Circular Trade Analytics

EVENT! Tomaž Fleischman presents his paper on the analysis of >130K Sardex transactions (>€31M).

5th March, 16:00 GMT - meetup link: https://www.meetup.com/circular-economy-analytics/events/276538067/

Please do share this link.

Tomaž Fleischman will present his paper, 'Liquidity-Saving through Obligation-Clearing and Mutual Credit: An Effective Monetary Innovation for SMEs in Times of Crisis', followed by questions and a general discussion.

Published late last year, this paper demonstrates the remarkable potential for liquidity saving (in straight terms, cashflow improvements) in the context of an SME trading network from two mechanisms - obligation-clearing (continuous multilateral invoice offsetting) and mutual credit (pooled trade credit).

In crude terms, each mechanism alone reduces the need for hard cash to settle invoices by around 25% for a typical participant in the network - and further, they can operate in tandem without diminishing this impact, for a typical 50% reduction in the quantity of cash needed within the network to finance internal trade.

The mechanisms analysed are not theoretical either - the Slovenian state has been operating a continuous clearing system for decades, which have helped that country weather several financial crises. And the Sardex network in Sardinia (from which the data originates) operates a Mutual Credit system that powers ~€50M per year in trade, with no bank-money involved.

We think this paper, and our developing partnership with Tomaž - is a game-changer. The paper demonstrates the really significant impact adopting Continuous Clearing and Mutual Credit in tandem can have for SMEs in a network, using real -world data. The result is robust, since in fact BeSolutions - the company Tomaž works for - have performed multiple similar analyses on even larger data sets from different countries and contexts with very similar findings.

What makes for a really positive partnership is the fact the MCS has independently developed the Trade Credit Club model which very simply introduces these two mechanisms into a business network setting, and at the same time solves the centralisation problem of other networks like Sardex (who with 4000 members cannot generate trust in sufficient quantity to manage without 40 or so staff members continuously brokering new trades)
The full paper is here: https://www.mdpi.com/1911-8074/13/12/295/htm

As well as chat channels (Telegram, zoom) it would be great if there were a links page (or even a fedwiki)? I haven’t the stamina for AN Other stream . But would be glad to be able to do catchup and read some docs from time to time.

I will post links here.