[Reader-list] The Culture of Business: The Informal Sector and the Finance Business

[Ananth]

The Culture of Business: The Informal Sector and the Finance Business – 
June Monthly Research Report
Submitted By S.Ananth, Vijayawada

This report essentially sums up the finance activity and the inter-linkages 
between the formal and informal finance businesses in the region. Lending 
practices may not differ in different regions, but what differs is the 
acceptability of the practices that accompany the finance business. In most 
of the places ‘generally accepted norms’ accompany the lending places. To 
generalise this could mean that certain behavioural patterns are expected 
from the borrowers and vice-versa. To transcend these generally accepted 
norms could be difficult for both the lenders and borrowers. It is 
imperative to keep in mind that these ‘generally accepted norms’ – 
culturally and spatially. In most parts of the country, lending money (at 
least on high rates of interest) was considered to be socially mean. 
Similarly in a number of places, social acceptability may have very strict 
legal connotations. Historically these factors seem to be alien to the region.

Since the 1970’s (at that is the point which most of the people interviewed 
recollect) Vijayawada has been the scene of various innovative schemes and 
activities that cannot be construed as being legal, yet they are all 
socially acceptable. Infact these activities / schemes have thrived in 
Vijayawada. This could be because of the perception people that large scale 
(often enormous and speculative gains) as possible with minimal risk. This 
conception of possibility of exceptional returns (often speculative) 
returns has largely been responsible for the social acceptability of such 
schemes and the ease with which people in region are convinced about their 
viability – even if they are not legal. The existence of unofficial and 
illegal stock exchanges is a clear indication of this. The ease with which 
the members of these unofficial and illegal stock exchanges were and 
continue to be respectable members of the local society may be baffling to 
those who do not understand the cultural practices of the region. This 
research believes that such business culture is largely historical.

Though this research, it has become apparent that local conditions 
influence the nature of capitalism that exists and operates in different 
regions. Claims about the uniformity and centralising tendencies of capital 
may be exaggerated – at least based on the experience of the operation of 
finance capital in a region like Vijayawada. Capital uses every mechanism / 
tool to expand and extend its profitability – often even pre-capitalist means.