The Legal Issues About Private Lending

In recent years, due to the national macro-control policy and the increase of thebank lending rate, private lending appears unusually active with China’s rapiddevelopment of socialist market economy. One aspect of the financing of small andmedium-sized enterprises needs are not met, and inflationary pressures, civiliancapital is in search of outlet. Fit in easily with each other to satisfy both sides ofsupply and demand, ecbolic folk debit and credit market development. On the otherhand, the frequent cases of illegal private lending, folk debit and credit problems, lackof legal regulations of private lending surging undercurrent. In1995, the case of DengBin illegal fund-raising in the city of Wuxi in Jiangsu province became the largestillegal fund-raising cases since the founding of new China with cases3.2billion yuan.In1998, the case of Xiangxi’s illegal fund-raising in Hunan province has the amountto tens of billions, with the number of71900persons,50major companies involvedin the case; In April13,2011, Jin Libin, who is the Chairman of Liuzhou Group in thecity of Baotou self-immolated, behind them as high as1.237billion yuan huge civildebt rises to surface. In September2011, Feng Guangcheng who is the chairman ofthe company of Zhejiang glass and other executives suspected with illegallyabsorbing48billion yuan. At the beginning of2012, the Zhejiang High Court, actualfraud sentenced Wu Ying to death with illegal fund-raising770million yuan. Theevents of wenzhou boss running away, Wu Ying case, Erdos SME owners runningaway borrow a wake-up call. Therefore, it is very important to clarify the relatedconcept, recognize the situation at present, grasp the existing problems, analysis thesolution of related problems, and it is positive to sustain the development of theprivate lending. This paper mainly discusses and analyzes four related issues: theconcept and legal nature of private lending, the problems of private lending, improvethe relevant countermeasure of private lending and borrowing the sunshine ofcountermeasure effectiveness analysis.Private lending in China has a history of thousands of years, and is affected bymany factors and disappear from the scene. Thirty years of reform and opening up, the vigorous development of private lending. In recent years, it encountered a seriesof problems, involves borrowing or illegal fund-raising cases controversial. Thispaper proves the borrowing connotation features, essence and active reason, lay thefoundation for the following analysis; next elaborates privates lending and creditproblems, namely: the special laws and regulations lack both legal, the lack ofuniform; the lack of complete system; in the economic law and criminal law etc.many problems and defects; the trial practice, there are various problems andchallenges. In this case, aiming at the existing problems, this paper puts forward thecorresponding solutions and measures, respectively is making special borrowingseparate regulations, as soon as possible "lending regulations", and giving full play tothe role of present laws and regulations; to revise and improve the existing borrowingthe related laws and regulations; improving the personal bankruptcy law laws andregulations, perfect civil main lending market withdrawal mechanism; clear civillending rates, at the legislative level appropriately increased lending rates no higherthan bank rate4times; perfect folk credit supervision system, strengthen the folkdebit and credit management; prudent trial folk leasehold dispute cases. Carefulanalysis and evaluate each law laws and regulations appearing, so, to private lendingin light of existence of legal obstacles analysis, analysis of private lending legalcountermeasure effectiveness, verification "lending regulations" can effectivelyregulate and guide private lending, which can live in the sun.Generally speaking, we should as soon as possible implements the lendingregulations, and increase lending rates no higher than bank rate4times in thelegislative level appropriate. It not only can improves the folk credit laws andregulations, and effectively guides the private lending developping in the sunshine,promotes the small and medium-sized enterprises, especially small and microbusinesses benign development and expand, prevents crime cases, so as to maintainsocial stability.