The Fava, Favabank's Mutual Credit Currency

Money created by You

Money as promises between one another.
Money which is real, earned into existence by creating value.
Where the size and growth of the economy reflects community good-will.

The Fava, Favabank's Mutual Credit Currency

Money as it should be, a credit / debt relationship derived from tangible value.
An transparent system where the size of the economy represents an aggregation of community good-will.
A sustainable form of money, not susceptible to the whims of politicians and bankers...

Ambitions for the Fava Currency

Our audacious ambition is for the Fava to eventually achieve mainstream acceptance as the currency of choice for small neighbourly transactions between people.

We want it to be natural and convenient to say 'Thanks for helping, let me give you a few Favas', before initiating a payment via their mobile phone.

With your help...

It certainly won't be easy, it needs you to take a leap of faith, to sign up, and get involved...

The Fava, Favabank's Mutual Credit Currency

How is the Currency Created?

The Fava currency is created as a credit / debt relationship amongst participants so a transaction will be recorded as a debit in the the account of the person paying for goods or services, and as a credit in the account of the person providing the goods / services.

We all start at zero Favas. The only way of acquiring a Fava is by doing something for somebody else. It's a zero balance system so everyone's credits and debits all add up to zero.

Favabank will be an issuer of Favas as this would distort the money supply. The size the Fava economy will represent the total amount of good-will shared within the system.

The Fava, Favabank's Mutual Credit Currency

How it Works

Favabank is based on the idea of barter, trading without cash. It's for small community transactions, or favours, where cash just doesn't seem appropriate. Simple bartering involves trading things of equal value and requires a 'coincidence of wants', e.g. two people offering things of mutual interest and agreeing a swap. But if one person doesn't want what the other offers, a trade won't occur.

The Fava allows complex bartering:

Favas facilitate barter without a 'coincidence of wants'. You earn credits by doing a favour, spending them later with someone else when an appropriate opportunity arises. Transactions are centrally recorded and are transparent for all members to view. The Fava is peer-to-peer money, created as promises between one another by people providing tangible value.


It works like a chain of IOUs, after you've provided a favour someone, there's a built in obligation for them to 'pay it forward'.

See more at How it Works

What is the Fava Currency Worth?

The Fava currency will achieve it's value through the consensus and support of members. This will depend on our ability to recruit members and encourage transactions. Once people see it can help them to do things or acquire things they need, it will establish its own worth.

When posting an ad you can suggest a price in Favas. The price is entirely up to you but as a guideline we suggest the following:

  • 1 Fava = £1
  • One hour of time = 10 to 20 Favas, depending on the effort & skills involved.

The parties involved in a transaction are free to agree their own prices and as people begin to trade they will set some benchmark values for certain transactions. We will then be able to offer information about average transaction values as a guideline.

The Fava, Favabank's Mutual Credit Currency

Where Does Money Come From?

Despite being integral to so much of our daily lives, most people don't really know where money comes from or how it is created. Many people might think that money is brought into existence by the government, but printed money and coins actually constitutes less than 3% of money in circulation.

Created 'Out of Thin Air' by Banks

It comes to a surprise to many when they discover that money is not issued by the government, or by the Bank of England, but by ordinary high street banks. Private banks loan money into existence, for profit private profit via interest.

Fractional Reserve Banking

Most of us think that banks work by looking after money deposited by savers, which is then loaned for people to buy houses or build businesses. However there is a mechanism used by banks, called Fractional Reserve Banking, which allows them to lend far far more than they are legally required to hold as reserves. When we saw the queues of people withdrawing their money from RBS in 2008, the bank simply did not have enough money to cover demand - the system is designed that way,

Ben Dyson of Positive Money explaining how banks create money.

Jem Bendall at TEDx on 'The Money Myth'...

Money as Debt, Created by Banks out of Nothing...

The videos on the right give some depth and further examples of this seemingly absurd claim that money is created out of nothing...

The Fava, Favabank's Mutual Credit CurrencyFavas are earned into existence...

In contrast, the Fava is earned into existence representing a credit / debt relationship between voluntary participants, created when one person agrees to do a favour for another.

Mutual Credit Systems

If you have encountered mutual credit systems before, it is most likely to have been through TimeBanking or LETS (Local Exchange Trading System).

LETS and TimeBanking have proved that mutual credit systems can create opportunities to create value between one another via an alternative means of transaction.

According to LETS Link UK, UK LETS membership in 1996 was around 40,000 people in 450 LETS schemes, which by 2006 had shrunk to an estimated 30,000 members in 300 schemes.

The foundations for Favabank

Favabank builds on the foundations laid by other systems by automating the accounting and brokering side of managing transactions and complementing the transaction engine with a social media experience including groups and local pages.

A self sustaining commercial organisation

Favabank will be run as a self sustaining commercial organisation, rather than on a purely volunteer basis as is often the case with mutual credit systems. We feel this will provide the means to develop the platform to offer the best user experience and create mainstream appeal.

Our business legal structure however will be a cooperative, spreading the ethos of sharing and collaboration throughout the venture, ensuring participation, strong governance, and ethical practices. See details at Favabank as a Cooperative

Incorporating existing LETS groups

We have received enquiries from struggling LETS groups which are sometimes overburdened by the administrative workload. If there is enough interest, we could migrate existing LETS accounts to private groups within Favabank so members may continue to trade on their current balances within a group.

If you are running a struggling LETS:

We will need to ascertain interest levels from existing LETS to determine whether migrations might be feasible so feel free to contact us if this would be of interest.


Mutual credit systems, sustainable economics & sharing resources:

Jeremy Bendall: The pressing need for alternative finance systems.

Doug Rushkoff: Comparing money which is earned into existence with money being lent into existence.

Charles Eisenstein: An alternative to Gordon Gekkoism, happiness from affirming our connected nature via the gift, in line with our cooperative nature of being.

Rachel Botsman: The Case for Collaborative Consumption

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Latest from Favabank

October 2012:

In October, we launched our 'Local Pages' feature to create a space for people to talk about what's happening in their community. When you log in as a user, your default page will now be your local page. Every area in the UK has a local page and we will initially be having a promotional focus in the North Surrey and Berkshire area.

See EGHAM and STAINES-UPON-THAMES for examples of our local pages, or search below for your own postcode district.

Member Spotlights:

Favour exchange as the nexus of community...

Chris Thomas

Chris Thomas, Ealing

Music enthusiast Chris has a home recording studio and is using Favabank to offer musicians the chance to cut a demo.
View Chris' Profile >>

Siobhan Elliot

Siobhan Elliot, Egham

Siobhan, a Reflexologist in Egham, hopes to exchange dog walking or cat feeding favours, as well as offering foot care treatments.
View Siobhan's Profile >>

Paul Risk, Woking

Paul Risk, Woking

'I really like the idea of making it easier to ask a neighbour for a favour and would be happy to offer IT help in return'...
View Pauls's Profile >>