We are glad to introduce
to you, a system called “LETS” which makes trading possible “without using cash”. We knew
this will sound strange in your hears but please calm down, you will understand what “LETS”
means after reading this booklet. The system has worked in several countries across the
world including few African countries and we are confident it will work in
WHAT IS LETS?
LETS is an acronym for “Local Exchange Trading System”. The fact that “human wants are many but the resources (in most cases, money) which can be used to satisfy our wants are often few…” prompted the emergence of LETS.
The LETS scheme in the short run, is a system designed to assist people of a specified local community in their efforts directed at satisfying their numerous wants while in the long run, the system helps to bring positive developments to the socio-economic status of a local community.
How LETS achieves the above objectives is simple. It simply uses a system of trading without using cash. By this, members of a community are encouraged to come together often in a designated place in order to VOLUNTARILY exchange goods, services or skills among each with access not limited by cash restrictions. In addition to this, everything can be exchanged with the LETS scheme. Goods, services and skills needed by humans but which they are unable to obtain because of cash restrictions is exchangeable under the scheme. These may include babysitter, gardening, vegetables, eye treatment, computer lesson, food items, clothing, bed & breakfast, car repair, clock repair, hairdressing / haircutting, taxi services, cooking service, farming, marketing assistance, shoes and other things For instance, if you are good at painting, you may voluntarily offer this to a member of your community without receiving cash in return. And while doing that, another member of your community might voluntarily offer you a computer lesson needed by you but which you have no cash to satisfy without you paying him / her any cash.
By allowing the above processes in a community, it is obvious that the LETS scheme can help people to satisfy their wants. Apart from that, it helps in the long run to alleviate poverty and promotes social and economic development in that community since it is making resources available to people and since it brings people closer in love.
At this juncture, it is worthy of note that the LETS scheme believes that whether you are poor or rich in terms of any country’s federal currency (in our case, the Naira), everybody want something and can offer something to others.. Some would think this is not possible but if you look deep down your heart, you will find out that you have a lot of things that you can offer others without being paid in cash. Consider a student who is good at decorating. Under the LETS scheme, he or she can offer this free-of-charge to a member of his or her community who needs the services of a painter but who has got no money to pay the painters. While doing that, the student can receive a want, for instance, Mathematics lesson for two weeks from another community member.
At this point, please note that exchange under the LETS scheme is usually VOLUNTARY in nature. No one is forced to do it. The system solely relies on mutual trust among members of a community and uses that to collectively address the problems of wants among members of that community.
Finally on this introductory chapter, it is good to say that the system works the same way with the old trade by barter system except that in LETS, direct exchange is not necessary – meaning, you don’t necessarily have to receive an offer from someone whom you gave an offer. Using one of the above examples, Charles may offer to give you Mathematics lesson for two weeks while you may offer to give eye treatment service to Anne.
BENEFITS OF LETS
ü LETS is run by and for local people
ü LETS encourages trading without using cash
ü LETS contributes to the fight against poverty
ü LETS is a non-profit making / non-governmental community enterprise
ü LETS creates wealth that stays within an area
ü LETS puts people in touch with a great variety of resources that cash cannot reach
ü LETS helps people to develop new skills
ü LETS helps to create new market for goods and services
ü LETS creates an atmosphere of love and co-operation within a community
ü LETS creates an avenue for making new cycle of friends
ü LETS offers people an incentive to shop locally
ü LETS helps to uplift the socio-economic status of a community.
HOW DOES LETS WORK?
LETS is usually controlled by monthly meetings and a LETS market. In the LETS market, registered members of a LETS group in a community converge together for the purpose of trading without using cash. Non-registered members can also participate but registered members stand to have more benefits in any LETS market that non-registered members. You can refer to us, using our contact information at the back of this booklet should you need more information on this.
More also, all participants in the market will receive copies of a monthly YELLOW PAGES prepared by the LETS group. The Yellow Pages is an information service used by LETS groups to facilitate trading without using cash. Most often, the Yellow Pages is divided into:
a) Members’ Directory, which is a list of all current members of a LETS group as well as their respective contact information.
b) Offers and Wants List, which is a list of offers and wants as offered and needed by registered members of the LETS group.
