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- Interpersonal lending" in China: Infomal Personalfinance
"Interpersonal lending" in China: Infomal Personalfinance
CHEN YUXIONG
Reitaku University
In the planned economy period, the government came to do the capital distribution uniformly, to turn on the limited resource to industrial in the city intensively in China of the planned economy period. The harvest by agriculture was just sucked up although the civic life was guaranteed to some degree. Mutual aid "Lending and Borrowing between Individuals"(LBIs) in the farm village where the importance was low to the government, was admitted. Such LBIs is a kind of consumer credit.
Afterwards, LBIs was done "Misuse" by " Township-Village Enterprises" and "Individual Enterprises", and became business funds, saying that "Free Lending among the People". It indicates the lending and borrowing relation naturally generated between individual or "Individual Enterprises", etc. However, these were limited the range, and came to be requested the middleman. Those who introduced it by showing up according to the demand, did only the offer of information etc. first, and came to take "Introduction Commission" in the course of time. Moreover, the part assumed the introduction business to be an own occupation, and became "Moneylenders". In addition, they were not satisfied with "Introduction commission", and the one positively to borrow and to lend the capital became appearance, so-called "Native Banks". Finally, a part of "Native banks" started the deposit function that the government prohibited strictly, and became a informal "Financial Intermediary".
Many of these capitals have been used for the business although the borrowers are individuals. The government fears the obstruction to the concentration of the resource, and has taken the negative behavior for these ones. It came to be confused intentionally the procurement of the business fund with a consumer credit.
Thus, "Interpersonal lending" that has played a major role to the funding of the Chinese private small enterprise starts from the consumer credit, and is personal finance based on the personal confidence.
