A Study Of Perfecting The Legal System Of Folk Financing By Small And Medium-sized Enterprise

Small and medium-sized enterprises(SME) are one of key parts involving in China's market economy, and make great contribution to recent economic development and social progress. However, it seems not a plain sailing for SME, and especially because of lack of money. On the grounds of current financial system not satisfying the demand, most SMEs are seeking for other financial resources busily. Folk financing is convenient, efficient and flexible, so that it attracts much favor by SMEs and gradually becomes main financing way. However, the folk financing is still in the grey area between legal and illegal, and the law did not make a clear regulation about this. Just because of this, SMEs involved in folk financing often touch legal bottom line and get on a criminal road. This situation not only hampers the development of SMEs, but also has a bad impact on the prosperity of market economy and the construction of harmonious society, so it is necessary for perfecting related legal system to regulate folk financing. This article starts from the current provisions involving folk financing with analysis in order to find out the conflict between legal system and current situation. At the same time, this article also does a theoretical research on law-based control upon folk financing, on the basis of learning from other countries'experience in supporting SMEs' development, in order to promoting the progress of folk financing legalization through establishing coordinating legal system.