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Bristol Innovates Where Big Banks Fear to Tread

bp logo with hyphen 2Over two years ago the Bristol Pound launched to much excitement and media coverage. Coverage continues as the scheme was mentioned in national press at least three times this week and on BBC TV last night. Although the majority of Bristol Pounds are spent digitally, the paper is now recognised as an iconic image of Bristol around the world. Bristol Pounds are now accepted by hundreds of businesses in Bristol. The Bristol Pound is small but growing (est. £1m in transactions in 2015) and proving effective at getting businesses to use more local sourcing and reduce dependence on large multinational companies. This is good news for reducing supply chain CO2 emissions, building and retaining wealth in the region and sharing that wealth out more too. But on its own it will not address the need for businesses to access finance.

We are now considering other ways to help while remaining focused on helping local independent businesses. Too often the major banks fail to deliver finance that these SMEs need. This is a problem with the modern international banking system, made worse since the banking collapse in 2008, with real impacts in Bristol, the EU and around the world. The Bank of England have pointed to the possibility of deflation in the UK, already common across the EU. But why is it like this? A recent article in the Guardian by the recognised monetary historian David Graeber claims the Bank of England has blown the lid of the common understanding of how the vast majority of money is made available to businesses and individuals alike. In reality money can be created to match the ability of everyone in the economy to do work. But for historical and political reasons most of us are badly misinformed and believe there is a set amount of money that some people save and others borrow. Wrong!

What can we do about it? In Bristol an EC backed pilot is being run between the Bristol Credit Union, Bristol City Council and the Bristol Pound. One element of this pilot, from the team behind the Bristol Pound CIC, is a proposal to create interest-free loans based on invoices and mutual credit between a network of co-operating businesses. Called Bristol Prospects, it is significantly different to anything else in the finance sector and it will appeal to local and regional businesses and institutions looking for:

  1. Interest free credit finance.
  2. Genuinely new sales and more sales volume with other businesses based in the Bristol region.
  3. Instant payments on invoices to larger institutions  – no more having to wait for months before getting your money.

Set up as a members co-operative, it will be run as a not for profit scheme for the benefit of its members – businesses in Bristol, Bath and the surrounding region. This Tuesday 3rd March at 9.30 -11.00 there is a soft launch at the Engine Shed by Temple Meads. We want to see what appetite there is for this. We hope business people from the SME sector will come along to find out more and maybe ask us some hard questions.

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