On The Legal Supervisory System Of Small-loan Company

Small-loan can trace back to the micro-credit experiment and the practice of village bank conducted by the Nobel Prize winner in Bangladeshi. This financial innovation has provided financial service for thousands of people in poverty, especially those women under the poverty line. It helped change their destiny. China has also built up many kinds of micro-credit organizations, but before the foundation of small-loan company, they are nothing but poverty relief organizations managed by government or non-government organization (NGO). Small-loan company is aimed to perfect Chinese financial market and the financing of small and medium enterprises through commercialization. The well-balanced development of financial market requires effective regulation which doesn't work without perfect law frameworks. The regulation of small-loan company in China is quite disordered now, because such regulation is based on the guidance which is issued by the People's Bank of China and the CBRC. However, this guidance is less authoritative and almost all of the provinces have their own regulations. So constructing the regulation system of small-loan company in accordance with international experience in our country is necessary.There are many problems about small-loan company in regulation, manifested in: the nature of small-loan companies isn't final qualitative; lacking of clear regulation of the main body; risks associated with inappropriate regulatory measures, such as: the source of capital for supervision, interest rate controls, professional training and access system; the lack of regulatory laws. Based on the above analysis, and national conditions, learning from international experience of successful supervision, thus sorting out the experiences which our country should learn from. Include the following:the establishment of governance laws and regulations system, microcredit system and establishing a multi-level legal authority to replace the Government's guidance; Clearing regulation of the main small-loan companies, mainly in this area is to determine the China Banking Regulatory Commission (Board) as a regulator of the main body, and specific responsibilities should be clearly regulated to give banking supervision department of the site supervision and off-site supervision of the authority; establishment and improvement of small-loan companies specific regulatory regime, Specifically including:the development of small-loan companies in the appropriate time, should allow small-loan companies attain the public deposits, interest rates should be determined to the market, the government should change its role, from the rate-regulation to provide the necessary services, Default risk control, we should focus on mining the existing system, using guarantee property and credit guarantees to reduce the risk of small loans; Establishing self-regulatory system of small-loan companies, industry associations, mainly the establishment of self-management system, mainly to strengthen self-management, improve management efficiency for practitioners to provide appropriate training and rights maintenance; Building small-loan companies seceding mechanism, improving the dissolution of small-loan companies and the bankruptcy system and conversion to commercial banks associated with the progressive docking system.