Our town used to do something similar around Christmas time. I can't remember all the details, but I think folks could get a no interest loan from one of the local banks in exchange for "money" that could only be spent at local participating merchants. I never did it myself, so I don't know all the details. They only did it two years, though (2002 and 2003).
Here is the article in our newspaper about it last year:
http://www.pntonline.com/engine.pl?station=portales&template=storyfull.h...
Ours is a pretty small town. Total population about 12,000 people, and that's including the students at the local university (ENMU).
Hope that helps a little. I think the whole thing was mainly an incentive to shop locally for Christmas, not a year round thing.