GBP Chapter 212 Fundraising Plan
Chapter 212 Fundraising Plan
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The next day, Liu Ye's first action was to summon Duan Mengrou to the council hall. To his surprise, his nemesis Lin Shiyue also came in.
He said helplessly, "I didn't know Miss Lin would grace us with her presence. I'm so sorry for not welcoming you properly." But in his heart, he was cursing: I'm listening to my subordinates report on their work. What are you, an outsider, doing here?
Lin Shiyue said expressionlessly, "I came along to help Duan Mengrou because I was afraid she would be taken advantage of. It has nothing to do with you."
Liu Ye was speechless. She came uninvited and said it had nothing to do with the host. This was how spoiled and unreasonable the daughters of officials were. If it weren't for his status as a military officer in the court, and the fact that her uncle and father were useful to him, he would have a hundred ways to teach her a lesson based on her attitude.
He didn't continue the topic with Lin Shiyue, and went straight to Duan Mengrou: "How are things going in Guangzhou?"
Duan Mengrou dared not adopt Xie Wenjun's attitude. She replied respectfully, "When the branches heard that the bank was being taken over by the Qiongzhou camp, none of them dared to say a word, and things are going very smoothly. The branches in Foshan, Shunde, Panyu, Nanhai, and other places have all been closed, and the staff has been streamlined. However, people's hearts are unsettled now, and they don't know how the bank will be managed in the future. In addition, we have been closed for a long time and have not received any income. We cannot delay for too long. What should I do? Please give me your instructions, sir."
Liu Ye reminded him, "You're already my manager, so stop calling me 'maid' all the time. I'm willing to use you, partly because of Miss Lin's contributions, but also because I value your ambition. Lack of experience is fine, you can learn slowly. But from now on, don't think of yourself as a weak woman, and don't expect me to be gentle with you."
Duan Mengrou felt a warmth in her heart. She was not afraid of hardship or fatigue, and she didn't mind being treated like a man. What she feared was being seen as a decorative vase, or having ulterior motives like Gao Hongtu.
"This servant... I understand."
"As for how to operate the money shop in the future, it's very simple. For now, we'll only do one thing: attract wealthy people in Guangzhou to deposit their money."
Duan Mengrou didn't immediately understand. What did it mean to deposit silver? She asked hesitantly, "Merchants have always deposited silver for the convenience of currency exchange, and they only deposit what they need. I don't understand what you mean by asking wealthy people to deposit silver?"
Liu Ye waved his hand: "The little bit of silver that merchants save for foreign exchange is not enough. What I mean is to deposit all the silver that the wealthy people in Guangzhou have hidden at home into our bank, so that we can control all the silver in Guangzhou."
Duan Mengrou frowned: "But, if the silver is kept in a money exchange, the money exchange will charge a fee. Who would be willing to pay that kind of money? Besides, it's safest to keep the silver at home."
Liu Ye smiled; he had explained this to Liang Xiaoming before. "You're right, that's how it works under the current model. But think about it the other way around: what if we didn't charge them money, but instead gave them interest?"
Duan Mengrou's years of experience following Gao Hongtu had finally paid off, and she immediately realized what was going on.
"Money can generate more money, so it's naturally different. But to entice those wealthy families, what's a suitable interest rate?"
After listening to Duan Mengrou's words, Liu Ye clapped his hands and cheered: "Not bad, you've grasped the key point in one sentence, that's promising. Giving interest is to make them feel that money is getting moldy if it's hidden in a cellar, it's better to deposit it in a money exchange to increase its value. As for how much interest to set, I'm not sure either. You're a native of Guangzhou and have experience in money exchanges, so you can tell me."
Although Duan Mengrou didn't know the exact meaning of "value-added," she could roughly guess. After thinking for a moment, she cautiously replied, "Private lending in Guangzhou generally has a monthly interest rate of one to two percent, and some even have four or five percent, which would be considered usury. I think that the monthly interest rate we set can be the same as or slightly higher than that of ordinary lending, and around two percent is reasonable."
"2% monthly interest?" Liu Ye recalled for a moment, it seemed to be not much different from the old timeline, only slightly higher than the bank's fixed deposit interest rate.
He countered with, "Suppose you had 100,000 taels of silver, with a monthly interest rate of 2%, would you be willing to deposit it in a money exchange?"
Duan Mengrou quickly did the math in her head: 100,000 taels of silver, with a monthly interest rate of 2%, would amount to 2,000 taels a month, and 24,000 taels a year—quite a sum. She honestly replied, "If I had that much silver, I would definitely be tempted by these terms. However, I would also have to consider the risk of not being able to recover my investment, which might put me in a dilemma."
