3FOOD

Third Industrial Revolution Consulting Group
based on securities. Especially when a demurrage is included in the system, credits can be
offered at lower interest rates, making sustainable projects profitable.
Mutual credit tends to work in an anti-cyclical fashion in relation to the standard currency,
hereby helping to stabilize the economy. Due to its small area of circulation, it has similar
effects as regional currencies. Mutual credit helps to increase the resilience of the economy by
offering a further monetary option, which can be essential in times of credit crunch. It creates a
cooperation network between companies.
A sufficient money supply is essential for a smooth running of the economy. There can be
several reasons why the Euro system sometimes does not allow an adequate supply. One
reason could be that the economic growth is lower than the liquidity premium. This can lead to
a credit crunch.
Just as any payment can create a chain reaction of further payments, any lack of money can
equally create a negative feedback loop. Thus a payment default, for whatever reason, can
create a negative chain reaction downstream. This is why, in order to keep the economy
running, it can be very important to have a secondary currency based on another mode of
operation. This is why this secondary currency can help stabilize the economy and jobs. It can
allow investments in TIR related projects such as renewable energies, by offering credits at
lower interest rates, making these projects more profitable. This helps the creation of
companies and jobs.
4.5 Crowdfunding
Peer-to-peer (P2P) lending provides more flexibility to the customer: Crowdfunding and other
participative platforms could replace some of conventional banking functions for borrowers
and lenders. Crowdfunding and traditional banking could become complementary rather than
mutually exclusive models. Some platforms extract additional information to complement
standard credit profiles. Crowdfunding and traditional finance could work in tandem to effect
first major changes within SME’s, project finance or start-ups (seed capital); in a second stage,
they could be developed/used to fuel investment banking activities in a P2P fashion (It would
be interesting for the Lux AIF’s industry). Crowdfunding could facilitate investment in TIR
projects.
4.6 Microfinance
Luxembourg is the leading financial centre for domiciling microfinance investment funds.
Coupled with other financial opportunities it makes, the Fiance Working Group suggests
promoting microfinance for micro-and social entrepreneurs in Luxembourg by fostering
“bottom-up innovative and sustainable projects.” While still a niche financial mechanism,
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