Socio-Economic and Power Interdependence: Loan Sharks and Traditional Market Traders After the COVID-19 Pandemic
Keywords:
Interdependency, Loan Shark, Socio-economic, COVID-19 PandemicAbstract
Moving on from the rise of loan sharking practices in traditional markets in East Java, this research has become important. The problem is that there is interdependence between loan sharks and market traders; thus, the practice is difficult to stop. For this reason, this study seeks to identify the pattern of interdependence that is built between traders and loan sharks as actors of informal financial institutions. This study uses qualitative research methods with case study methods, and research informants move according to the snowball effect principle. Using the concept of actor interdependence, informal trust, and informal institutions, this study shows that loan sharks and traders based on their region of origin have differences as immigrants and indigenous people. Loan sharks and traders collaborate to form a pattern of interdependence between informal actors in one arena (traditional market). The greater the market levy income, the more crowded the market and the more merchants and loan sharks. In contrast, the market levy is directly proportional to crowds, the number of merchants, and loan sharks. Informal trust arose in both actors because formal institutions could not easily provide capital for traders. Although loan sharks set a high interest rate, the convenience provided makes this practice continue to exist.
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