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They don't say how big is the loan, nor how many were needed to buy the hotel. They might have had to shake hands with everyone in their family. Some Asian imm
by stephengillie 8y ago
They don't say how big is the loan, nor how many were needed to buy the hotel. They might have had to shake hands with everyone in their family.
Some Asian immigrant families form a "lending circle" where they choose a member to go 1st, and everyone gives their extra money to that person, and they buy a hotel/restaurant/etc. The circle chooses a 2nd, and everyone gives them spare money - it's a lot faster this time, with the one hotel/restaurant/etc owner paying in a relatively large amount. This goes around until everyone in the group (maybe 12-20 people) has a hotel/restaurant/etc.
- AdamM12 8y agoWorked in restaurant industry. Latino workers had a pool of money that the all put into and if I remember correctly they rotated who the paid it out to for big purchases like this. I think they mainly used it for like cars and homes.
- learc83 8y agoI had an ex-girlfriend whose family did this. I had no idea it was a cultural thing (she was from Mexico). I just just thought it was specific to her family. If I remember correctly though, it caused a far amount of problems because people would often stop paying after their turn.
- AdamM12 8y agoYeah I can imagine. Really has to be close nit so you can put social pressures.
- ofcrpls 8y agoThese are called https://en.wikipedia.org/wiki/Chit_fund https://en.wikipedia.org/wiki/Chit_fund. Pretty common in countries where access to the formal banking sector, especially for women who are home-makers, is complicated.
- AdamM12 8y agoAwesome didn't know what the formal name was.
- najarvg 8y agoExcellent observation! This is the basis of "chit funds" (https://en.wikipedia.org/wiki/Chit_fund https://en.wikipedia.org/wiki/Chit_fund), an alternate form of circular financing in India. Similar schemes also apparently exist in countries like S Korea per my Korean neighbor. But in the motel instances outlined here, anecdotally, lending circles are not used. It's typically a small group of family members or very close friends with a pool of money to "lend".