problem with financial inclusion.
Mercedes Bidart (25:30):
The problem is that the way in which that financial inclusion is happening is completely unfair. So they are accessing loans, being predatory or being the microfinance institutions. But as I was saying, yes, interest rates are very high, the way in which they access is not fair, and it's not actually help them, is not actually speaking about their capacity as a business owner. So even though, yes, everything contributes to the same thing. If we help communities to collaborate and keep more money inside their communities, buy more locally to one another, that's a way of retaining wealth.
Mercedes Bidart (26:15):
But the other way of creating wealth is also allowing them to access at better rates. And what happens if by collaborating more and by recording more your transactions inside of the community, you access to better financial services? Then both things are contributing to the same goal, which is creating more wealth. So even though, yes, the financial services might be from the mainstream financial system, we as Quipu want to be the ones designing new financial services. So at this point, we have a partnership with an MFI that works in these neighborhoods for some time now, like 20 years, or more than 20 years, and they are willing to collaborate with us to create a new credit line based on Quipu data.
Mercedes Bidart (27:10):
So if we can show that we can cut the cost of originating loans and doing all the evaluation of the borrower, if we can do all that in a digitalized way, then we can decrease the default, we can decrease the risk and the interest rates. So that's the type of partnerships that we are building for now with that type of microfinance institutions that want to change their conditions based on data that they don't have at this point. In the future, we as Quipu want to be the ones designing those financial services. That could be micro-credit, could be micro-insurance and other types of financial services that are tailored for the informal economy.
Alice Merry (28:00):
This idea, everything that you've been working on around the solidarity economy, and I really like what you mentioned earlier about the fact that you came to the people you wanted to design for with this idea of solidarity economy and these ideas emerged from those discussions that you had with them. And I see how this idea is expanding outwards also to maybe, how could this impact on people's ability to access loans at fairer rates and so on.
Alice Merry (28:31):
I guess I'm just interested to ask you whether you see an even bigger role, not only for Quipu, but for these ideas around solidarity economy in our world. It feels very timely at the moment, I think. Worldwide, people are spending more locally, becoming more locally-focused during the lockdown, and at the same time, there's a lot of awareness how things have been going and the economic system isn't fair and people are looking for alternatives. I wonder if you see a bigger role for these ideas around solidarity economy.
Mercedes Bidart (29:11):
Yes. I think that there's no other way in which we can develop as a society if we don't start changing the way in which we relate as economic human beings. If we don't start basing the economy the real economy and not on the bubble that we've been living all this time, obviously at this point, then other pandemics will happen, other type of crisis will happen. The thinking on the solidarity economy is thinking on how we relate to one another as human beings, and also how we relate to our environment, to our world, how we take care of our land.
Mercedes Bidart (30:01):
And I think that maybe before COVID, this was a radical idea, this was maybe a crazy idea, "Oh no, we have to bring solidarity to our economy," and maybe we were some folks just saying that. At this point, it seems that more people got aware of this need. And it's not just that we need to have solidarity economy in the places that were, as I was saying, were marginalized, or the more vulnerable places, no, we all need to change the way in which we relate and we consume. It's just about that, it's how we treat one another, and why do we prioritize at the moment of making a decision of what do I, and to whom I will buy, and at what price, and where is this product coming from, and who put the labor into this product?
Mercedes Bidart (31:03):
So I think it's a change of mindset from citizens, when we go and buy; from companies when they are producing, but also when they are organizing their governance inside their company, who gets more, how much is their rate between the CEO and the lower paid person in the company? Is it 300? Is it 30? So that's the difference, I think, that also speaks about the solidarity economy, where it's about how fair it is, the wealth distributed. And I'm saying distributed and not redistributed, because we need to start thinking about how we distribute wealth from the beginning, doing it in a fair way, and not then trying to redistribute it because it was unfairly distributed at the beginning. So I think these solidarity economies are a change of mindset and change of being, inside companies and outside companies too.
Alice Merry (32:06):
Absolutely, you can see this at a political level, at a local level, corporate level, individual level, and I think Quipu is so interesting because it's building it from the ground up among these small businesses. I just want to wrap up by asking you to tell us a little bit about where you're up to now with Quipu and what your next steps are going to be.
Mercedes Bidart (32:33):
So now, when COVID started, we also launched a campaign called Neighborhood Campaign in Colombia, where we call any institution that works on the ground, that works with communities, that if they feel that they could bring Quipu to their communities, that we can partner and we can implement Quipu together. So we launched this campaign, we got more than 20 interested institutions.
Mercedes Bidart (33:02):
At this point, we are in the community where we are, where we launched, but we are also starting to implement two new communities, and by next year we will be in 10. And our next steps are improving the platform, improving the UX, making it as friendly as possible, and starting to create this credit-worthiness score to start connecting with financial services. So those are our next steps as a team.
Alice Merry (33:41):
I've been interested in community currencies for a while. It's an idea with a long history, but one that initiatives like Quipu are adapting to new places and also making fit for a digital world. The key problem that they're aiming to solve is a lack of local liquidity despite plentiful local demand and plentiful local supply. It's a deep structural problem in many of the communities where Quipu is working, but it's also a problem that the current crisis has made quite acute around the world.
Alice Merry (34:12):
We're all being forced to be more local, we're all being forced to buy and do more business and our own communities. And at the same time, as the economy is drying up, many communities are finding themselves short of cash. As many people are going back into second waves of lockdown at the moment, perhaps we should all be considering emergency local currencies. Please do let me know what you think about local currencies. You can get in touch at feministfinancepodcast@gmail.com, and please share this with a friend who you think might be interested.
Alice Merry (34:46):
Thanks. See you next time.