Use case: Inter-company credit networks

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Inter-company credit networks

Money (or bank credit) is the highest form of credit, and can therefore be used in any situation. But it is also a relatively scarce and costly type of credit. Any businessman will know that using his own credit when possible, rather than bank credit, is preferable. Apart from its costs, bank credit can be fickle: after the 2008 crisis, SMEs suffered because banks started cutting credit lines.

Throughout history, using credit in the form of promissory notes or equivalent instruments was a standard way of doing business. Although nowadays this has largely been superseded by bank credit, all over the world credit networks continue to operate - even in Europe.

We are also seeing an emergence of peer-to-peer lending networks, some of them specifically targeted at corporations.

The next step might well be the re-emergence of inter-company credit networks, even in industrialised countries. The idea is very simple: companies in a credit network do business with each other and send each other invoices. But instead of paying these invoices, they just book them. From time to time, a clearing event occurs when credits and debits are tallied. Outstanding debts are then settled using bank money. Depending on the amount of business these companies do with each other, their need for bank credit lines will be reduced to a greater or lesser degree.

The sikoba network will provide a perfect platform on which to do this.


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