The Confession Of A Private Lender Is To Earn Money By Not Following The Rules.

For a long time, private lending All of them are participants in China's economy. Together with banks and other financial institutions, they form a huge and complicated indirect financial system. A large number of enterprises and individuals play the role of money broker. They have no clear boundaries with entrepreneurs who do business, and are also considered as a risk factor in the economy.

This story tells the story of Jiangxi businessman Li Ming's lending experience is the tip of the iceberg of China's private lending. To some extent, it is also a microcosm of the national economy of China, the second largest country in the GDP world. The maintenance of the capital chain means that the economy continues to thrive. No theme is more important and realistic than this.

Usurer

Li Ming came to Beijing to meet a friend who had just been released on bail, and was also his debtor, "a suspect who is guilty of fraud."

In a fifty or sixty square meter rental house in the Fourth Ring Road of Southeast Beijing, Li Mingxing told the times weekly reporter about his business process: starting from the early 90s of the last century, but after 2008, in his words, it was "purely lending to the public".

"I have never written any ious before," Li Ming turned to find out a pile of white paper with a written word. This is the IOUS and ious that he had just asked his friend to write a day ago. The thick black handwriting was all written from the same person. "The loan is the principal, and the IOUS is the accumulated interest." These are old debts that dragged on for two or three years.

Liu Fang, who wrote the IOU and IOUs, had recently been mildew, because the company had a cash flow problem and he was arrested by fraud on credit card and was released just now. Li Ming did not know when he could lent hundreds of thousands of yuan to Liu Fang a few years ago, so he left his credential for the first time.

However, for Liu Fang's unlucky friend and fellow townsman, Li Ming did not mean anything.

Li Ming, 48, was born in a poverty-stricken old revolutionary base area in Jiangxi province. He had a strong accent in his hometown when he spoke. Like many businessmen of their generation, it is essential for them to go out and do business. But when the reporter mentioned Gan business holding a group, he immediately corrected: "Jiangxi people are not enough to hold together, far less than Wenzhou people, Fujian people."

Li Ming lent money to most acquaintances like Liu Fang, sometimes acquaintances of acquaintances, until he borrowed money without having to write any evidence. As for what people do specifically for money, sometimes they know that sometimes they may not know it.

"I only do short-term." What Li Ming means is that only those who are in urgent need of capital turnover can quickly recover their principal and interest. However, such a business is often less relaxed, such as Liu Fang's "bad debt", such as a larger amount of loan a year ago, and the debtor has not fulfilled the promise of repayment for three months.

This is Li Ming's headache. In another two weeks, 4 million yuan from the bank was due to expire a year ago. The loan was originally borrowed from a friend who was a real estate developer in Jiangxi's hometown. After handling the Beijing side, Li Ming had to go back to his hometown to recover this more important sum.

According to the possible results of this chase, Li Ming made three preparations: the most ideal is to force the other party to borrow money from other places and repay their debts. In this case, "this year's difficulties are over"; in the second case, it is impossible for the other party to borrow money from the relatives and friends, but also to the banks. The third way is to borrow money from relatives and friends, and only to find private intermediary agencies to borrow. The cost of this case is the highest, "interest at least 6 cents a month".

From entrepreneur to professional creditor

After graduating from junior high school, Li Ming spent the longest time driving a tractor. When the brothers in their hometown built up their timber business, they went to Zhuhai, Guangdong in the early 90s of last century. Li Ming also went down south to work in Zhuhai's brother's factory. Later, he began to do his own business: he opened an electronics factory, embroidered factory, sold dance tapes, game machines, and made steel trade. Although the steel trade has not been done for a long time, the title of Li Ming's business card is still the person in charge of a steel trade company.

When businessmen like Li Ming have not yet played "finance", China's commodity economy is still in the most primitive period of life, and everywhere is the opportunity to become rich. When Li Minggang arrived in Zhuhai, he got a very good income from a telephone booth. Later, he almost made a profit by selling dancing blankets.

Li Ming talked cheerfully about that time when he was the first producer of dancing blankets in China. In the late 90s of the last century, the dance carpet was spread from Japan to Hongkong. When Li Ming traveled to Hongkong, he bought several pieces, and then found the technical personnel to develop, imitate and launch the domestic dance blanket. Dancing blankets quickly became popular. Small commodities markets all over the country demanded goods from Li Ming. At the most time, they received millions of yuan deposit.

However, due to the lack of technology, Li Ming sold the dancing blankets in turn and returned to work. Coupled with the lack of production capacity of his small factory, he failed to achieve a large quantity of supply. Finally, he could only return several million yuan deposit.

Li Ming's business didn't seem to bring him to a higher level on the ladder of wealth. He was embarrassed to call himself "unsuccessful", and one of the reasons was "the rule of rule". For example, when doing business in steel trade, they never give short weight. In the industry, using less steel as standard length steel to increase profits is a common trick.

People must "earn money by not following the rules". This is Li Ming's philosophy of business which has been summed up for many years. His complaints and criticisms also pointed to the financial system: "the steel trade industry has been killed by banks and Guarantee Corporation. When the situation is good, chasing us loans is not pleasant to hear, it is abetting us to cheat, regardless of whether the other party has the ability to repay the loan."

