Private lending, also known as usury, becomes pale and powerless when ordinary people talk about it. Many people will associate it with the underworld and even regard it as the source of all evil. Today, with many years of experience in private finance, the author tries to do some analysis from the perspective of economics and explore the economic essence behind usury. The principle of supply and demand is the basic principle of economics, and the price of products is determined by both sides. Other things being equal, the increase of supply will lead to the decrease of product price, and the increase of demand will lead to the increase of product price. In other words, the price of a product is not decided by the producer. Even if you want to sell it high, no one will buy it, and the market will always buy it.

As a commodity, capital is also subject to the relationship between supply and demand, and its price is interest. Therefore, within the scope of China, the price of capital is determined by the strength of domestic capital suppliers and demanders, while the price of capital in some areas such as Xiamen is mainly determined by the strength of capital suppliers and demanders in Xiamen. Therefore, the level of interest is not determined by the fund providers themselves, but the strength comparison between the supply and demand sides. Think that different ways of borrowing have different prices,

The principle of matching risk and return is an important principle of finance. Simply put, the greater the risk, the higher the income, otherwise no one is willing to provide this product.

Among the loan products, banks often engage in the business with the lowest risk. First, banks have the strictest requirements for the examination of customer qualifications, and generally require collateral. Therefore, the overall feature of this kind of credit products is low risk, and naturally its income (that is, bank loan interest) is also the lowest, which is why people choose banks as the first choice for loans. According to the interest rate of bank loans, customers need to pay about 0.4%-0.7% interest every month.

If the borrower can't meet the requirements of the bank, or wants to enlarge the credit line that the bank can give, then the guarantee company needs to intervene. The guarantee company enlarges the borrower's credit through its own internal control measures, so that the borrower can obtain loans or more loans than the original bank. Of course, correspondingly, the guarantee company should charge a guarantee fee (generally 2%-3% at a time) as compensation for the borrower to bear certain risks. Therefore, for customers with poor grades, the risk is greater and the corresponding cost is higher (plus the guarantee fee, which is 0.2%-0.3% higher than the monthly interest rate of bank loans), which is in line with the principle of matching risks and benefits.

For customers who are unwilling to get involved by some guarantee companies, or who are in urgent need of money and cannot complete the necessary procedures required by bank loans or guarantee companies, they can only borrow money through pawn shops or private banks. Considering that the risk of borrowing from this part of customers or in this case is further increased, naturally, the income demanded by creditors is further increased. According to the market situation, if borrowers can provide real estate mortgage, the monthly interest rate is generally around 2%-4%, if they can provide vehicle mortgage, the monthly interest rate is around 3%-6%, if they can't provide collateral, that is, unsecured private lending, few people are willing to get involved. The main reason is that the risk is too high, you are willing to pay high interest, and no one is willing to provide products.

To sum up, it is not difficult to see that the public's views on private lending are somewhat biased. Objectively speaking, private lending is of great significance to meet the short-term capital needs of many businesses, because after all, the proportion of enterprises or individuals who can meet the qualifications and conditions required by China's above-ground finance is very small, and the complicated procedures of above-ground finance have aggravated this dilemma. And private lending has played an irreplaceable role in this respect.

Therefore, people who scold usury may wish to imagine that if one day you really need money and need it immediately, but you can't borrow it through formal institutions such as banks or raise money from relatives and friends, what should you do if you are in a hurry? You really don't want to borrow it? Or someone is willing to lend it to you, but you are determined not to use it because of the higher interest rate than bank loans? In fact, business is business, and whether to lend it to customers is a question of whether the risks and benefits match, rather than what it has to do with morality. After all, we can't always expect the living Lei Feng to appear when we are in trouble. Even if others are in trouble, we may not be the living Lei Feng. After all, everyone in this world has a limited ability. If we look at usury with a rational eye, we will understand that this is just a business, nothing else.

Interest on usury The capital price of usury refers to the monthly interest rate of one month 1 yuan, and six points are equivalent to the annual interest rate of 72%, 1 gross approach 120%, at least the bank lending (annual) interest rate of 5.3 1% (loan interest rate of 2008-/kloc-0).

Monthly interest rate 10 is converted into annual interest rate 120%, while the current annual interest rate of bank loans is 5.31%(loan interest rate in 2008-12-23).

The monthly interest of ten cents is (100%) 0.10×12 =120%.