Mutual Credit

The Open Co-op has partnered with LowImpact to develop a UK Mutual Credit Network.

Please visit the Open Credit Network for the latest details

What is ‘mutual credit’?

Mutual credit provides a mechanism for businesses to trade without money, via a credit clearing system. A credit clearing system is an arrangement in which a group of traders, each of whom is both a buyer and a seller, agree to allocate each other sufficient credit to facilitate their transactions within the network.

Interest free loans for small businesses

It’s often hard for small businesses to get access to credit, which limits their ability to trade. The Mutual Credit Network is designed to help UK cooperatives and SMEs sell more, and save their cash reserves, by allocating them interest free credit to spend with other businesses in the network.

Promoting good business

The overarching purpose of the network is to build trust and create a more equitable economy. Members of the network will be required to sign a declaration of values, excluding exploitative activities and to ensure all participants adhere to ethical, environmentally friendly and equitable business practices.

Learning from others & collaboration

The network in Sardinia runs a very similar mutual credit network, which has ~4,000 business members and handled ~€33 million of trades in 2016 and ~€40 million in 2017. Sardex were inspired by the Wir in Switzerland, which is one of the oldest mutual credit networks in existence. There’s a good introductory article on Sardex on the FT from 2015 and a more up to date article from 2018.

We are in discussions with the founders of Sardex and also the in the West Midlands. Clearly this idea requires a strong network to become viable and we are keen to partner with other organisations who share our vision for an alternative economy built on trust.

To that effect we have been accepted onto the Finance Innovation Lab’s Fellowship programme and have assembled an advisory group including:

If you or your organisation are interested in partnering with us on this project please get in touch.

Reinventing ‘money’

Money, as we know it, is created as interest bearing debt by central and private banks. This is, by and large, the greatest problem on earth, which creates the vast majority of other global problems, such as environmental destruction, poverty and hunger. If we are going to fix these systemic issues then, ultimately, we have to reinvent money.

The below if from Thomas Greco, author of The End Of Money And The Future Of Civilisation

Mutual credit, and credit clearing, are the highest stage in the evolution of reciprocal exchange, which, in effect, make money as we’ve known it obsolete. The fact is that goods and services pay for other goods and services, whether we use money as an intermediate payment medium or not. Credit clearing makes the use any third party credit instrument (money) unnecessary.

Present day banking is mainly a credit clearing process in which additions and subtractions are made to their customers’ account balances. However, banks perpetuate the myth that money is a “thing” to be lent. If a client’s balance is allowed to be negative, the bank considers that to be a “loan” and will charge “interest” on it. Has the bank loaned anything? Not really. What they have done is to allocate some of our collective credit to the “borrower.” For this they claim the right to charge interest.

Any group of traders can organize to allocate their own collective credit among themselves interest-free. Done on a large enough scale that includes a sufficiently broad range of goods and services spanning all levels of the supply chain from retail, to wholesale, to manufacturing, to basic commodities, such systems can avoid the dysfunctions inherent in conventional money and banking and open the way to more harmonious and mutually beneficial trading relationships.

We would like to make especially clear that mutual credit is not an alternative currency or tax avoidance scheme.

Please visit the Open Credit Network and follow us on social media and / or via signing up to our newsletter to be kept up to date about the project.


The UK Mutual Credit Network project is endorsed by the following organisations:

Lab Fellows 2019



Good Money