Perfect Legal Norms On Private Lending In China

Private lending is a civil behavior with obligation or free obligation out of loan among natural persons, corporations and other organizations, except for financial institutions. Private Lending is characterized as private, non-regulatory, practical and popular. Since the Reform and Opening policy, the private lending in China is inevitably developing rapid. The rigid demand on the capital of the booming private economy, increasing individual production and consumption presupposes the existence of private lending. The banking system’s root effect makes it difficult for individuals and private enterprises to obtain funds from formal financial institutions, which is the main reason for the existence and development of private lending. The development of economy and accumulation of social wealth makes private lending possible. Currently, private lending mainly manifests as friendship lending, mutual aided lending, private consolidation, private native banks.At present, there is no special law on private lending yet in China. The regulation on private lending is scattered in laws, regulations,judicial interpretations and policies, which can not meet the needs of the development of private lending. The defect of current law system in China lies in aspects such as, policy first wile legal vacancy, stringent control with an abnormal responsibility, legal conflict, lagging behind the actual needs and so on. The lack of standardization of private lending had disturbed the financial order, expanded the social gap, threatening social stability.We should respect the important and irreplaceable role and give full play to private lending in China. We should refer to the experience of extra-territorial legal regulation of private lending and the reality of our country to perfect private lending in China. Making clear thelegal status of private lending,change the way from piug to dredge about the folk debit and credit,And based on principles of financial security, efficiency and fairness, we should implement classification regulation, protect the free development of friendship loans, strictly control high interest lending, develop institutionalized management of private native banks, mutual lending and private consolidation. Also, we should perfect the norms of the subject, object, regulatory and legal responsibilities of private lending.