Li Ming's grumble is also the side of the deterioration of relations between steel traders and banks in recent years. The bank will default on the steel trade to court. The steel traders accused the Bank of tightening the loan and not breathing time to the enterprise, and the capital chain would be broken.

After 2008, for steel trade enterprises, it has entered a meager profit era. Enterprises can not continue to develop highly leveraged financing solely on the basis of steel business. Under the background of the global subprime crisis, the Chinese government's loose monetary policy has allowed banks to start lending in a "big leap forward" mode, and steel trade enterprises have enjoyed a more relaxed financing environment.

"The whole industry is in and outside the bank, lending to the bank." Li Mingru is a generalization. In fact, the so-called "Baotuan" is the financing mode of joint insurance mutual insurance, chattel pledge and guarantee institutions that are popular in the steel trade circle. Enterprises can help each other to increase credit. In addition to joint guarantee, many steel trade market owners also set up Guarantee Corporation to provide financing guarantee for small businesses in the market. Under such a group, one of the steel traders has financial problems, and can also fill the gap by collectively collecting money from other steel traders.

Although there are advantages in holding a group, people often feel more rational than human beings. Li Ming is well aware of the hardship, "sometimes borrowing money to acquaintances, the possibility of not getting back is bigger."

Steel traders often borrow money from banks for other investments, such as real estate. In recent years, the steel trade industry, which has been repeatedly reported by the media as a "industry crisis" and practitioners "run away" and "commit suicide" as a gimmick, has been more like a group playing financial industry. Some large enterprises in the industry have already "diversified", and the main source of profit is not steel trade.

Li Ming admitted that a large steel trade enterprise in a trade of his relatives had invested in shares, banks, guarantee institutions, hydropower stations and other industries. The company borrowed 50 million yuan to a real estate development project in Langfang, Hebei several years ago, but so far it has not been recovered.

The report of the China logistics and purchasing Federation of iron and steel logistics Commission recently released said, "since the crisis of steel trade in 2012, the number of steel traders in the whole country has been reduced from 20 to 10 000." In these 100 thousand families, it is possible to include a lot of steel trade enterprises that exist in Li Ming's name.

Price and cost of money

"When you were doing business, you didn't know that you had to pay interest when you borrowed money from others." Li Ming described his ignorance of financial operations for a time. Now, in a chat with the times weekly reporter, he repeatedly repeats, "nothing is more profitable than playing with money".

Li Ming's 4 million yuan loan is now borrowed from a bank with a lawyer's friend's house as collateral. The interest rate that banks lend to him is about 7%, and he reclaims it is "three cent interest", which is 36% of the adult interest rate.

However, the profit is not as high as the detailed account. For example, although lawyer friends lend their houses to their mortgages without compensation, they spend about 300000 yuan on their gifts and other personal spending in one year. If they can not recover the 4 million yuan in time, they will also borrow money from the usury and repay the bank.

Most of the 4 million yuan was lent to a real estate developer in his hometown. The latter was operating a villa project. In this regard, Li Ming also made the worst and optimistic plan: "big deal, he took a few houses for me to pay debts, I do need a villa in my hometown." And I know many friends there who can help him sell several sets. "

Li Ming's "home" in strict sense is in Hunan, and his second wife is a civil servant in a small town in Hunan. Li Ming's residence in Beijing is like a temporary resting place. He told the times weekly reporter that in a suburb of Beijing, he had a house of his own name, which he used to pay for debts before. He had never seen one of his own, and could not even address the specific address.

China's real estate market is at a delicate stage. In March 30th of this year, the central bank, the Banking Regulatory Commission and the Ministry of housing jointly issued a document to reduce the minimum down payment ratio of the two suite commercial loans from 60% to 40%.

Li Ming declined to comment on the topic of real estate policy. He pointed out that the key to the success of investment is whether the other party has the ability to operate the "plate".

The former Li Ming friend's villa project in Jiangxi's hometown is now "a vacant land". The friend borrowed money from Li Ming at first, which was said to repay bank interest.

Li Ming agreed to return to Jiangxi 5 days before the bank loan maturity date to negotiate with the other side. As a creditor, Li Ming's status does not seem to be strong. His bargaining chip is that if the other party returns the principal and interest, and after the repayment of the bank loan, he will lend 4 million yuan again, and "naturally he will continue to lend it to him". Li Ming has consulted the bank ahead of time, and learned that after the loan was cleared for two days, the same collateral could be reissued.

"Loan sharking is not what people think they can get by sitting." Li Ming said.

Old capital and new business

In Li Ming's complaints about banks, it also includes the lack of management and irresponsibility in commercial banks. Way of lending 。 For example, these banks are not too concerned about the purpose of the loan and the repayment ability of the debtor. If they can repay the principal and interest at the expiration date, they will be able to "repay the old and borrow the new". Enterprises often try to borrow money and repay loans at this time. For those already in trouble, this means the risk will accumulate. And Li Ming's lending business seems to be on the way.