The Legal Countermeasures Study On The Development Of Private Lending In China

With the constant change of macro-economy in China, private lending develops dramatically in recent years, which plays a significant role in social capital financing, promoting the development of SMEs. However, due to the lack of the relevant legal norms and the imperfectness of market institution, the growth of private lending in China appears more like a "National Capital Carnival", which would threaten the stability of financial market and lasting political stability.Based on the specific concept, set legal norms as a breakthrough, the paper determines the principles of regulating private lending, among which the private lending for commercial purpose is more of importance, by analyzing the necessity of regulating. Therefore, the concrete measures were put forward on the basis of existing laws and previous studies as well.This paper consists of four chapters.Firstly, the thesis defines private lending in China, and discusses its characteristics and classification. By comparing the various definitions proposed by related Chinese scholars and the definitions specified by the laws, the paper defines the specific meaning of private lending. Accordingly, the author analyzes its characteristics based on practice, and divides it into Common Private Lending and Private Lending for Commercial Purpose based on the purpose of regulation.In the second part, the paper analyzes the necessity of regulating private lending in China, emphasizing on its development problems from macroscopic and microscopic viewpoints. On the macroscopic level, the paper mainly discusses the social impact caused by private lending, including the impact on the capital market, macroeconomic regulatory and social stability. On the micro aspect, the author analyzes the existing problems in the development of private lending, such as the indeterminacy of rights and obligations, the variety of interest rate and the faultiness of guarantee system.Chapter three offers fundamental principles on regulating private lending in China. In view of the choice of regulating object and method, the author proposes different regulating methods, mainly for the regulation of private lending for commercial purpose, based on its different performance. Meanwhile, self-regulation and profession autonomy should be strengthened in the guidance of cost-income principle.This paper takes the fourth part as the key point, in which the author presents concrete countermeasures of developing private lending in China from legal system, regulatory measures and broad environment, regarding related issues addressed in second part. The countermeasures include related legal system reform, establishment of information system, Market Access&Market Withdrawal system, interest rate regulation system, registration system, innovation of guarantee model and financing method and so on.