Upon receiving copies of the Yellow Pages, all the participants will have a look and decide on whom to trade with in the market. This means that, when you look at the Yellow Pages and found someone who has offered what you need, you will simply approach the person and discuss with him on what he has offered. Remember that the system is voluntary, it is not binding on any person to reserve an offer for you. In fact, when you approach a person for an offer, he may decline not to give it to you if he has his genuine reasons for taking such a decision.
At this juncture, please be informed that units of exchange called LETS currencies are often used by various LETS groups to facilitate trading without using cash. These currencies are in diverse forms and each LETS group is left with the responsibility of determining the name, the form, the denominations and the rate of its own currency. Some uses chequebooks while some uses printed currencies, which are often in form of specially designed stickers. For instance in England, a LETS group whose LETS currency is call “New Berries” made reference to the British Pound Sterling in determining its rate i.e. One New Berry equals one Pound Sterling. Other LETS currencies found across the globe are: Green Dollar, Trueque, Sol, Kola etc…
The reasons for using these currencies are obvious and include:
a) It helps a LETS group to know the value of offers and wants traded under it at a given period of time.
b) It helps to ease recording of transactions as may be carried out under the auspices of a LETS group.
c) It is used to make the system interesting and non-tiring
d) It is also used to earn some respect for the system and to exercise some needed controls over it.
Using the scope of LETS currencies, all offers presented in a LETS market bear prices. It is worthy of note here that setting of prices for offers is left with each member giving out an offer (seller) to decide. LETS Administrators do not interfere with this. The prices are also subject to negotiations by the buyers in the LETS market (persons who need what is offered) as we normally have it in real life trading. Allowing this in LETS doesn’t mean any other thing than fun and other reasons indicated earlier.
So when a buyer has found a seller who has offered what he needed, he will simply approach him or her and negotiates the price of the offer. This means that a seller may offer to give computer lesson to anybody for 1,000 New Berries while a buyer may negotiate it for 800 New Berries. In this case, both of them is left to decide. If both agrees on a price, the seller will then release the offer to the buyer upon payment of the agreed sum in LETS currency. No cash must be involved! Immediately after an offer is discharged, both parties to a transaction must inform the LETS Administrators of the transaction carried out by them so that the transaction would be reflected in the records.
In some exceptional cases, experience have shown that some offers would need price setting that would be on a part LETS / part CASH basis. This situation is handled properly under the scheme to ensure that cash is not involved. For instance, a seller who offered painting service may not mean to include the cash cost of buying paints. In this case, the seller may require that the buyer buys him or her paints, using cash while he or she will paint the house of the by being paid in LETS currency. That is to say he or she (the seller) may set a price like this for such an offer: 1,000 New Berries (for painting service) / 1,400 Naira (cash cost for the paints). Please note that for a transaction of this nature under the LETS scheme, parties in this type of transaction will only be required to report only the 1,000 New Berries created in this type of transaction to the LETS Administrators for record purposes. This is because, LETS does not deal in cash.
WHO CAN JOIN A LETS GROUP?
Everyone is invited! The poor, the rich, traders, professionals, artisans, students, civil servants who are 18 years old or higher can all join any LETS group.
HOW CAN I JOIN?
To join a LETS group is easy. You will simply be asked to obtain and complete an application form in order for you to become a registered member. The form is likely to include a section that will ask for a specimen signature, a section to list your offers and wants and a section to accept or reject the members agreement.
Immediately you are confirmed a member, an ID card may be issued to you with an account number and sometimes a specific amount of LETS currency used by the particular LETS group which gave you the application form. All these facilitate trading in the LETS market. The account serves the purpose of recording your transactions with others while the initial amount of the LETS currency that will be issued to each new member will enable them to start trading with others immediately. No account-opening fee is required to get an account number and no initial deposit either in cash or in LETS currency will be required. No interest is charged, it is all free!
WHERE CAN I JOIN A LETS GROUP IN
Contact Person: ‘Niyi Emmanuel Oladipupo (Mr)
62, Ajose Street, Ilasamaja, Lagos,
Tel.: +234 01-48063.71