Research Of Chinese Private Lending Legal Regulation

Private lending, for our country is not a new thing, but it is a relatively new concept for our modern legal system. Since new China was found, private lending has not been a legal confirmation. After reform and opening up, China is gradually opening up the market to allow the people of capital into the past prohibited from entering areas. But monopoly in the financial sector is gradually loosened in recent years. Because of the state monopoly of the financial sector, China's financial system has some backwardness of and disadvantages. Due to the information asymmetry and high cost of bank credit, small and medium enterprises is urging financial aid. It is impossible to get loan from bank, so they have to choose to borrow from the private funds to compensate for the problem of insufficient capital supply in the business. Because of the lack of regulation of private lending, leading to the confusion of non-formal in the financial sector, including private lending, and the non-formal financial market bubble is growing, and expanding chain of private lending. Expanding risk is always with the expansion of the chain of private lending, and this chain is becoming increasingly vulnerable, once it broken that will lead to a non-formal financial crisis. The financial sector has seriously affected China's economic development. Due to lack of government regulation of non-formal financial and non-formal financial scale of the gradual expansion, China's financial macro-control efficiency is severely weakened.This article is the start of the main characteristics of private lending, behavioral characteristics, financial characteristics, the parsing of private lending for the development of the private lending laws. Provide the basis of theoretical studies for effective government control of private lending.