Author: BA Jiuling

Last week, the new rules on cash loans were introduced in terms of license plates, interest rates, sources of funds, and so on. So far this year, there has been a lot of negative news about cash loans.

The last similar example is P2P. Of the nearly 6,000 peer-to-peer companies two years ago, only one is still alive.

In fact, whether it is P2P or cash loan, it is the same thing.In essence, they all belong to some degree of shadow banking, not banks, doing what banks do.

What on earth is P2P and cash loan, and what is its "original sin"? Today we will tell you the story of Bajia Village.

Bajia Village is a big village with many people, a lot of things and a lot of money. Some people are short of money to do things, while others have spare money after they have finished their work, so they want to increase the value of the money. Then someone in the village needs to do one thing: on the one hand, pay the interest, collect everyone's spare money, and on the other side, put the money out and put it where it is needed. The banks in the village, large and small, are here to do this.

Running a bank is risky and related to people's livelihood, so the village committee set up a bank called the Central Bank, while the other kind of external business is called the commercial bank.Commercial banks deal with villagers, while the central bank only deals with commercial banks and has no direct contact with villagers.

If a commercial bank absorbs 10 yuan from the villagers, it must first deposit 1 yuan in the Bajia Village Central Bank, and the other 9 yuan can be used for a loan. This 1 yuan is called risk reserve. In this way, the leverage of commercial banks is limited, there can be no unlimited loans, and in case a commercial bank is poorly run, the central bank can hand over the money to them to deal with.

On the whole, commercial banks have a good life in Bajia Village. With the documents issued on a piece of paper, the deposit interest rate and loan interest rate are all set, and there is no need to worry. They are only responsible for finding people to save money and make loans. You can make money only by relying on the interest rate spread.

But,Commercial banks are mainly dominated by village institutions. It is easy for village enterprises to get loans, but it is difficult for individuals to get loans.

In the middle, it is like a fence, when the market is good, the people inside can live well as long as they play with their own people, and they will not think of coming out to help people outside, or the benefits and costs of helping people outside are out of proportion; when the market is not good, the fence is too high to get out, and villagers with strong demand outside still cannot get services.

Where there is need, there is satisfaction. the villagers are all very wise people, and they have finally figured out two ways:

One is to huddle together to keep warm.The village committee does not allow villagers to open their own banks, and everyone can do it secretly, and a group of people get together to help each other and engage in private loans. Doing it in private is relatively simple and rough, and the cost is of course much higher, and sometimes when there is an urgent shortage of funds, it is impossible to control so much.

The other is to work with people at the bank to find ways to get around the rules.To put it bluntly, it is called "innovation". To put it bluntly, it is like "smuggling", that is, the people inside help secretly transport some of the money out to lend to the villagers, and the interest is higher than the normal loan. otherwise, the payer will have no motivation, but a little lower than the previous method, otherwise the borrower will have no motivation.

For example, there is a rich Babaling in the village whose job is to help people build houses. According to regulations, the bank cannot lend money to him. In fact, his business profits are very high, land, houses and other collateral also look good, supposed to be high-quality customers, but there is no way, according to the regulations, no loan is no loan.

Then the curve to save the nation will come out.Loans should be taken care of by the authorities, but financial products are not within this scope.

The rich first find another person and package the loan as a special item. Anyway, it's not a loan. For example, it can be called a trust. In fact, the reason is the same, that is, to repay principal and interest three or five years later. Then this project can be sent to the bank and split into 50, 000 or 100000 strokes, which can be regarded as the promotion of wealth management products.

5% interest is given to depositors, the trust company responsible for packaging takes 2%, and the marketing bank gets 2%, plus a wide range of other costs of 1%. The total cost of getting this capital is 5%, 2%, 2%, 1%, 10%, which is still cheaper than finding private loans.

For banks, since they still have a share of this kind of business, they are happy to do the favor. As far as the villagers are concerned, they don't understand the Tao. Anyway, these wealth management products are similar to time deposits, and the interest is higher than it, so why not deposit all your money in the former?

