Wing On Department Store took deposits to fund itself

During China's Beiyang-era political fragmentation (1912-1926), there was no unified central bank, and the modern banking sector that did exist was scarce, expensive, or simply unwilling to lend at the scale a large, reputable firm actually needed. A major retailer or manufacturer with real revenue and real public trust still had limited options for raising the capital growth required: bank loans if a bank would extend them, dilutive equity issuance, or expensive, small-scale borrowing from informal moneylenders.

None of those options matched the scale or flexibility a firm like Wing On Department Store in Shanghai actually needed to keep expanding. Bank credit, where available at all, came with conditions set entirely by the lender; equity raises were slow and diluted existing owners; informal moneylenders operated at a scale too small to matter for a company of Wing On's size. The firm needed a source of debt capital it could access on its own terms, at a scale that matched its ambitions.

Opened a Savings Deposit Department inside their own stores, taking deposits directly from the public and cutting out the bank intermediary to capture the spread.

The store's existing public trust made depositors confident their savings were safe.

By cutting out the bank, it could offer better interest to depositors while borrowing more cheaply.

The scale of daily foot traffic made the deposit base large enough to matter.

If you have public trust and foot traffic, you can raise capital directly from your customers, bypassing banks.

The Rong family's Shen Xin Textile explicitly credited the practice with freeing the enterprise from the conditions imposed by financial capitalists, saving the company an estimated 200,000 to 300,000 yuan a year in interest costs compared with bank borrowing. A 1930s survey of 100 Chinese enterprises found 89 of them funded part of their operations through savings deposits, together holding nearly 64 million yuan — over a third of all the debt capital these firms raised.