In the "New Palgrave Economic Dictionary", the explanation of credit is: "Providing credit (Credit) means giving away the property rights of something (such as a sum of money) in order to "Exchange for the ownership of another item (such as another part of money) at a specific time in the future"

The explanation of "Oxford Law Dictionary" is: "Credit (Credit) refers to receiving or providing. "The practice of promising to pay for goods or services not immediately but in the future." "Money and Banking" explains: "The category of credit refers to the economic behavior of lending. The characteristic is payment with the condition of recovery, or acquisition with the obligation of return; and the reason why the lender lends is because he has the right to obtain interest, and the reason why the latter can borrow is because he has assumed the obligation to pay interest.”

With the development of human history to this day, the word "credit" has contained extremely rich connotations. It may be one of the most complex and elusive concepts in human cognition. "Some things exist only in people's minds. Among all these things, none is more bizarre and subtle than credit; credit is never Forced, but voluntary, relying on feelings such as expectations and worries; credit often appears on its own without fighting for it, and always disappears for no reason; and once credit is lost, it is difficult to fully recover... Credit is very similar to, And in many cases, the reputation and fame that people earn by their wisdom in managing the country and their bravery and command on the battlefield will be due to some unlucky accidents, temporary mistakes or luck. If a person is not good enough, his reputation will be tarnished and he will lose the love of everyone, but as long as he has outstanding talents and real abilities, his reputation will be restored sooner or later. Similarly, although his reputation will be temporarily eclipsed and struggle in difficulties, as long as it is reliable. And the solid foundation can also be restored to a certain extent. "The understanding of the true meaning of credit depends on the beholder and the wise. It can be explored from different angles. In the usual sense, we can explore it from at least 4 angles. To understand "credit".

1. From an ethical perspective

Understanding "credit" from an ethical perspective, it actually refers to a moral quality of "keeping promises".

What people talk about in their daily lives are "integrity", "credibility", "honesty", "a promise worth a thousand dollars", "what you promise will be done", "a gentleman's words are hard to follow" In fact, it reflects the meaning of this level. Looking at credit from this level, it is crucial to a country and a nation, because only by focusing on credit can a society form a good social "trust structure", and this trust structure is a important foundation for the normal functioning of society. People will find that "mutual trust, like obedience, charity, friendship and conversation, is an indispensable condition for connecting and holding the people of a country together." Simmel also pointed out: "Without the universal trust that people enjoy each other, Society itself will disintegrate. ... Modern life is based on honest trust in others, and this is of far greater importance than is usually realized. "It can be said that there is no society that does not emphasize the importance of trust in others. Praise for the ethics of trustworthiness. In our country, the custom of advocating trustworthiness has thousands of years of tradition. The word "faith" appears 38 times in "The Analects", although the frequency is lower than that of benevolence (109 times) and etiquette (74 times). ; but higher than most words describing moral norms, such as kindness (36 times), righteousness (24 times), respect (21 times), courage (16 times), and shame (16 times). For example: "Since ancient times, there has been death, and the people have no faith and cannot stand"; "Great virtues cannot be official, great principles cannot be used, and great faith cannot make promises"; "Words must be deeded, and deeds must be resolute", "Communications with the country should only end with trustworthiness" "wait. In Western society, trustworthiness is also the main moral axis pursued by people. The words about credit and trust appear dozens of times in the Bible.

The meaning of credit from the perspective of corporate business ethics, Di George.

Providing a unique insight: He believes that integrity behavior refers to behavior that is consistent with the highest behavioral norms accepted by oneself, and also refers to behavior that imposes the norms required by ethics and morality on oneself. He pointed out that the most important characteristic of honest behavior is that moral norms are "self-imposed and voluntarily accepted", so for enterprises, the subject of "non-moral myths", "the self-discipline of businesses and their top management must be emphasized." More importantly, he limited the scope of honest behavior to at least ethically "justifiable and legitimate positive values" as the lowest moral bottom line. In other words, the "highest code of conduct accepted by the company itself" must be at least lower than to this bottom line.

2. From an economic perspective

Understanding "credit" from an economic perspective, it actually refers to the relationship between "borrowing" and "loan". Credit actually refers to “the expectation of receiving a sum of money within a limited period of time.” When you borrow a sum of money or a batch of goods (sales on credit), it is actually equivalent to you getting a "limited credit line" from the other party. The reason why you can get this "limited credit line" from the other party is, Most of it is because the other party trusts you, but sometimes it may be because of strategic considerations and other factors. There are many levels to understanding credit from an economic perspective, and it can be understood at least from the levels of the country, bank, enterprise, and individual.

