Hello, I'm Dave Williams and I specialise in interest free trading systems.
I have set up 2 Local Exchange Trading Systems and my idea for a business to business system based on Wir in Switzerland has attracted over a quarter of a million pounds worth of funding from European and UK sources.
I call this type of trading LIFT (Local Interest Free Trading).
If you have not come across barter trading before, in the modern sense that is, you may want to check out some of the barter trade sites on the internet. These offer opportunities for companies to trade surplus goods with one another for barter credits. The credits are handled by a central broker, or barter agent. In this way companies do not have to find a direct swap - say coffee machines for hotel rooms but they can put their goods in to the barter market place and buy whatever they need with barter credits.
So one company may have a credit limit of £5,000 in barter credits which they spend on booking hotel rooms while their own product - gas fires, say - would be bought by any other member of the barter club for barter credits. So even thought their account may have been up to £5,000 in deficit at one point the selling of their own products for barter credits brings their account back to balance.
The barter agent takes a commission in cash for brokering the deal and running the club. This varies between 5% to 15% depending on the rules of the club. Members also pay fees for being a member whether they trade or not. This can vary from tens to thousands of pounds.
LIFT is based on businesses wanting to support one another in a particular area. They agree to accept a percentage in credits across the board for all of their products, surplus or not!
This means that members of a LIFT form themselves into a mutual self help group. In doing this they are able to keep out the larger players who would generally be able to undermine them. So for instance a local small producer could not match the price of a multinational player but by agreeing to accept say 25% of the purchase price in barter credits their local customers would be able to save 25% cash by trading with them and so keep their cash flow in check.
In turn the barter credits earned could be spent with the local member companies who benefit from the extra local trade.
If you think that this all sounds a bit far fetched then look at Wir in Switzerland. The Wirtschaftsring (or trading circle) has been in operation since 1934. It does not allow large companies to join. It trades in a currency equivalent to the ChF (Swiss Franc). It allows borrowing in Wir Franks (WirF) and the result is that it now has 60,000 members using 80,000 accounts. In 1995 it traded over ChF2.5 billion (approx. £1.2 billion) among its members.
Wir charges just ChF44 per year membership, there is no joining fee but members can choose to join the Co-op (Yes, Wir is a co-operative) and share in the dividends at the end of each year.
The commission on trade is not 5-15% but 0.6%. So a member purchasing WirF1000 worth of goods will pay ChF6 in cash.
Wir now employs more than 160 people to run its operations and they are operating all over Switzerland though the majority of trade takes place in the German speaking cantons.
If you would like to find out more about this and other alternative currency schemes you could try David Williams Interest Free Trading page