A model of credit as a pairwise activity is studied in a random matchi
ng model where there are no social sanction mechanisms. The model depi
cts some prevalent features of credit arrangements. Even though there
are no informational asymmetries and the price of credit is determined
competitively, there is credit rationing. The credit relationships ar
e also longlasting. The introduction of credit into a barter economy d
oes not necessarily increase the welfare of debtors.