Private Lending's Autonomy Of The Will And State Regulation

In recent years, private lending has the tendency to be legalization. For many years, private lending has been playing a significant role in supporting small and medium-sized enterprises and rural economic growth. However, the developments of the private lending also exposed lots of problems, such as interest rates are too high, financing source is unknown, and macro-control is confused. These problems have seriously restricted the development of private lending. The supervision of private lending in our country has been in the absence for a long time, and relevant laws and regulations has no unified guiding ideology. The boundaries between illegal private lending and lawful private lending are blurred. Private lending is out of the supervision system, bringing unstable factors to financial system and social system. Therefore, the research on the legal system of private lending supervision is very necessary.Legitimate lending relationships are protected by law. The essence of private lending is contract. Private lending actions based on the identical intent of both sides of the contract, just like the general civil juristic acts. The supply-sides and demand-sides of private lending will sign contract in maximizing their self-interest. Economics research shows that, in certain conditions, private lending has transaction costs advantages than formal financial services. Therefore, in particular conditions, private lending has the value of existence.The existing legal system of private lending includes the restriction on the organization and practices. However, according to theory of financial repression, the excessive restrictions of the private lending would lead to the rise of transaction cost, medium and small-sized enterprises and farmers for the need for the funds cannot be satisfied, negative effects on economic may happen.If no restraints on the laissez faire development of private lending, many problems should be triggered. Private lending should be regulated. The developments of private lending also make the legal system transformed. After many twists and turns, the attitude of legislation of our country changed gradually from prohibiting private lending to recognition and support. Reference the to experience of Taiwan, Japan, the United States and other developed countries of the legal regulations of private lending will be helpful to our country to find the boundary between state regulation and autonomy of the will.The legislation for private lending should include to market body law, the macroeconomic regulation law and the market regulation law. The market body of private lending market must be explicitly. At present our country has allowed developing small loan company, but the legal status of the coadjutant lending organization has not been admitted. For the "usurious" problem which always being criticized, further reform of interest rate management system is needed. The main regulators of the private lending market shall be the CBRC. Private lending operational behavior should be supervised, and the source of funds should be legitimate. At the same time, the supporting system of private lending should be gradually perfect, such as the credit reporting system, guarantee system and bankruptcy system.