Institutional Analysis Of Informal Finance

Different nation have different basic institutional environment, macroscopical institution and microscopical institution. Especially to the developing countries like our country, the market mechanism is imperfect, every institution is during the deep change. Ignoring the analysis on institution, research to the informal financial problem can only stay in the superficial stage, there is no substantive meaning. This dissertation attempt to set up an institutional analysis framework to explain the emergence of informal finance of china and find the countermeasure of informal finance. we set up an institutional framework to analyze informal finance on the basis of reference to domestic and international informal finance theories. Then according to its own analytical framework to study the informal financial system, identify the causes and informal financial solutions. China is a developing country, with the general features of the developing countries: financial market infrastructure is backward, inadequate laws and regulations, the lack of intermediaries and professionals. In developing economies, because the vast number of enterprises, especially SMEs low creditworthiness, financial markets and capital surplus is the main scattered in funds and the end-users lack of providers, banks, effective communication channels, and there was a serious information asymmetries, the bank-enterprise indirect financial relations conducive to the long-term bank, the production of low-cost information, thus effectively overcome the above information asymmetry. China's macro-financial institution is the mandatory institution changes pattern, it is a marginal system of gradual change pattern. Forcible institution change can save the game cost in the short term and have immediate effect, but enforcement of the institutional arrangements are not the best economic entities game balance, but the political balance of the main points of the game, then the economy is not in accordance with the main engines of compulsory system arrangement action. Economic entities will regame in the forcible institutional arrangement, forming an informal system. It is an informal informal financial institution. We will research the financial institution of our country on the basis of formal and informal financial institution.