Clearing Clubs

Mutual Credit Services uses multilateral obligation set-off as the engine of our ‘Clearing Clubs’ platform. Participation is low risk, as it only requires businesses to share a small amount of non commercially-sensitive information about their purchasing from local suppliers. Benefits show increasing returns to scale and diversity; the more participants representing the more sectors, the more likely it is that debt-clearing invoice loops can be found.


These characteristics make it particularly suitable for bringing large numbers of businesses into initial collaborative finance relationships. Users submit details of their purchasing from local suppliers, defining the obligation network. MCS and Informal Systems periodically run the MTCS algorithm on the data and return the results (detailing which invoices have been cleared and by how much) to users, who then update their accounts payable and receivable accordingly.


The images below show screens from a demo Clearing Club app that MCS developed for a pilot in Lancaster and Morecambe.

As well as allowing pilot participants to share their obligation data, the app also featured a directory of other registered businesses. In an up-and-running Clearing Club, this would enable users to find new local customers and suppliers in order to close more loops, thereby benefitting themselves and other participants as more and more debt is cleared.


Subsequent to this pilot, we are working towards the launch of a fully-developed system through the Local Loop Merseyside project.

The map of the economy that arises as a by-product of collecting invoice data via the platform can also be used to identify trading clusters that could gain additional benefits from adopting mutual credit, and to identify opportunities and support the case for debt-free investment in new enterprises or community groups via use-credit obligations. As such, the platform provides a foundation for an evidence-based approach to community wealth building and the circular economy.

Left: obligation data from the Local Loop Lancaster & Morecambe trial. As of the end of the trial in March 2023, there were about 30 registered businesses with more than 70 obligations submitted. MCS – which has suppliers in Lancaster – appears as a ‘super-connector’ at the centre. Right: the obligation loops present in the dataset.

Following on from the launch of Local Loop Merseyside and validation of its business model, we intend to replicate the system across the UK and have already had several expressions of interest from potential on-the-ground partners. If you would like to learn more about joining this first cohort of our social franchise, please contact us.