Department of Sociology, The State University of New York, College at Brockport, 103 Albert Brown Building, 350 New Campus Drive, Brockport, New York 14420-2914; e-mail: firstname.lastname@example.org.
Divining Value with Relational Proxies: How Moneylenders Balance Risk and Trust in the Quest for Good Borrowers1
Article first published online: 4 AUG 2007
Volume 22, Issue 3, pages 300–330, September 2007
How to Cite
Moulton, L. (2007), Divining Value with Relational Proxies: How Moneylenders Balance Risk and Trust in the Quest for Good Borrowers. Sociological Forum, 22: 300–330. doi: 10.1111/j.1573-7861.2007.00021.x
Editor’s Note: This manuscript was guided to publication by the former editor, Robert Max Jackson. I write this note to acknowledge his efforts.
- Issue published online: 4 AUG 2007
- Article first published online: 4 AUG 2007
- decision making;
This analysis of the U.S. credit industry explores how lenders evaluate people during the loan application process. They use a variety of risk-assessment techniques in conjunction with trust-building mechanisms that I call relational proxies. The relational proxies that lenders rely on are behavioral impressions, reputation information, and financial narratives that explain information on credit reports. Lenders use this subjectively evaluated trust assessment interdependently with standardized financial information to enhance their decision-making process. Face-to-face evaluation of potential borrowers is mediated by institutional rules meant to reduce the need for trust. However, for the lenders in this study, a good borrower is always a trustworthy borrower.