Showing posts with label Moneylending. Show all posts
Showing posts with label Moneylending. Show all posts

Hinduism - What Is Moneylending And The Role Of Moneylenders In A Traditional Hindu Society?

 

Moneylending is a significant part of the traditional and contemporary Indian merchant families' economic activities.

Farmers must be allowed to borrow throughout the rest of the year since they only make money after the harvest.

In current times, many farmers borrow from banks, but in the past, these merchant families were their main source of funds.

Their interest rates typically mirrored the borrower's credit worthiness: unsecured loans might have interest rates as high as 30 to 50% per year since there was a large risk of default, whilst loans secured by collateral could have interest rates as low as 7%.

These moneylending merchants were financially tied to their farmer-creditors to some level, with one giving capital and the other providing labor.

Moneylenders couldn't reject loans to farmers after a difficult year since it would eliminate any chance of repayment in the future.

See Christopher Alan Bayly's Rulers, Townsmen, and Bazaars, 1983, for more information.


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