Põhkrediiti

Põhkrediiti is an Estonian term that translates to "straw credit" or "straw financing." It refers to a form of financial transaction where a loan is secured not by traditional collateral like property or assets, but by the promise of future earnings or a general good faith understanding between parties. This concept often arises in informal lending situations, particularly in rural or close-knit communities where trust plays a significant role.

Historically, põhkrediiti might have been used for agricultural purposes, where a farmer could secure a loan for seeds or equipment based on the anticipated harvest. The "straw" aspect implies a lack of tangible security, relying more on the borrower's reputation and the lender's belief in their ability to repay. While not a formal banking term, it reflects a practice rooted in social capital and reciprocal obligations.

The risks associated with põhkrediiti are inherent in its informal nature. Without clear legal documentation or verifiable collateral, the lender has limited recourse in case of default. Conversely, the borrower might face social repercussions or damage to their reputation if they fail to meet their obligations. In modern financial systems, such arrangements are generally superseded by more regulated and secured lending practices, though the underlying principle of lending based on trust can still be observed in certain peer-to-peer or community-based financial initiatives.