Parish banking in informal credit markets: the business of private lending in early nineteenth-century Sweden

Håkan Lindgren
  • Financial History Review, April 2017, Cambridge University Press
  • DOI: 10.1017/s0968565017000087

Finance in pre-industrial Europe

What is it about?

My study demonstrates the existence of a private, informal and lively credit market in rural Sweden during the 1840s, a period that predates the development of a modern banking system. The market, mainly based on private promissory notes, was concentrated in the hands of a limited number of wealthy farmers who specialized in lending. They facilitated access to credit to well-off farmers, regardless of whether they owned their farms or leased taxed land. By using information from probate inventories, the article analyses the wealth portfolio and characteristics of the lending business of the largest creditors ("parish bankers") in a judicial district of southern Sweden in the 1840s. The heart and soul of their business was an intimate knowledge of the borrowers´ creditworthiness and mutual trust, as typical of local credit nerworks. The article also explores the existence of an intergenerational transmission of parish banking business - a dimension of private lending that opens an original path of research on local credit markets in early modern Europe.

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