Interest And Gift

This article presents the private lending in a small city in western Zhejiang province. The intention of this article is to clarify the rules of the culture running on private lending business. The main theme of this paper is that private lending depends on social networks which constructed by "gifts".To illustrate this theme, this paper will be divided into three main sections:Firstly, this article explains people living in the city understand the location of private lending in the financial industry ecosystem. Private lending stands in the middle layer of the three-tier financial ecosystem and the upper layer is bank lending market, the lower is the so-called "usury". These three markets have their own characteristics, operating rules, while the most prominent features of private lending is to use the gift to construct a network of human relations.Secondly, we will analyze the gift playing a key role in the two profitable channels of private lending industry—"fast money business" and "slow money business." Through the gift economy aspects of detailed examination of gift-giving occasions, gift-receiving and thank manner, giving and receiving gifts in the relationship between each other, I will clarify that:for the reason of "fast money business" in private lending industry, even in the basis of its entire existence, this phenomenon can not do without the acquiescence and cooperation of government officers and the official support for bank. The power—attachment relationship between private lending business and the government must rely on the instrumental gifts. For the "slow money business" aspect, we must have a large friend relationships circle to expand the revenues and reduce the risk. In order to create and maintain this unfirm friend relationships circle, we must rely on the usages of "expression gifts"(materiality) like gifts, banquets, surrender part of the profits and so on.The second part of the discussion shows the private lending is undoubtedly rooted in the original gift exchange rules. It can be considered that the private lending is a modern form of gift economy which is based on the principle of reciprocity. However, due to the core medium of exchange is money rather than goods, and its ultimate aim is to get monetary interest calculation rather than emotional relationship computing, the moral values of traditional gift economy can’t make the private lending business rationalization. Then, in addition to operate a gift economy, the lenders are also keen to operate "ritual economy" in order to get rid of the moral stigma—which is the third part of the theme. This paper will describe how a lender willing to sponsor lavish charity, do good deeds, do banquets and other ceremonial "excessive fees" to consume interest. Such "ritual economy" is actually tantamount to sacrifice to support local cultural universe of moral system. Lenders want to "purify" their immoral interest income while bleach their stigmatized life.In short, the purpose of this article is to put the private lending back into the moral economy and take a sympathetic look to review this business. Under this perspective we may be able to see the lender who we thought to be occupied a position of strength are just nobody in the tide of the times.