Abstract
This 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 1841–5. The heart and soul of their business was an intimate knowledge of borrowers’ creditworthiness and mutual trust, as typical of local credit networks. 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.
Highlights
This study demonstrates the existence of a private, informal and lively credit market in rural Sweden during the s, a period that predates the development of a modern banking system
This micro study of private lending in pre-industrial Sweden is an offshoot of a wider research project on informal credit markets prior to the institutionalization of banking intermediation
The existence of local private markets for credit in early modern Europe and North America is an established fact that traditionally attracted the interest of researchers in economic history and anthropology (Holderness ; Muldrew, pp. – ; Hoffman et al, pp. – ; Gelderblom et al ; Dermineur, among others)
Summary
This study demonstrates the existence of a private, informal and lively credit market in rural Sweden during the s, a period that predates the development of a modern banking system. Svensson used estate inventories from two smaller parishes located in the Scania flatlands to explore the existence of a functioning credit market in the late eighteenth century He used the expression ‘peasant bankers’ for local creditors with financial claims equal to more than per cent of their estate’s assets (the latter were not corrected for possible under-valuations) – an outstanding stock large enough to suggest that ‘it is probable that this money lending business was very important for them’ ). Our estimation of total claims and debts of the economically active population in Norra Möre in the years – , based on inventories, confirms that private informal credit dominated in rural Sweden even in the mid-nineteenth century. The five largest creditors in the note lending market in Norra Möre, –
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