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  • Posted April 3rd, 2020

    Keeping small businesses alive during the coronavirus / economic crisis

    Keeping small businesses alive during the coronavirus / economic crisis

    The coronavirus crisis is causing an economic crash that will only get worse. Research has indicated that a shortage of money will mean that up to a million UK small businesses may close in the coming months. To prevent the devastation of small businesses, and therefore our communities, there needs to be an alternative means of exchanging goods and services.

    That alternative exists – it’s called mutual credit, and it really works. Here’s an explanation, and an invitation for small businesses to join. We’ve kept it as simple as possible, with links at the bottom to find out more.

    1. It works

    In 2009, after the last crash, a group on the island of Sardinia in the Mediterranean launched a mutual credit network called Sardex. Last year almost 50 million euros’ worth of trade was conducted in mutual credit in Sardinia. There are successful schemes in other parts of the world too.

    Keeping small businesses alive during the coronavirus economic crisis : Sardex in Sardinia

    2. It’s in the UK

    Now mutual credit is available in the UK – via a not-for-profit called the Open Credit Network.

    3. Join

    First, join the directory here. You’ll be asked to add the products / services you’re offering and the products / services you need. Each time you login, you’ll be shown other businesses who are offering what you need, and need what you’re offering, so that you can find customers and suppliers, and they can find you.

    4. Trade

    Find potential customers and suppliers, and contact them to suggest a trade. You can agree to trade partly, or entirely, in mutual credit. If you sell, your account will be credited, and if you buy, your account will be debited. These are just numbers in your account, that can be used to buy from any other business in the network. There are limits to how far you can go into credit or debit, and that’s it. No money is required, and it’s very easy – you’ll soon get the hang of it.

    5. Local to global

    As they grow, local networks will be built, that can trade with each other within the national network. There are also people working on a way to link mutual credit networks all around the world, in a global ‘Credit Commons‘. But you can join the UK network right now and start trading with other businesses anywhere in the country.

    6. Spread the word / volunteer

    This is going to be essential for small businesses, communities and the world. Help spread the word – send this to everyone you know. If you’re a small business, invite your customers and suppliers to join the network. We have to move fast – let us know if you’re available to volunteer.

    Keeping small businesses alive during the coronavirus economic crisis: Open Credit Network

    7. More

    Find out more about the Open Credit Network and mutual credit via their FAQ page and blog, and on Wikipedia.

    The views expressed in our blog are those of the author and not necessarily lowimpact.org's


    • 1DR HILARY JONES April 3rd, 2020


      Can you explain “shortage of money”? In one sense, I’m always short of money; but I thinkyou mean something more technical that we need to understand

    • 2Dave Darby April 3rd, 2020

      Hilary – no, not technical – just that lockdown means small businesses are losing custom, up to 1 million small businesses expected to close in the coming months, so their suppliers lose custom too – and so on. Just literally not much money around. It was the same situation in 2009, after the last crash – it was why Sardex was launched, and probably why it was successful. Also, the Wir Bank (mutual credit system – still going, in Switzeralnd) started in the 30s depression. And when the Argentinian economy collapsed at the end of the nineties – ‘Creditos’ systems blossomed all over the country (basically mutual credit).

      So no, nothing technical – just no-one having much money

    • 3Kirsty April 3rd, 2020

      Is there anything equivalent to this in Europe?

    • 4Dave Darby April 3rd, 2020

      Kirsty – where are you?

    • 5Kirsty April 3rd, 2020


    • 6Dave Darby April 3rd, 2020

      Kirsty – I don’t know of anything in Belgium – but I’ve put the word out. I’ll let you know if I get anything back. The OCN have free / open source software that anyone can use to set up a mutual credit network anywhere.

    • 7Liz Beard April 5th, 2020

      Do the transactions go through your books as normal and be taxable?

    • 9Eifion Williams May 26th, 2020

      In Wales, supported by the Welsh Government, the CELYN Mutual Credit system is being developed across all sectors. Like the Sardinian Sardex, and the Swiss WIR, the CELYN operates within its own country only to create solidarity amongst its membership and at the same time, recognising in solidarity, that other areas of the UK might want to develop their own Mutual Credit systems to serve their own regional needs. https://www.business-live.co.uk/enterprise/how-wales-digital-currency-work-17876587

    • 10Dave Darby May 28th, 2020

      Yes, Welsh businesses please consider joining the CELYN. The more schemes the merrier. The challenge will soon be to federate schemes together in a global network, so that businesses will be able to trade with each other wherever they are geographically. There are people working on the software to be able to do that right now. We hope you’ll join us Eifion. Best of luck with it.

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