An Analysis Of Restrains On The Development Of Consumer Credit In China And Suggestions

This thesis elaborates on fundamental theories about consumer credit, and does quantitative analyses of the relationship between it and economic growth, indicating that there is enormous room for development of consumer credit at present. It analyzes the present profile of consumer credit in aspects of total quantity, structure and risk profile respectively after an introduction of experience in developing consumer credit in the US. It points out that the total quantity of consumer credit is on the rise but with a slow growth. At the same time, the structure of credit is suffering a serious imbalance, and risk management ability in the field is not optimistic. An emphasis is placed on the overall analyses from multiple aspects of factors influencing the development of consumer credit in the country. The analyses are across fields of institutional economics, information economics and behavioral finance with support of relevant research achievements. In terms of institutional economics, it discusses restraints on the development of consumer credit in China by pointing out the shortage of relevant laws (e.g. personal credit system, bankruptcy law, security law etc.) through internal relations between property rights, fee for transactions, change of regulations and the practice of credit consumer. In terms of information economics, it discusses restraints on the development of consumer credit by pointing out the importance of building up personal credit system and a system for sharing information between commercial banks and consumer credit entity by mapping out and analyzing a model of consumer credit contract. In terms of behavioral finance, it analyzes the restraints on the development of consumer credit and reasons for"herding behavioral"in its market by applying Herding Behavioral theory in the field of behavioral finance, pointing out that the key problems are the outdated risk management system and incomplete personal credit system. Last but not least, it proposes several advice on making a breakthrough and further developing consumer credit in China, mainly in the following three aspects—stepping up innovation of the consumer credit system, speeding up the building of personal credit system, and optimizing and strengthening risk management in consumer credit system.