National credit contains at least two meanings. The first is the lending relationship between countries, which is the so-called sovereign debt, such as the famous Brady bonds and the U.S. debt to Latin American countries in the 1980s. loans, my country's low-interest loans to some countries and regions in Asia and Africa, Japan's Overseas Cooperation Fund loans, World Bank loans, etc. Secondly, it is reflected in the lending relationship between the national government and the country's enterprises and residents. The government issues treasury bonds, which are purchased by enterprises and residents. This actually means that the government first borrows a sum of money from enterprises and residents, then invests it, and when it matures The principal and interest shall be repaid on time.

The credit between banks, enterprises and individuals is mutual. Banks need to obtain credit from enterprises and individuals, that is, they need to borrow money from enterprises and individuals. This is the foundation for their survival. At the same time, companies and individuals also need to obtain credit from banks. Companies can use it to meet urgent needs or invest in expansion, etc.; individuals can use it to meet emergency needs, improve the quality of life, etc.

The credit between enterprises and individuals is mainly reflected in two aspects. One is commercial credit (also called transaction credit, or trade credit), or it can be called B-B credit. It mainly refers to non-cash transactions between enterprises, which is often referred to as credit sales. We should not simply regard credit sales objects as only tangible commodities, such as a batch of parts provided by auto parts suppliers; It can actually be a project. For example, a construction company has completed the construction of a building and the project money has not been fully recovered. At this time, the construction company lends out not only the funds and materials advanced for the construction of the building, but also the funds and materials advanced for the construction of the building. At the same time, there is also labor in the construction process; it can even be some intangible services, intellectual products, etc., such as consulting services provided by management consulting companies. The second is credit between enterprises and individuals, which can also be called B-C credit. This form of credit is very common in our daily lives. For example, our mobile phone consumption is usually a kind of credit consumption. Always pay last month's charges this month, and China Mobile will even allow you to default on your phone bills for 2 months.

3. From a legal perspective

Understanding "credit" from a legal perspective, it actually has two meanings. One refers to a relationship between the parties. The rights and obligations of both parties stipulated in the "contract" are not delivered at the same time. If there is a time lag, there will be credit; the second meaning refers to the rights and obligations of both parties in accordance with the provisions of the "contract".

There are two points to note when understanding credit at this level.

The first is this "contract". We can regard this contract as an economic contract in a narrow sense, ranging from a supply contract between two companies to a debt of hundreds of millions of yuan between two countries; Think of it as a broad social contract, such as the contractual relationship between you and your parents. Your parents have the obligation to raise you as an adult, and you also have the obligation to support your parents. The second is another very important feature of this "contract", which is a necessary condition for legal credit, that is, non-immediate delivery. If the realization of rights and obligations is carried out at the same time, then there will be no credit. There must be a certain time difference between the two for credit to appear.

4. From the perspective of currency

In the eyes of the credit creation school, credit is currency, and currency is credit; credit creates currency; credit forms capital.

There is an important school in monetary finance, namely John. Lao was a pioneer and represented by the "credit creation school" such as MacRudd and Han in the 19th century and Schumpeter in the 20th century. In the eyes of this school of thought, credit is currency, and currency is credit. John Law said: "Credit is necessary and useful. The increase in the amount of credit has the same effect as the increase in the amount of money, that is, they can also generate wealth and prosper business." "The creation of credit through banks can Much more money can be added in one year than in ten years of trade. Therefore, if France wants to become rich, it is really necessary to resort to credit; otherwise, France will be poor and weak compared to other powers that use credit. "As long as currency is abundant, a country's prosperity can be created; as long as there are credit facilities (he mainly refers to banks, etc.), abundant currency can be supplied to give the economy an initial impact; relying on this impact, France can produce A lot of wealth. "John Law's basic logic is this: Money is wealth - money does not have to be gold and silver, but paper money issued with land, public bonds, stocks, etc. as guarantee is the best - paper money is a kind of credit of the bank - By supplying this kind of credit, banks can provide abundant currency - giving an initial impact to the economy - relying on this impact to make the country rich and powerful and the economy prosperous; in short, credit is currency; currency is wealth, that is, capital.

McRudd pointed out in his "The Theory of Credit": "People exchange products, labor services and people in exchange for currency. This currency can neither be used to feed one's hunger nor cover one's needs. However, people are willing to exchange their products and services for money. Why is this? It is because after exchange for money, they can exchange it for what they need when they need it. Therefore, the essence of money is nothing more than asking others for the rights or symbols of products and services, and thus it is actually a kind of credit." "Therefore, gold and silver currency can also be correctly called metal credit. "McRudd believes that the essence of credit and money is the same. The creation of credit is the increase of money. The two can be unified under the concept of "currency", but they are different in degree: (1) Credit only has A single value, but money has a majority value or a general value. Credit is only a claim on a certain person, but money is a claim on general commodities; (2) Credit has only a special and uncertain value (because the debtor Death or bankruptcy, credit becomes worthless), while currency has lasting value.

