Chapter 29 "There is a lot of oil and water" in private lending

Anyone who understands economics knows that new wealth is also being generated while capital is circulating. But how this truth is applied in practice, I am afraid that no one knows better than Wenzhou people. Mr. Jin has a small factory with 100 employees in Wenzhou Economic Development Zone. There are many bosses like him in Wenzhou.But his other identity is probably only known to the Wenzhou bosses who are in urgent need of money. As you may have guessed, Mr. Jin himself is a "bank" responsible for lending money, that is, the owner of an "underground bank" as the saying goes.In his role, he was even busier than his role as the factory director for a while, such as during the Chinese New Year.

Mr. Jin introduced that many companies are short of money at the end of the year. When they have no way to raise money, they think of borrowing money from "underground banks".When he is lucky, Mr. Jin's underground bank can even lend more than 10 million yuan a day.Because many people call to borrow money every day, and the borrowers are generally small and medium-sized business owners, and the required amount is relatively large, ranging from tens of thousands, hundreds of thousands, to millions.It is almost tens of millions to receive five or six orders a day. Mr. Jin also revealed that after running the "bank" for one year, he released a total of about 100 million yuan, and his income from interest is also several million.

Many Wenzhou bosses are also engaged in "underground banks" like Mr. Jin's.Although this nature is similar to usury, it is different from usury as understood by ordinary people.The nature of this kind of bank is mainly to provide financial convenience for entrepreneurs. Generally, the borrowing time is relatively short, and if it is an acquaintance, there is no need for guarantees and various IOUs, and there will be no incidents of violence to force repayment. Rely entirely on the credit of Wenzhou people.Moreover, most of the borrowers are acquaintances. If they are strangers, they will not borrow even if the interest is high.

When disbursing the loan, in order to ensure that the loan can be recovered, Mr. Jin also followed the borrower to personally inspect the borrower's operating conditions, and did not lend until he believed that the other party's investment project was good.This is very similar to a bank's lending policy. Due to the need to pay a certain amount of interest, and the fact that it is easy to affect their own reputation, generally the creditor will repay the loan immediately after the capital turnover is over. The existence of this "underground bank" not only facilitates borrowers, but also provides interest income for the owner of the "underground bank", which can be described as a good investment direction.

Taking Mr. Jin as an example, he also accidentally discovered that this is a good investment project.At the beginning, he had some spare money in his hands, and his friends had worked hard for several years, and they all had some money in their hands.Since his factory is in his hometown in Wenzhou and he has many acquaintances, his friends put their own money here first. When any of them need capital turnover, they can get it from here and pay a symbolic interest. It is equivalent to everyone's common reserve fund.The money was about 6 million at the time, plus him, a total of 6 partners.

Later, with the continuous development and growth of the business of myself and my friends, more and more spare funds, they no longer need so much money to turn around their business.So the six people discussed it: Since there are many bosses who need capital turnover, why don't we lend this money to others?Thus, this underground bank was formed. Because the interest rate adjustment is relatively reasonable, ordinary entrepreneurs can afford it, and the reputation is relatively good, Mr. Jin's underground bank has begun to gain a certain reputation.After working for a long time, more and richer bosses acted as masters, and handed over the money in their hands to Mr. Jin’s bank to take care of. Mr. Jin was completely promoted to be the owner of the bank, and bank loans became a new investment. project.

Due to the existence of underground banks, many people rumored that all Wenzhou people borrow money.Although the facts are not so exaggerated, private lending in the nature of underground banks is very common. After the country promulgated the new eight regulations, Wenzhou capital withdrew a lot from real estate, and the whereabouts of the capital became a problem for a while.Under such circumstances, private lending has become the most popular short-term investment because of its high rate of return and quick return.When small and medium-sized enterprises cannot obtain capital turnover through banks, it is most normal to borrow money through underground banks.

Private lending is not only a manifestation of Wenzhou's rational use of capital, but also a process of Wenzhou's capital appreciation, which provides guarantee for Wenzhou people's entrepreneurship and capital expansion. It should be noted that private lending and usury are not the same meaning.The "underground banks" founded by Wenzhou people are sometimes realized through private equity funds and small loan companies. In some places, the Wenzhou Municipal Government has also set up a special management team for the "underground banks". towards legalization.Just as Bao Yujun, president of the China Private Economy Research Association, said: "It should be a major breakthrough for private enterprises to get involved in microfinance companies, and the privatization of the banking industry can be truly implemented." The reason why private lending can be popularized in Wenzhou business circles Come, it is not unrelated to these two factors:

First, the market demand is huge, and borrowers and lenders are interdependent. Boss Wang has invested in a solar energy production base. The prospect of this investment project is very good, especially in the vast rural areas.But such a good investment project is almost rotten in his hands.The thing is, the solar energy on the market at that time had a very obvious defect: because the sunlight is not strong in winter, the water burned in winter is not hot, and it is difficult to guarantee the water temperature required by people.To solve this problem, a large sum of money must be invested, because a very expensive material is used here, and Boss Wang's existing funds cannot meet it.In the end, the outcome of this problem is that Boss Wang obtained the capital he needed from underground banks through his friends.

There is never a shortage of people in this world who are eager to make a fortune. Regardless of whether they are talented or mediocre, whenever they have the opportunity, they all want to be their own boss and realize their entrepreneurial dreams.For most people, what they need most to make a fortune is the initial start-up capital, which requires an investment cost.There are still many small and medium-sized enterprises like Boss Wang who need financial support across the country.Therefore, private lending has a large market space. However, for Wenzhou people, the significance of the existence of private lending is not only this, it can be said that the main purpose is not only for their own profit, but also to achieve mutual benefit and mutual prosperity for everyone.

Wenzhou people are "all businessmen", all of them are shrewd and will never borrow money for no reason.When there is a borrowing situation, there is definitely a need for capital turnover and the need to expand the scale.Of course those lenders understand this, and the significance of his establishment of an "underground bank" lies in this. Before lending money, even if it is a very good acquaintance, the lender will inspect the borrower to ensure that the loan can increase wealth and help others, and then sign a loan contract on this basis. The two sides agree with each other, and you love me, which has contributed to this emerging investment project. Second, the interest rate is high and the return is fast. When real estate speculators, coal speculators, cotton speculators and other big speculators failed, some Wenzhou bosses saw the huge profits from investing in "underground banks" and began to "be ready to move". As an investment project, private lending began. produced on a large scale. In 2010, the Wenzhou Central Sub-branch of the People's Bank of China conducted a survey on the private lending situation in Wenzhou and found that since the banks tightened the loan scale, Wenzhou's private lending market has been extremely hot, with the highest interest rate rising to 14.37%.With such a high interest rate, many private capitals in Wenzhou have used various forms such as pawn shops, guarantee companies, and unions to realize loans. The survey also found that 89% of individual households and 59.67% of enterprises in Wenzhou actively participated in private lending.In other words, out of every 100 people in Wenzhou, 89 people put out their "private money" to invest in this project and get huge profits from it. For a while, the monthly interest rate of Wenzhou's underground banks rose to 5 cents, or even one cent. two corners.Even so, the next home can always be found, which shows the popularity of this market. In short, as an investment project, private lending has been accepted by more and more Wenzhou people, and everyone will not be afraid of it because of its "usury" color.When the whole people generally accept this nascent investment project, it will definitely attract the attention of the country and the government, and the privatization of banks will not be far away.