How Sweden's neighbor-to-neighbor lending gave way to modern banks
A new study of 19th-century Swedish credit networks reveals how ordinary people financed businesses and survival through informal loans before banking systems emerged. The research offers insights into financial system evolution that may inform policy on alternative lending and financial inclusion today.
Originaltitel: From Peer-to-Peer Credit to Banks: A Study of Credit Networks in Uppsala (1810-1910)
<p>This chapter examines the specificities of peer-to-peer credit networks in Sweden from 1810 to 1910. Before the advent of banks and in the absence of intermediaries like notaries, the allocation and deployment of financial funds in Sweden was mainly ensured by private lenders. Women and men borrowed and lent from each other, often at the local level, in tight-knit networks. Households financed investment in real estate, land, livestock, shop stocks, or even international trade via the allocation of capital from their peers, often via a promissory note. They also made ends meet, paid their taxes, and fed their families via deferred payments and small loans from family members, friends, and neighbors. First, this chapter examines the characteristics of peer-to-peer lending in the Swedish context from 1810 to 1910 using a series of probate inventories from the city of Uppsala. The chapter focuses in particular on the tools and contracts at the heart of these exchanges, as well as their users. Second, this chapter joins previous work on non-intermediated credit and the emergence of banking institutions and proposes explanations to the shift that occurred between non-intermediated financial transactions and banking transactions.</p>