Prague's new ‘corrency’ doubles purchasing power at local businesses

A pilot project encouraging people to shop locally is being rolled out for Prague 1 today.

Raymond Johnston

Written by Raymond Johnston Published on 08.04.2022 15:00:00 (updated on 09.04.2022) Reading time: 2 minutes

Prague 1 has launched a pilot project to help local businesses that were hard hit in the past two years. Residents of the district can register to get “corrency,” a type of credit that doubles their purchasing power at participating establishments.

“The project’s pilot phase will use Prague 1’s public funds in the amount of CZK 2 million, which will be distributed by 2,000 inhabitants of our city district via credits of CZK 1,000 each,” Prague 1 Councilor Karel Grabein Procházka, responsible for business support, said.

“Residents will then use their credits for purchases in establishments registered in the project in such a way that, for example, if their spending is CZK 100, they will pay CZK 50 on their own and pay CZK 50 with the credit,” Grabein Procházka added.

Residents can apply for credits and businesses can apply to participate between April 8 and 28 by filling out an online application. Those who receive the corrency can use it from May 1 to June 30. Residents must be citizens over 15 years of age with a valid ID card showing a registered address in Prague 1. Corrency credits cannot be used for tobacco, alcohol, or weapons. They also can’t be used for gambling.

“The goals of the project, including its pilot phase, are clear – support for individual establishments, maintaining and strengthening the purchasing power of the inhabitants of Prague 1, and at the same time mapping which goods and services residents want and where they look for them," Grabein Procházka said.

Photo: Facebook / Corrency
Photo: Facebook / Corrency

Prague 1 Mayor Petr Hejma said that the corrency project has been in development since autumn as a follow-up to other types of support for businesses hit by the Covid pandemic.

The past two years have been difficult for local entrepreneurs due to the coronavirus pandemic, and when everything seemed to be getting better, the economy was hit with high inflation and rising energy prices.

“As it turned out in recent weeks, the situation is now more serious than in the autumn and the corrency project is even more necessary,” Hejma said.

FEATURED EMPLOYERS

Tomáš Prouza, vice president of the Czech Chamber of Commerce, welcomed the concept.

“We appreciate the three main aspects of the project: First, it is not a net subsidy, but a strengthening of the motivation of people to spend in Prague 1. Second, if someone deserves support it is the entrepreneurs in Prague 1, who were the most affected by coronavirus. And third, the project will provide very good data on the establishments that citizens really want and appreciate,” Prouza said.

Corrency was first tested in the spring of 2021 in Kyjov, South Moravia. Some CZK 800,000 were distributed among more than 1,500 Kyjov residents. In the end, CZK 2 million reached the local economy, as the inhabitants added an average of CZK 1.2 of their own for each crown they received.

The corrency system is the idea of Pepe Rafaj, an internet entrepreneur, financial sector innovator, and co-author of the first electronic wallet in Europe. He collaborated on the project with Petr Stuchlík, co-founder of the financial company Fincentrum.

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