A closer look
When traditional banks categorically refused to lend money to the residents of the Conjunto Palmeiras favela in Brazil, the locals decided to just hallucinate their own financial institution. In 1998, they launched Banco Palmas and created their own social currency called the Palma. By issuing micro-loans in a currency that could only be spent within the favela, they actively prevented capital from bleeding out into the richer parts of the city. The illegal banking ecosystem proved so resilient that the actual Brazilian government eventually had to legally recognize it.
