Loan Capital, money capital, whose owner loans it to other capitalists for an agreed term with its return and payment in the form of interest stipulated. It is a monetary form of industrial capital that has broken off and acquired independent existence and circulation. Loan capital is raised from temporarily free money that forms in the industrial capital turnover. Loaning capitalists transfer money for temporary use by industrial and merchant capitalists requiring it, which causes a separation of property capital from capital functioning and involved in the production and realisation of surplus value. The formula of loan capital is M-M’ (money loan—loan with interest). Money circulation of this kind makes a complete fetish of bourgeois relations of production, creating the impression that interest grows out of the money itself. In reality, money in the form of loan capital increases because it is used by the investing capitalists to extract surplus value. The investing capitalist yields part of the surplus value to the loaning capitalist as interest (payment) for the right to use his money. Loan capital is by nature parasitic, since its owners create nothing, nor do they use their capital in production; yet they appropriate labour other than their own, thus participating in the exploitation of the working class along with the industrialists and merchants. The intermediaries between the loaning and investing capitalists in capitalist society are the banks which accumulate vast amounts of redundant money and offer credits to capitalist enterprises and the state (see Credit under Capitalism). Credit largely contributes to higher centralisation of capital, and accelerates the process of production socialisation while simultaneously enhancing the parasitic character of capitalist system and aggravating its inherent contradictions.