CzechInvest wrote a report on the Corrency project in Kyjov.
The coronavirus pandemic has been a major setback for many traders in their businesses. Ordered closure of shops for several weeks, loss of previously stable profits at the same operating costs or lack of staff. These were not the only problems that traders faced and eventually overcame so that they did not have to throw away their livelihoods. Many failed to do so, and the more successful ones subsequently wondered how to restart their lost profits.
The same issues were addressed by local governments. How to restart and revive the local economy after a downturn that lasted several months? The town of Kyjov was no exception, as it set about overcoming this problem in a unique way - by introducing a one-off Corrent unit into the circulation of the local economy.
Corrency is a system for supporting the local economy and a transaction system for distributing financial support. This financial support can be provided by any entity - state, local government, business or individual. The system of using these funds can be set according to the preferences of the sponsor, whether it is to support residents or selected areas of business. From the total amount of financial support in Crowns, a single unit of registration, the so-called Corrent, is generated. This incentivises citizens to purchase goods or services within a predetermined period and region. Those interested in participating in the project then apply the corrent together with their own contribution to the merchants. Only a selected group of citizens who meet the conditions of the project sponsor can be beneficiaries. Similarly, local traders who meet the conditions predefined by the sponsor can participate in the Corrency scheme. The aim of the scheme is for shops to resume their operations, for citizens not to save unnecessarily and to spend their money on purchases that benefit the local economy.
Properties of Corrent:
The use of the Corrency transaction system to support the local economy has excited the Kyjov City Council, headed by Mayor František Lukl. The idea of a pilot test of the functionality and efficiency of the system in Kyjov was proposed, which was very much appreciated by the Corrency project promoters. "Of course, we did not miss the opportunity to pilot the project in Kyjov. The concept is unique. You support citizens, but at the same time you motivate them to spend some of their money, which they might otherwise save, at local merchants. In this way, you support the local economy in a targeted way," František Lukl appreciates the project.
More than 1,500 residents participated in the scheme to revive the local economy of Kyjov and had the opportunity to redeem their donations in the form of corrent units at registered traders. Kyjov citizens who joined the project and made at least one payment in the first phase of the project could receive a total of 400 to 600 crowns in the form of corrents to their account verified at registration. They received a 50% discount when paying at a given business through corrents, which made it easier to get local business moving. Corrents could be redeemed at registered merchants, artisans, for services or culture. The only condition for merchants to join the project was to have a business establishment or headquarters in Kyjov. In total, 38 traders from many sectors signed up for the project. The most successful in Kyjov were shoe sellers, a pharmacy, home textiles, electrical, organic shop or a local burger shop.
Within the pilot project Corrency in Kyjov, a total of 800 thousand Crowns were transformed into Corrent, which were donated to the city of Kyjov by the company I, Foundation, s.r.o., which was behind the whole project in the pilot mode. Together with their own funds, local residents supported local retailers with nearly two million Crowns. Future entities that decide to allocate their funds to the project can be local governments, commercial entities or individuals. It all depends on how the Corrency system is set up in the region.
In the case of the town of Kyjov, it was a one-off support for traders to kick-start the local economy after the coronavirus pandemic. The project lasted for almost two months, from 26 April to 24 June 2021, when local citizens could apply their corrents to local businesses. The direct support system of Corrency can be freely set up with a specific sponsor, so the sustainability will be different in each case of its use.
The pilot project of the Corrency transaction system in Kyjov is considered very successful due to its results and positive reviews from residents and merchants. During the almost two months that the project was running in the city, a total of 3,482 transactions were made at merchants. Residents spent a total of 718,643 Corrents in their purchases. The average amount of corrents redeemed per transaction was 206.30 CZK. The total support to local traders during this time amounted to 1 940 392,- Corrents, which helped the local economy to recover and start making profits after the coronavirus pandemic.
The number of citizens involved in the project is also a positive outcome. All citizens over 18 years of age with permanent residence in Kyjov could participate until the capacity of 2,000 citizens was reached. A total of 1 574 residents took advantage of this opportunity and welcomed this support system in the town, which met their expectations. In the questionnaire survey, 84.9% of the respondents answered that they would recommend this project to other Czech or European cities or regions. On the other hand, a total of 38 traders from several sectors joined the project. By signing up, they raised awareness among citizens and had the opportunity to welcome more customers, thus restarting their profits. They also praised the speed of the whole correnty payment process, which they were initially a bit apprehensive about, as part of this pilot.
The Evaluated Data from the Corrency pilot was communicated towards the Ministry of Industry and Trade. Based on the success in Kyjov, Corrency is now being rolled out in other parts of the Czech Republic in a pre-selected form and system of operation. Other municipalities that have joined the project are the Prague 1 municipality and the Prague 18 municipality. The ambition of the founders of the Corrency project is to take this system of direct and effective support beyond the borders of the Czech Republic.