A Study On The Legal Regulation Of Folk Loan

In China, the private lending as a form of financing, its existence and development already has a long history. Especially after the early days, self-sufficiency in rural areas has changed the mode of production, the formation of family-centered mode of production gaining in popularity, they are created by the household as a unit of wealth has far exceeded the required own life, there has been large abundance of money. This invisible provide a solid economic foundation for this form of financing of private lending existence and development. With the development of market economy, private lending is by virtue of its own freedom, efficiency and other characteristics has been rapid development. Compared with the national financial law by regulated financial sector, the private lending more exposed its own spontaneity and freedom. So, with the prosperity and development of China’s market economy, especially after the reform and opening up, on the one hand, individual citizens and businesses of the gradual accumulation of wealth, a lot of social idle funds need to use. But the state’s existing financial channels relative lack of investment, which inevitably limits the investment channels for private idle funds. On the other hand, countries ease the employment pressure, dynamic market economy strongly encourage and support people in their own businesses, many small and micro enterprises came into being, and the development of market economy necessarily requires a lot of capital investment, supported by the state is bound to be limited. And by the reform by the international financial crisis and the impact of China’s financial system, monetary policy continues to be the adjusted bank credit also shrunk dramatically, to raise the threshold for bank lending, which in turn makes these emerging small and micro enterprises to obtain bank increase the difficulty of the loan, the contradiction between supply and demand of capital deepening. Data show that in our small and medium micro enterprises account for ninety percent of the total number of enterprises, solve the employment of the population accounted for 80 percent of products and services, the contribution rate of 60 per cent of GDP, and create national tax percent fifty. It is precisely because the formal financial institutions and capital market lending procedures complex and higher threshold, small and micro enterprises is undoubtedly contrary to the urgent needs of funds. At the same time, plenty of idle private capital and private capital investment profit of desire has been limited investment channels bound. In this context, private lending as formal financial institutions and capital markets investment channels useful supplement, as many small and medium micro enterprises producing sources of funding, but also become a means to achieve a large number of people profit from the investment. Especially since in recent years, China’s real estate market, the development of energy markets, and stock index futures stock market volatility continued, bank interest rates are gradually falling as the market, and further promote the prosperity of private lending. Private lending has also been from the initial occurrence of certain small-scale acquaintance circle of development to now all security companies, investment and finance companies, pawn shops like nature of institutions, there is also illegal specialized in lending as a career in the legal gray area individuals or organizations. Based on the current situation, with the intensified private lending, private lending case has become the people’s court accepts relatively large type is also more difficult cases. However, due to the lag of the law, of the current legislation on private lending has not yet formed a complete system, in application of the law, there is still a lot of vacancies.So, private lending under the existing legal regulation is a double edged sword. On the one hand, it plays in expanding financing channels for non-public economy on an active role in actively supporting the growth of China’s total economic output; on the other hand, because of its spontaneity and freedom that has characterized itself, its legal regulation partial deletion, its sustained and healthy development is hindered, thereby also destroy normal economic order. So, we have to do is this form of financing of private lending "its essence, to its dregs", perfect for private lending laws and regulations to create a favorable legal environment for their healthy development. This article from the detailed overview of private lending meaning to proceed, the need for the existence of private lending elaborate and analyze the status quo existence of private lending, analysis of the reasons, then private lending outside the Legislation of experience combined with the actual situation in China, trying to explore perfect path of legal regulation of private lending.