DigiPay4Growth is a project that showcased the use of Cyclos as a digital payment system to channel purchasing power towards SME’s in the regional/local economy. It is an innovative approach that boosts regional/local development and represses unemployment. The DigiPay4Growth was financed by the European Commission from 2014-2016, and is currently still running successfully. Most pilot projects have long reached financial sustainability. The 4 pilots locations of DigiPay4Growth and their corresponding lead implementing partners are: 1) Sardinia (Sardex network, Italy ), 2) Santa Coloma (municipality of Catalonia), 3) Bristol (Bristol Pound, UK) and 4) various locations in the Netherlands (STRO).
In 2014, the payment software that was used in DigiPay4Growth, Cyclos, was awarded the Bill and Melinda Gates E-Pay Innovations Award for its innovative approach to maximize the impact of monetary flows on local economic development by the financial industry.
The main objectives of DigiPay4Growth were:
- To design, implement and showcase how government expenditures can circulate more often in a designated area resulting in benefits for regional/local SMEs from the additional circulation of money.
- Demonstrate how Fintech can be used to create additional credit possibilities for SMEs and use this innovative form of credit as a new source of purchasing power that is also transformed into circular money.
For detailed information about the DigiPay4Growth innovation, please read the information below and download the Digipay4Growth manual.
General and pilot specific results:
At the end of the 2016, 12 000 participating SMEs benefitted from € 7 million credit and €140 000 additional turnover. Purchasing power within the DigiPay networks circulated on average 5 times quicker than the Euro. Currently results in the original 4 pilots show continued growth and impact. Participating SMEs have made hundreds of millions of additional income.
The core partners of the DigiPay4Growth pilot in Sardinia are the regional government and the Sardex network. At the end of 2016 more than 4000 small business members were profiting from approximately 20% increase in yearly turnover. Due to this increase of income, the performance of loans was 65% better than would have been the case otherwise. In 2016 the 4000 participating businesses in the Sardex network added a staggering 40% to the overall economic growth on the island.
More information: www.sardex.net
It took some extra time to start the project in Santa Coloma (part of greater Barcelona metropole), because the central authorities in Madrid initially thought that the intention was to start of an independent Catalan currency. The project could finally start in 2016 once it became clear to the central authorities that the DigiPay Fintech solution could:
1) strengthen the position of local SMEs
2) no legal obstacles were found in extensive legal research done by project partners and
3) the tax office concluded that the project can also assist in their own struggle against whitewashing
The pilot in Santa Coloma demonstrated that (social) subsidies and civil servants’ salaries can be effectively channeled through Cyclos. Current results show that there are €600,000 circulating in Santa Coloma network , circulating 4 times before leaving the local economy.
The Bristol pilot shows that Cyclos can facilitate the payment of local taxes, business taxes and services from local government, but also transport such as bus and trains. In total €1,18m of government expenditures has been channeled through Cyclos during the DigiPay project period.
The project in the Netherlands started in 2017 and has been designed in such a way that it uses Cyclos as a platform for several economic communities in the Netherlands, making upscaling possible very easily . Results of the implementation in one of these communities, the Utrecht’s €uro, now show that (even though the economic conditions in the Netherlands are a lot better than those in Sardinia ) results seem to follow the same growth pattern than Sardex: in 2018 turnover in circular money passed the one million, tripling the results of the year before.