Han is recognized as a representative figure of the credit creation theory. He published "Bank Credit for the Nation" in 1920. "Economic Theory" has a great influence. He discussed credit as money in this way: "For the purpose of payment, a check or deposit transferred from one person to another is, from a legal point of view, only a voucher for the redemption of money. , but from an economic point of view, as long as it needs to be exchanged for local currency and completes the function of currency, it is not just a voucher for currency exchange, but actually the currency itself. "As long as the certificate for withdrawing money from the bank is reliable and anyone is willing to accept it, it will be circulated as currency." "The focus of Han's theory is to clarify that credit can form capital.

He believes that the more credit expands, the lower the interest rate, the more capital goods will be produced, and thus capital can be formed; on the contrary, the more credit shrinks, the higher the interest rate, the less capital goods will be produced, and therefore capital will be difficult to form. His famous proposition is: "Capital formation is not the result of savings, but the result of credit provision." "If demand is primary to production, then credit provision is also primary to capital formation. If there is no credit provision Then no capital goods can be produced, and therefore capital formation is impossible. The supply of credit can cause capital formation, just as demand can cause production."

Schumpeter pointed out: "A more useful approach may be to start with credit transactions and regard capitalist finance as a liquidation system that offsets claims and debts and transfers the difference to the next period - making 'Money' payments become special cases without any special fundamental importance. In other words, a monetary theory of credit may be preferable to a credit theory of money."

Some well-known economists have also made comments in a similar sense. Mrs. Robinson once clearly pointed out: "Currency is actually a matter of credit." Wicksell, a representative of the Swedish school, also believes: "Strictly speaking, we can conclude that all currencies-including metal currencies-are credit Currency. This is because the force that directly drives the creation of value always lies in the confidence of the recipient of the liquid instrument that he can obtain a certain amount of goods. However, paper money only enjoys purely local credit, while precious metals are more or less international. Accepted within the scope. But everything is just a matter of degree."

Basic forms of credit

The basic forms of credit will be explained according to the classification standards of trusted objects.

1. Public credit

Public credit, also known as government credit, refers to the ability of governments at all levels in a country to borrow debt. The government requires huge expenditures to provide various services to the people, such as national defense, education, transportation, health care and social welfare. However, the increase in government taxes often cannot keep up with the increase in expenditure. Therefore, the government runs huge deficits every year. To cover fiscal deficits, the government issues or sells various credit instruments. These credit instruments represent a commitment by the government to the holder to repay borrowed money in the future. This commitment to repay debts comes from public authorities, so it is called public credit.

Take the United States as an example. The U.S. government is divided into three levels: the federal government (central government), state government, and local government (including municipal and county governments). Governments at all levels have to borrow external debt every year to meet various huge expenditures.

The federal government sells the following credit instruments to raise funds: those with a maturity of less than 1 year are called treasury bills; those with a maturity of 1 to 10 years are called treasury bills; those with a maturity of more than 10 years , called treasury bonds. Since the federal government has a strong economy and good debt credit, not only Americans but also foreigners and even foreign governments rushed to buy these securities after they were issued.

Most state constitutions stipulate that the annual budget of a state government cannot have a deficit in order to meet the requirements of a balanced fiscal balance stipulated in the state constitution. Despite this, state governments are often unable to meet their budgets under special circumstances and are forced to issue public debt to raise funds. It's just that because state and local governments have limited financial resources and higher credit risks, the bonds they issue are not as easy to sell as federal government bonds.

2. Corporate credit

Corporate credit generally refers to the credit granted by one corporate legal person to another corporate legal person. Its essence is a monetary loan from the seller's company to the buyer's company. It includes credit sales conducted by manufacturing enterprises to corporate customers in credit management, that is, product credit sales. In the process of product credit sales, the credit grantors are usually material suppliers, product manufacturers and wholesalers, while the buyers are the beneficiaries of product credit sales, which are various corporate customers or agents. The buyer obtains credit granted by the seller in the name of his or her business. Enterprise credit also involves credit to enterprises from commercial banks, finance companies, and other financial institutions, as well as credit generated by trade methods other than sight remittance payment and prepayment.

A bank is also a kind of enterprise, and it is an enterprise specializing in credit. Bank credit is credit granted by commercial banks or other financial institutions to businesses or individual consumers. In the process of product sales on credit, banks and other financial institutions provide financing support to buyers and help sellers expand sales. Commercial banks and other financial institutions grant corporate credit in the form of currency, and the determination of loans and loan repayment methods is based on the corporate credit level. Commercial banks will require companies that do not meet their credit standards to provide mortgages and pledges as guarantees, or have guarantee companies provide guarantees for these companies. The latter situation is essentially that the guarantee company provides credit to the enterprise applying for the loan, which is a special form of credit.

