Monthly Archives: June 2006

WIRBANK: a Swiss initiative to help small businesses

Some people do misunderstand that local currency and other initiatives aren't for the business world: the WIRBANK(in German, French and Italian) in the Switzerland, founded in 1934, has been quite successful to help small businesses by offering them cheap loans in its own complementary currency called WIR("we" in German).

The bank was created precisely in times when the Swiss were still suffering from the huge impact triggered by the Great Depression. Several people who already knew Gesell's idea of "Freigeld"(free money) gathered to set up a clearing circle which later would evolve into a cooperative bank. People used WIR instead of Swiss Franc(CHF) as their means of exchange since the conventional money's circulation wasn't enough. Although WIRBANK gave up sticking to Gesell's original idea of demurrage in 1948, it still serves for trades among small businesses in the Switzerland.

As a rule only small businesses can join this cooperative. They use WIR(equivalent to CHF) in parallel with CHF on trading with other WIRBANK members(for instance, WIR 30 + CHF 70). They can also enjoy loans in WIR whose interest rate is lower than in CHF because WIRBANK can create WIR by itself while it has to borrow from the central bank with the burden of official rate, and it can offer, for instance, 2% loan in WIR and 5% in CHF in case the official rate is 3%.

Another advantage for WIRBANK members on joining WIR is the increase of their customers: those who have WIR can't spend it to non-members(huge and/or foreign companies), so WIR members have the advantage to attract other members. In this way they make up a circle in which their purchasing power stays without flowing over the border.

A survey proves that WIRBANK balances economic ups and downs, playing the complementary role to the conventional economy(to be depicted next time). WIR members trade more in WIR when the Swiss economy is staggering while they exchange less during the boom, so they are less afraid of economic recessions. More than 70 years of their history has a lot from which we can learn…

A book on WIRBANK