Private Lending And Poor Sequence Pattern

It is pointed out in From the Soil, by professor Fei Xiaotong, that differential mode of association exists in traditional China. The traditional social network of Chinese is built through ties of genetic connection and regionalism. Men among social relationships are just like rings of waves generated by throwing a stone into water. Thus each person is a center in such network, whose social influence seems spreading rings. And distances among persons are embodied in them.Peasants in countryside confront problems of poverty and unemployment. Parts of them try to shake off poverty by undertaking a business. However, it is necessary for starting a business to finance from rural market. This thesis involves the case of a young peasant, named L, who financed a car. We find that, how to finance is much more a problem of how to derive resources from rural society than a simple economic problem.The thesis is completed through the field research of a rural community in Hubei Province, Middle China. The rural community, like most Chinese countryside, is in the process of enormous change. The case of L let us go deep into the field of nongovernment rural finance and understand the importance of nongovernment credit for rural economic development. After failed to finance a car from government bank, L turned his attention to nongovernment borrowing. Nongovernment borrowing is a kind of nongovernment credit, which is based on understanding and trust among acquaintances. It relies on genetic connection and regionalism, such as relatives, friends and neighbors. Ithas its roots on rural society and develops by interpersonal relationship network of rural society. In the process of L's borrowing, a social network is unfolded through different rings around him and his father. The network is also the road for L to obtain resources. In short, driven by peasants' instinct and sagacity, decentralized economic resources in countryside are gathered as their initiating capital through nongovernment credit.The thesis is a field research .The main thread of the story is L's financing process. By descripting the process of his applying guarantee credit and small credit, we analyze the limits of government rural bank for peasants' finance and the problems of guarantee credit and small credit confronted in rural financial practice. Due to these problems, peasants who need financed are in a dilemma. Furthermore, we point out the importance of nongovernment credit for peasants and rural finance and the relationship between nongovernment credit and differential mode of association. The thesis tries giving a sociological analysis of nongovernment credit and the connection between it and differential mode of association in rural society.Because of the existence of differential mode of association, acquaintance and confidence among people in rural society depend on genetic connection and region connection. And acquaintance and confidence are crucial to nongovernment credit. Thus nongovernment credit has to base on social network with differential mode of association. In the process of nongovernment credit, peasants are unconsciously inclined to maintain and reinforce existing social relationship structure. In summary, differential mode of association in rural society paves the wayto nongovernment credit and vice versa.