Legal Protection On Sustainable Development Of Small Loan Companies

After<the guidance of micro-loan company>issued in May,2008,the small-loan companies,which are "only loan,no deposit",were built and discussed by many people,civilian capitals were used in the market of microfinance.Using the social funds,the microfinance companies actively promoting the legalization of privte finance,and regulation,covered by the formal financial difficulty for farmers and micro-enterprises,small-loan companies made important contributions to its development.But our present small-loan companies still have problems in the initial stage,including the lack of legal system becoming bottleneck restricts the micro-loan company development,clarifying the relevant legal issues and building a proper legal system become the key to promote their sustainable development.The object is the legal problem existing in the sustainable development of the microfinance compny. Use methods of comparative analysis,empirical analysis and comprehensive study. This article analyses and evaluates the domestic actual situation of the microfinance,and bases on suggestion of international experiments in micro-loan development,taking lagal consideration and proposal of the legal from the company's legal position, corporate governance,supervisory.The paper is divided into four sections.The first part is about the legal system overview of micro-loan company. It introduces the basical problems,including definition,the history of development. It indicates that the microfinance company is one of the commercial microfinance organizaions and states the meaning of sustainable development. State the micro-loan company's legal system and the legal issues that exist in the development. It points out that the problenms of the micro-loan company are mainly policy-oriented and lack of legal norms from legal system. Then they are followed by an analysis of the specific legal issues in micro-loan company,including unclear legal status, inadequate governance structure,unclear suporvisor,unreasonable regulatory content. This factors seriously hinder the company's self-development.The second part,correct legal position is the sustainable development's precondition of micro-loan company. In this part,state this issues' research from theotists and practitions,then put forward my view that the mirco-loan company shuold be defined as non-bank finacial organization and how this legal status solve problems.The third part,improve the corporate governance structure is the internal guarantee of the micro-loan company. Take the measures of optimizing shareholder structure,designing rational governance structure,establishing scientific and reasonable incentive and restraint mechanisms to resolve the company's internal risk.The last part,appropriate supervision is the external guarantee of the micro-loan company sustainable development. This part analyes the current regulatory practice of small-loan companies. Then compares and learn from international experience in micro-credit organizations. Then advance our coutry's regulatory system from the regulatory principles established, the regulation body,the regulatory elements and efficacious regulatory measures. China Banking Regulatory Commision as the regulatory body should take appropriate non-prudential regulation,effectively preventing the risk of micro-loan companies.