In China, a Debtor Fights to Stay Afloat
Pharmacist Zhong Maojin runs afoul of the informal loan network
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Hours after a creditor and his gang of tattooed thugs had hustled Zhong Maojin into a coffee shop in Wenzhou, he still refused to yield to their demands. They wanted to take over one of the pharmacies in a chain he’d built by borrowing from informal lenders. “If you like, you can cut off one of my fingers instead,” Zhong, 42, says he told them.
Giving up the store would have made it impossible to pay back 130 other creditors, Zhong says. Unable to borrow at low rates from state banks, which make few loans to private companies, he’d borrowed 30 million yuan ($4.7 million) from private—or informal—lenders and loan sharks at rates as high as 7 percent a month.