Sistema INtercambio y TRAnsacciones Locales--
System of Exchange and Local Transactions: SINTRAL

From "La Otra Bolsa de Valores"

The Rumihuaico SINTRAL System

Thanks to Jurgen Schuldt for presenting here the principles of a community enterprise design for promoting the talent and local initiative of a community. This system is located in a town near to Quito, Rumihuaico, in the Tumbaco Valley. This system is called SINTRAL--"Sistema de Intercambio y Transacciones Locales" or System of Exchange and Local Transactions, and is a non profit system organized for the people and funded by the Pestalozzi Education Foundation. The information booklet that the group published (SINTRAL, 1995) explains in great detail a system which can be applied to a concrete locality, a new preferential method which is most simple to understand and apply.

SINTRAL is a system of exchange and transactions which allows the people of a locality to offer and receive all manner of goods and services from one to another, without the necessity of using proper money. Although it is a simple way of handling exchanges, it can also handle sophisticated transactions and a variety of alternative economic programs very efficiently.

SINTRAL-Rumihuaico uses a an alternative measure of value called "Recursos" -- "Resources" that is different from money in that it cannot be hoarded, lost, stolen nor forged. It can only be used in the local area in which it is issued, and unlike banks, "recursos" remain within the community. The standard exchange between a "recursos" and "sucre" is 1 to 1.

The function of the SINTRAL system can be summarized in the following components and procedures.

a. A group of people in an area, community or locality come together and agree to start a system for exchanging goods and services using a system of accounts (the name of the currency varies in different countries, in Rumihuaico it is called "Recursos".
b. They produce a directory of goods, skills and resources that are offered and requested by the members and circulate it among the members, and citizens of the locality.

c. The members exchange directly between each other, using a cheque to credit the recipient's account for the good or service received. More than a barter system, SINTRAL allows its members to receive credit to spend with others.

d. The cheques are brought to a central office which registers all of the transactions and every month updates the accounts of the members, and makes changes to the directory.

e. No interest is charged on accounts.

f. The major intermediaries, and especially speculators are completely eliminated in this system of direct transactions, resulting in extensive savings to the members.

g. The SINTRAL system is a non-profit organization. To cover the costs of providing the services through the central office, a small percentage in "recursos" is charged on each transaction.

SINTRAL is a community network designed to support the talent and individual initiative in the community, while increasing exchange and helping the community. In this sense, members gain access to a variety of local resources and all types of skills in a way that is familiar to them, while adequately meeting the needs of the members.

The SINTRAL system offers the community many benefits, such as:

a. helping businesses and people who offer services;

b. promoting the local economy;

c. stimulating initiative and creativity;

d. helping local producers to satisfy local needs;

e. saving resources and the environment; and

f. fostering community spirit

In this respect, supporters affirm that "the real wealth is to be found in our community ... in the talents and resources of the members -the goods and services that they have to offer- and not in money". Money is only a medium for the commercial exchange of goods and services. When a community is in recession or depression, there is no need for the community to be forced to live in poverty and not have resources ... it is only because the wealth is being monopolized and because the medium of circulation, money, has diminished or is draining out of the community.

In place of coins and bills, we have adopted a medium of our own creation "recursos", that does not have the problems associated with money. In this way, we are able to liberate and potentiate the wealth found in our community for the benefit of all.

The SINTRAL network in Ecuador currently consists of two systems, the SINTRAL-Rumihuaico (SR), and the SINTRAL-Toctiuco (ST) system, both organized and funded by the Pestalozzi Education Foundation (FEP).

Characteristics of the Association

1. The System of Exchange and Local Transactions (SINTRAL) is a non-profit society. The system is managed by a central group in concordance with the member's interests.

2. The basic idea of the SINTRAL system in Rumihuaico is to assist and promote community development by sharing the skills and knowledge for the benefit of all.

3. The members trades and accounts, and the details of the trade with the other members are registered in a computer.

4. SINTRAL publishes a directory of offers and needs, as well as listing the members who can offer goods or services on a regular basis.

5. The members can trade with anyone, only in "recursos" or combination in diverse proportions of "recursos" and money. The system will only record the "recurso" portion of the transaction.

6. Only the member making the purchase may move "recursos" from their account to the account of another member. There are no fines on negative balances, members can spend as they need (subject to limits set by the organization).

7. Only the administrator can order the transfer of "recursos" from one account to another.

8. If a member has achieved a positive balance (higher than zero) in their accounts, they will be encouraged to spend down their balances.

9. Before leaving the community, the member must return the balance of their account to zero.

10. There is no interest charged on balances. To cover the costs of operating the system, the members will be charged fees for their use of the system in "recursos" and/or money (for example, a membership fee, a monthly fee, a renewal fee, a transaction fee). The members will be informed in advance of any fees.

11. SINTRAL is an open community system. Any member may request the account balance of another member. The central group may publish the account balances for the benefit of the membership.

12. Nobody is obliged to trade with another member.

13. SINTRAL is not responsible for the value, the condition or the quality of goods and services offered in the directory.

14. The value of a good or service is determined at the time of negotiating between members and is not the responsibility of the central group.

15. The members are individually responsible for the obligations that have occurred through making a transaction. SINTRAL cannot hold anyone responsible by informing the authorities, and cannot collect taxes on behalf of its members.

16. The community or the central group may act in their cautious interests and discuss activities that may be in contrary to the objectives of the community. The central group, or general meeting of the society, after due consideration, may temporarily or permanently suspend a member of the system.

17. The central group may refuse to allow a trade, or listing in the directory that is considered inappropriate for legal or other reasons.

18. The central group can remove a member in exceptional circumstances; for example if the individual does not bring together the economic requirements with established morals.

19. The members have the right to assist anyone to meet with the central group, to appeal any decisions by speaking directly with the group or general meeting of the members.

20. The members agree to support the conditions of this agreement.

In other words, this system is practically identical to a LETS system, a system designed for the modern world. This design for local communities and neighbourhoods can also bring together smaller groups of acquaintances or close friends.