Self-Funded Social Impact Investment: An Interdisciplinary Analysis of the Sardex Mutual Credit System

ABSTRACT

Sardex is a B2B electronic complementary currency and mutual credit system. It allows private funding to be endogenously generated within a geographically limited socio-economic context, rather than injected from exogenous sources, leading to a greater level of positive social impact. Sardex promotes stable and constructive integration of market activity with democratic institutions and socio-cultural values, and is hence identified with sustainable development. This paper presents a case study based on 29 semi-structured in-depth interviews of Sardex members. By drawing on monetary theory, sociology and anthropology, the paper argues that Sardex implements a form of self-funded social impact investment.

KEYWORDS:

• Mutual credit
• social finance
• sustainable development
• anthropology
• monetary theory
• sociology

Acknowledgments

The authors would like to thank the members of the Sardex circuit who agreed to be interviewed for this research, as well as Giuseppe Littera and Carlo Mancosu (two of the Sardex founders), for their support and explanations. The authors are very grateful to the anonymous reviewers for their very thorough review and suggestions, which have significantly improved this article. Finally, the authors gratefully acknowledge the partial support for this research by the European Commission under projects EINS-COMPARE (CNECT-288021) and OpenLaws.eu (JUST/2013/JCIV/AG/4562), which made the interviews possible.

Disclosure statement

Paolo Dini started working as a consultant for Sardex on the 1 August 2016.

Notes

1. https://www.sardex.net/grande-successo-di-sardex-al-meeting-di-istanbul-del-dipartimento-sviluppo-delle-nazioni-unite/.

2. http://www.sardegnastatistiche.it/.

3. http://www.sorgentidicambiamento.eu/.

4. However, banks record this negative entry as a positive one, because it is treated as an asset since it is supposed to come back to them in the form of repayment of the debt.

5. However, everyone from the CEO to the newest employee interacts with circuit members and builds trust.

6. Greco, T. 2015. Sardex, a Brief Report. https://beyondmoney.net/2015/08/20/sardex-an-emerging-model-for-credit-clearing-exchanges/

7. Littera, G. 2015. “Sardex S.p.A.” Personal Communication.

8. WIR charges interest on large loans but not on small transactions. All transactions are charged a 1% fee, in Swiss Francs, which provides sustainability to WIR Bank and adds to their capital reserves (Studer 1998). Sardex moved away from transaction fees; to achieve sustainability, they charge a yearly membership fee that varies from 200 Euro for social/non-profit enterprises to 2000 Euro for large companies.

9. Individuals (natural persons) cannot accrue a negative balance, they can only spend a positive amount of Sardex credit.

10. “Italian Joint Stock Company”, as to explain what S.p.A means in English.

11. However, Sardex credits can be inherited and spent for up to 12 months.

Additional information

Funding

by the European Commission under projects EINS-COMPARE (CNECT-288021) and OpenLaws.eu (JUST/2013/JCIV/AG/4562), which made the interviews possible.