A set of process has come down, and everyone has found that this method is very good.Those who are short of money borrow money, those who have money want to increase their income, and those who do fund transfer stations increase their profits and win three wins.Then all kinds of people in the village who are qualified to package and sell channels are involved. In addition to their old business, banks do the work of trust, and insurance, brokerages and funds do the work of banks. In short, it is a great prosperity.

You see, the above are all big players, and there is still a certain threshold. Borrowing projects are often tens of millions of dollars, and the amount of investment is at least 50, 000 or 100000, and millions more are needed. Small players, who borrow hundreds of thousands, tens of thousands or even thousands, and invest ten or twenty thousand, or even hundreds of thousands, are still not satisfied.

Another wise man, Ba Qi Ling, spotted the new opportunities. It turns out that no one does this because loans are such a troublesome thing. For such a small amount of money, it is still an old saying that the benefits are not proportional to the costs. However, the Internet in Bajia Village is very developed in the past two years, and everyone has a mobile phone, so it is not so troublesome to do it on a large scale.

BA Qiling feels that it is a platform to do something similar to the split of loans. One way is to have money in hand, then go to the borrower. One way is to have the need to borrow money, that is, to find the saver.In short, the need for small deposits and borrowing money is widespread, just advertise on the Internet.

Almost every TV series that has been popular on the Internet in the village in recent years has an advertisement recommending related products to you. For example, two years ago, people were relatively short of money, so they wanted to find people who saved money to deposit it. This kind of project is called P2P. this year, money is not a problem, and people begin to look for people who borrow money, called cash loans.

Some of them are really doing things. After all, the demand of all three parties is there, which is a potential market. Others just think that this is an opportunity to rob the east wall to make up for the west wall, which is called the Ponzi pattern. Anyway, they do not have to pay a deposit, and the scale is not limited. If you make an extra sum before anything happens, you will make more money.

In short, no matter what the circumstances, when you want a lot of money, such as adding leverage to stocks, or when you need a small amount of money, such as buying a mobile phone, you will be told that there is always a way to help you fix it.

When a sum of money is deposited in and then lent out, there is a favorable difference between one in and one out. Nominally, it is not a bank and is not under the control of the central bank under the village committee. In essence, it is the work of the bank. Both big players and small players bypass the complicated procedures and rules of the bank in this game.

If you do the same thing and are regulated in one case and unregulated in the other, then everyone must run away to the latter situation.

However, when it is not regulated, it is easy to go wrong. When the extraordinary profits were ignored, some people in Bajia village quickly put aside their awe of finance, and more and more people crossed the line, usury and forced debt came.

The leaders of the village committee have figured out the matter after watching it for some time. For big players, trust, insurance, and funds are originally regulated, but they are separate from banking supervision, so now put them together and ventilate each other, the process is a bit complicated and can be solved eventually. For young players, let me first give you a few strict rules and seal the opening.

Money in the financial market is often compared to water, and the governance of the financial market is also like water control. There is a dispute between blocking and sparse. Just as in the regulation of cash loans and cash loans, there are two distinct opposing views:

The high interest rate and debt extortion of ① cash loans have seriously disturbed the financial market and social order and need to be strictly regulated.

The existence and rapid expansion of ② cash loans, as well as the influx of capital, show that it meets the needs of the market and should not be strictly regulated, but should be liberalized.

In minibus's view, the problem in China's financial market lies not only in the number of blockages, but also in the mismatch between supply and demand. Forcibly channelling in any place may not be effective. For example, a cash loan means finding a gap in the fence and borrowing from people who may be insolvent at a high cost. It is difficult to say that the overall efficiency of society has been improved. So,As to whether cash loans need to be regulated, minibus thinks it is necessary.

But on the other hand, the seams on this fence are actually more and more, no matter for big players or small players, the efficiency of finding and digging cracks is getting higher and higher, and how to establish a guidance for the whole society to get what they need is the more important thing.

As Zhang Rong in the Han Dynasty said:"(harnessing the Yellow River) can be obedient to its own nature, and if there is no re-irrigation, all rivers will be popular, waterways will be self-benefiting, and there will be no harm of overflow."The key to China's finance is to "let each go according to its nature", reasonably sparse, block and use. Before that, the problems of P2P and cash loans are over, and other problems will always arise.

(from Wechat official account: Wu Xiaobo Channel)