3. Consumer personal credit

Consumer credit refers to the transaction relationship of goods or services conditioned by consumers on the promise of future repayment. In fact, consumer credit has a long history as a transaction tool in the market economy. After World War II, science and technology advanced by leaps and bounds, and productivity increased significantly. In order to promote goods, businessmen have devised many innovative promotion methods, such as installment payment, credit certificates, credit cards, etc. The emergence of consumer credit expanded the size of the market and enabled consumers to enjoy what they wanted in advance.

If the purpose of using credit is used as the criterion, consumer credit can be further divided into retail credit and cash credit.

(1) Retail credit

Retail credit refers to the provision of products and services by retailers to consumers on credit, which is used directly by consumers to purchase final products from retailers. A medium of exchange. In this way, the business or retailer increases sales and reaches more consumers. Under the conditions of modern market economy, retail credit has become a means of market competition.

In retail credit, it can be divided into revolving credit, installment credit and service credit.

Revolving credit is an agreement between a retailer and a consumer. Under the agreement, the retailer allows consumers to purchase various goods on credit transactions within a pre-agreed limit.

Retail installment credit is characterized by requiring the creditee to make a down payment and then pay a fixed amount over a certain period of time until the entire amount is repaid. It is different from revolving credit in that consumers have to sign a sales contract with the company, and the credit transaction automatically terminates after the balance is paid, so it is also called closed credit.

Professional service credit specifically refers to the fact that consumers can obtain professional services in advance and pay after receiving the bill. It is a short-term credit provided by professional service providers to consumers. Professional services credit is similar to the above-mentioned revolving credit, except that professional services replace actual goods.

(2) Cash credit

Cash credit is a cash loan. When consumers need cash for various reasons, they can apply for loans from financial institutions. What consumers get is cash, and the credit entity is the financial institution. Cash credit is much more advanced than retail credit: retail credit limits transactions to specific goods, while cash credit allows consumers to purchase any goods and for a wider range of uses.

Similar to retail credit, cash credit can be divided into three types: installment loans, single payment loans and general purpose credit cards due to different repayment methods.

An installment loan is a loan agreement. It agrees that the borrower will repay the loan with fixed and regular payments over a period of time in the future. The borrower must provide proof of income and financial stability so that the lender has confidence that the borrower will repay the loan in the future.

A single payment loan is a short-term loan, with a loan term usually less than 1 year, and stipulates that at the end of the term, the borrower should pay off the entire loan in one lump sum.

General purpose credit cards are issued by banks, financial companies or the financial departments of large companies. They are loan certificates pre-approved by the card issuing company for the cardholder. This type of loan usually has a credit limit, which is the maximum limit that the cardholder can use to purchase goods or pay for expenses with a credit card

The emergence and development of credit

After the emergence of private ownership, social division of labor continued Development, a large number of surplus products continue to appear.

Private ownership and social division of labor enable workers to possess different labor products, and the emergence of surplus products makes exchange behavior possible.

With the development of commodity production and exchange, contradictions have emerged in commodity circulation - the method of "paying money with one hand and delivering goods with one hand" often encounters difficulties due to restrictions by objective conditions. For example, when some commodity producers sell goods, buyers may have no money to buy because their goods have not yet been sold.

As a result, credit sales, that is, deferred payment, came into being. Sales on credit means the seller's trust in the buyer's future payment commitment, which means the separation of the time when the transfer of goods and the realization of value occur. In this way, in addition to the commodity exchange relationship, the buyer and seller also form a creditor-debt relationship, that is, a credit relationship. When the credit sale expires and the payment is made, money no longer functions as a means of circulation but only serves as a means of payment. This payment is a unilateral transfer of value. It is precisely because of the function of money as a means of payment that commodities can realize their value independently after they have been transferred, thus ensuring the fulfillment of credit. The entire process is essentially a form of transaction that is different from physical transactions and cash transactions, that is, credit transactions.

Later, credit transactions went beyond the scope of buying and selling goods. Currency itself as a means of payment has also joined the transaction process, and lending activities have emerged. Since then, the movement of money and credit relationships have been linked together, forming a new category - finance. The modern financial industry is the product of the development of credit relationships. In the early days of the development of the market economy, most market actors provided credit to each other in the form of deferred payment, that is, commercial credit; in the more developed period of the market economy, with the emergence and development of modern banks, bank credit gradually replaced commercial credit and became the modern The most important form of credit in economic activities.

In short, credit transactions and credit systems were established with the continuous development of the commodity currency economy; furthermore, the emergence of credit transactions and the establishment of credit systems promoted the development of commodity exchange and financial instruments; ultimately , the modern market economy has developed into a credit economy based on intricate credit relationships.