Loans that can only be spent at local stores

Guy Dauncey

An example of community banking comes from North Dakota, USA. During the Christmas period of 1987, banks in 16 small towns offered interest-free loans of up to $1,000, not in cash but in scrip, which could only be spent in local stores. The stores collected the scrip and were reimbursed in cash by the banks. This helped to keep local money in town, and helped to offset the usual haemorrhage of money away from the local economy into the huge shopping malls.

Guy Dauncey, 2069 Kings Road, Victoria, BC V8R 2P6, Canada (tel 604 592 4472 h; 604 592 4473 w and fax). Extracted from his book 'After the Crash - the Emergence of the Rainbow Economy' (Green Print/Merlin Press, 1988).

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