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Impact Multiplier: Multiply the impact of recovery funds for SMEs

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Innovative response

Our communities are being hit hard by the Covid19 crisis, especially small and medium sized enterprises. As a consequence Europe faces a seriousrisk of a deep and lasting recession. It is in the interest of both private investors and regional authorities to join forces to support SMEs. However, how can we maximise the impact of these funds and create a truly sustainable recovery?The Impact Multiplier system is based on a tried and tested platform that will boost recovery by increasing the velocity, the circulation and use of recovery funds and private investments. By making money circulate faster and more often among local SMEs, the impact of recovery and investment funds will be multiplied. This initiative is a B2B approach that connects with the European Solidarity Voucher Scheme which stimulates B2C consumption. The revenue from this system can bring about a return on investment, as well as be re-granted towards civil society activity for a truly healthy and sustainable recovery.

Learn more about our project: https://territories4resilience.eu/

Specific issues addressed and anticipated impact

The Impact Multiplier system is a fintech platform based on the software Cyclos. Funding from various sources will be channeled through the Impact Multiplier, a dedicated payment platform for SMEs. The funding is digitally rooted to multiply its impact in two ways:
1. The money will circulate between the participating SMEs for a fixed period. This increases the income of all SMEs, including those companies that don’t receive government support, while they do suffer from the economic crisis caused by Covid19. Businesses will see that through cooperation they earn greater revenues, because their colleagues and competitors are to earn and spend.
2. A small daily fee, a negative interest, on the circulating money incentivizes participating enterprises to spend quickly, allowing others to earn and spend more within the community, all the while healing the recession and socio-economic damage. Previous use of this technology in local systems shows that this enables money to circulate at least three more times within a community of users than otherwise would be the case.
Applied to recovery funds and investments, this could make a substantial contribution to the recovery of small enterprises and the regions they operate in. The additional income for SMEs generated through the system brings additional tax income for governments to retrieve part of their investments in recovery.
It is important to highlight that this system can continue to operate beneficially far beyond the Covid19 crisis. It can keep on stimulating local businesses or even pan-European communities long after the recovery is complete. It would not only add to socio-economic stability, through reinvestment in civil society, it will also add to the democratic fabric of our communities, preventing the tendency towards radicalisation which crises always bring with them.

Organisations/institutions involved

The consortium is convened by the Social Trade Organisation (STRO) and Alliance4Europe, and welcomes partnerships with local authorities, regional governments, business networks and civil society. As of today the consortium participants come from France, Spain, Greece, Italy, United Kingdom and can be found in the following link: https://territories4resilience.eu/consortium/

Potential issues

The expansion of the network is of main importance. At the beggining it will not be easy to have a well established network in terms of participants (SMEs, customers and Authorities) and see the positive effects in business revenues and local/regional development. A wide variety of SMEs must participate in order to ensure the viability of the Impact multiplier System.

Level(s) of government:
  • Regional/State government
  • Local government
  • Non-Profit/Civil Society

Issues being addressed:

  • Resource management and mobilisation
  • Governance responses
  • Social effects of the crisis
  • Financial Technology solutions

Response contact:

[email protected]

Response tags:

Media:

Date Submitted:

30 June 2020