Research On Informal Finance In Our Country

Along with the continuous deepening of reform and opening up and the development of market economy, finance has played a more and more important role in our country. In the situation of modern market economy, finance has become the center of economy, determining the speed and efficiency of economy.But the State-owned financial institutions can't meet the diversification of market's needs, and informal finance emerged as an institutional arrangements.The informal finance has developed rapid in recent years, and it has become the center of economy, determining the speed and efficiency of economy. According to Central University of Finance and Economics Research Group's survey, the informal finance scale has past trillion, and accounted for about 6.96 percent of GDP, 5.92 percent of the foreign currency loans. All this requires that we must face up to informal finance strength, and do a comprehensive understanding of it.In China, the financial reform is a gradual institutional structure transition which always falls behind the reform in economy from plan economy to market economy. Taking the transitional economy as the special background, various economic sectors elements coexist and uneven economic development are current national conditions, and this situation will exist for a long time. At the same time, our country implemented a monopoly of state-owned financial institutions. A single financial system is obviously unable to adapt to this complex, multi-level economic situation. Whether the huge number of farmers who are widely distributed, or the private economy which has been the backbone of the national economy, especially Small and Medium-sized Business, their own characteristics and weaknesses decide that they can't meet loan demand entirely through the formal finance, so they had to turn to inform finance. This is the driving force for China's informal finance development. The existence and development of informal finance not only is a historical process, but also a realistic demand. China's current conditions decided informal finance's existence will be long-term financial viability, and will be an integral part of China's financial structure. The paper indicates that, how to promote and regulate it are all important issues with theoretical and practical significance.