Liu Ye nodded: "This is a matter of building a credit system, which takes time. But Hongtu Money Shop is the largest money shop in Guangzhou, so its reputation should be pretty good, right?" The reason he went to such lengths to acquire Hongtu Money Shop was not only because of its channels and manpower, but more importantly because of the intangible asset of creditworthiness, which cannot be built up in a day or two.
Duan Mengrou replied, "We won't comment on Gao Hongtu's character, but he is indeed very capable in running the money shop. The reputation and name of Hongtu Money Shop far surpasses those of its competitors."
“Since there are no major issues with credit, the first problem is solved,” Liu Ye said. “The second problem is how to determine the monthly interest rate. My initial idea is to divide it into fixed-term and current accounts. Current accounts can be withdrawn at any time and will have an interest rate of 0.5%; fixed-term accounts with a term of one to two years will have an interest rate of 0.2%, and those with a term of more than two years will have an interest rate of 0.3%.
"Regular or current account?" Not only Duan Mengrou's eyes widened, but Lin Shiyue was also attracted. This terminology was quite novel.
Liu Ye explained, “Current accounts are to meet the needs of those who are cautious by nature. These people want to make money but are afraid of taking risks. They are not at ease if their money is kept with us for a long time. Of course, we also do not exclude those who are short of money and need to withdraw cash at any time. As for fixed-term deposits, these are the customers we really need to win over. During this fixed period, their money is our money, and we can use it as we see fit.”
Duan Mengrou then asked, "What if someone has a fixed deposit and insists on withdrawing it early? How should they handle that?"
"It's simple. There are always trade-offs. If you withdraw early, you'll be charged the current account interest rate, which is only one percent. I believe those who prefer fixed deposits won't risk losing more than they gain; they'll do the math."
Duan Mengrou thought about it carefully. This method had considered all aspects: it could guarantee enough temptation for potential customers, making the wealthy people in the city willingly take out their silver from their cellars; it also designed a reasonable tiered system to guide the deposited silver into relatively stable funds through regular transactions. She couldn't help but breathe a sigh of relief and sincerely praised, "Master is truly a genius, one in a hundred years. I am utterly impressed that you could come up with such a method."
Liu Ye smiled slightly; this was the benefit of having hundreds of years of experience.
Lin Shiyue, standing beside her, casually remarked, "Even if these wealthy families are willing to deposit their silver in banks, whether it's for three or five years, they'll eventually have to pay it back. So where will these high interest rates come from? They can't just lose money to make a name for themselves and spend their days counting silver, can they?"
Liu Ye glanced at her and said to Duan Mengrou, "You just focus on doing this well. Leave the rest to me on how to use these savings. I will invest them in maritime trade and make money in Japan. Compared to the profits there, even if we pay five percent interest here in Guangzhou, it's just a drop in the bucket."
Ultimately, Liu Ye's character doesn't actually intend to establish a modern bank system in 17th-century feudal society. Rather, he aims to borrow and enhance the methods banks use to attract deposits, rapidly amassing massive amounts of cash for investment in highly profitable industries, thus accumulating more wealth to support the expansion of the Qiongzhou Camp. This is more akin to fundraising in an old-fashioned world than traditional bank deposit-taking.
Duan Mengrou then realized that the master was playing a very big game, aiming to gather the wealth of the entire city of Guangzhou to do business. What a bold move that was!
She replied respectfully, "Your subordinate will certainly do her utmost to manage the money shop well for you, and contribute my humble efforts to your great cause."
"Great, I'll be waiting for your good news."
"There's one more thing I need your instructions on, sir: should we continue with the old methods of melting and casting silver coins and inter-regional remittances?" These were the core businesses of the money shop in the past, and Duan Mengrou didn't know whether she should give them up completely.
Liu Ye shook his head: "Remittances in other places are troublesome and laborious, and the profits aren't much. Besides, there's not much room for expansion within Guangdong, and it's not realistic to expand branches outwards—with bandits running rampant and the Tartars besieging the borders, there's chaos everywhere. Opening branches in other provinces would just be sending money to the bandits. Let's put this matter aside for now and wait until the country is stable and peaceful. As for minting silver coins, as long as it doesn't affect our main business, it's fine to keep it. Although we don't need that extra income, it's still the core business of a money shop."
"My subordinate understands."
Next, Liu Ye explained some details about the money shop's deposit business, or rather, its "fundraising" business. Duan Mengrou memorized everything. After Liu Ye finished speaking, she returned to Guangzhou the next day to launch the plan as soon as possible.