Non-formal Financial Evolution Path And Regulatory Countermeasures Research

As the transition of Chinese economy moving forward, how to fulfill the financing needs from rural areas and those relevant medium and small sized enterprises is becoming a key concern. In the process of this transition, private financing is becoming an important source for those above mentioned financing needs, which strongly support the development of rural agriculture and small as well as medium sized enterprises. The traditional informal financial theory suggests that, informal finance comes from the financial repression and constraints of the formal, which will wither away with the market deepening its reform. However, in China, informal financial markets are evolving under different conformations along with the process of financial reform. Although the informal finance is supporting the development of rural agricultural development, it also creates negative impact on the social economy. Actually, we have to confess that compared with developed countries, private financial system is relatively incomplete and unreasonable in China. As the main body of Chinese private financing, the legality of organization hindered its operational efficiency and normal development, so under unique upgrade and transition of Chinese economy, how to make informal finance develop further has become a topic of concern.The author has analyzed the informal financial system using a package of indicators such as governance structure, interest rates, organizational structure, risk control system, business model and the relationship between mainstream financial elements to measure and summed up the basic evolution model of informal finance in Wenzhou, where private financial system growing relatively mature in China. Moreover, by anglicizing the path for informal financial development of Taiwan, South Korea and Japan of which traditional culture is similar to China, we found that the evolution of informal finance has something in common with China and other developing countries. That is to say, recognizing and affiliating informal finance is feasible; guiding and developing informal finance will benefit the development of economy. For all the above, we suggest gradually move forward financial liberalization under recognizing the positive impact of informal finance on different stages of development; bring informal finance into civil law; make the local government take the responsibility to guide and supervise informal finance; adjust different measures for standardization and guidance to different conformations; innovate financial service by upgrading the support to rural areas and those relevant medium and small sized enterprises from formal finance; experiment on small loans company, go deep into exploration of its mechanism for this important method to guide and standardize informal finance.