ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Why Does Extralegal Finance Survive?

Debt, Trust, and Reputation: Extra-legal Finance in Northern India by Sebastian Schwecke, Cambridge: Cambridge University Press, 2022; pp 372, price not stated (hardcover).

Views are personal.

In the normative discussion of finance and banking, often a mechanical discussion is made between formal and informal finance, treating it as a residual category. In particular, traditionally, the discussion of an informal debt contract is couched in terms of the principal amount, interest rate, duration of the loan, and value of the collateral. Since the process of bankruptcy is shrouded in mystery in all such cases, the uncomfortable question of “what happens if the borrower is unable to repay the loan” is hardly asked. This book, in the finest tradition of scholarship of an economic anthropologist, probes into extra­legal finance with a specific focus on northern India. Sebastian Schwecke looks at the issues relating to debt through the lenses of social, economic, legal and histotrophic discourse.

It appears that Schwecke’s work has links with three distinct intellectual traditions. First, it draws on the informality literature via Hart (1985: 54) who went on to say,

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Updated On : 14th Mar, 2023
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