The French Partner

Money-lending for trade was well developed in India in the eighteenth century and credit could be obtained either on the security of a ship or its cargo. Most voyages were financed by respondentia loans, which the French called loans ‘à la grosse aventure’. They were made at high rates of interest, depending on the length and risks of the voyage, with the risk on the lender. Such forms of credit were familiar to the French from European practice and the loans were in effect a form of insurance against the risks of the voyage, for if the ship were lost the money did not have to be repaid. Not unnaturally, Indian merchants and money lenders advancing credit preferred to do so to known and established traders. As tyros, the French needed capital from home to initiate their projects and display their credit-worthiness to the commercial communities of their regions. The relationship between capital from France and credit in India was important, even after the French community had built up twenty-five years of experience in Asian trade. In his memorandum ‘Sur le Crédit de la Nation dans l’Inde’ ¹ Duval d’Espremenil, who was working in India between 1741 and 1749, attributed the low level of credit that the French could attract to the fact that so many of them arrived virtually without resources. These difficulties gave the French partner great significance in country trade.